‘‘(C) To the extent possible, the method-
ology has been successfully implemented in pay-
ment under a State Medicaid program or by a 
major payer or is certified by an entity with a 
contract under section 1890(a). 
‘‘(D) The methodology is open and trans-
parent and available for review and comment. 
‘‘(E) To the extent possible, the method-
ology is in the public domain. 
‘‘(F) If commercially available methods are 
the only viable methods that meet the criteria 
in subparagraphs (A), (B), and (C), the Sec-
retary may select such commercial methods as 
long as such methods meet the criteria in sub-
paragraph (D). 
‘‘(k) DEFINITIONS.—In this section: 
‘‘(1) APPLICABLE HEALTHCARE DELIVERY OR-
GANIZATION.—The term ‘applicable healthcare deliv-
ery organization’ means a Medicare Advantage Plan 
receiving payments under part C, health home, ac-
countable care organization, applicable hospital (as 
defined in subparagraph (C)), ambulatory surgery 
center, federally qualified health center, or other 
healthcare delivery organization identified by the 
Secretary. 
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‘‘(2) APPLICABLE
HISTORICAL
PERIOD.—The 
term ‘applicable historical period’ means, with re-
spect to an applicable healthcare delivery organiza-
tion for a fiscal year, the most recent 2-year period 
for which data from the organization are available 
for purposes of this section. 
‘‘(3) APPLICABLE HOSPITAL.—The term ‘appli-
cable hospitals’ means a subsection (d) hospital (as 
defined in section 1886(d)(1)(B). 
‘‘(4) APPLICABLE PROSPECTIVE PERIOD.—The 
term ‘applicable prospective period’ means— 
‘‘(A) with respect to an organization, the 
fiscal year in which the healthcare delivery or-
ganization specific adjustment factor under sub-
section (a)(2) for an applicable historical period 
applies to the payments to the healthcare deliv-
ery organization; and 
‘‘(B) with respect to healthcare profes-
sionals, the year in which the geographic-spe-
cific potentially preventable outcomes adjust-
ment factor under subsection (b)(2) for an ap-
plicable historical period applies to payments to 
the professionals. 
‘‘(5) 
POTENTIALLY
PREVENTABLE
OUT-
COMES.—The term ‘potentially preventable out-
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comes’ means inpatient potentially preventable com-
plications under subsection (e)(2), potentially pre-
ventable readmissions under subsection (f)(2), poten-
tially preventable admissions under subsection 
(g)(2), potentially preventable emergency room visits 
under subsection (h)(2), and potentially preventable 
outpatient procedures and tests under subsection 
(i)(2).’’. 
(b) REPORTING
OF POTENTIALLY PREVENTABLE 
OUTCOMES.— 
(1) REPORTING TO HEALTHCARE DELIVERY OR-
GANIZATIONS.—For each applicable historical pe-
riod, the Secretary of Health and Human Services 
(in this section referred to as the ‘‘Secretary’’) shall 
provide confidential reports to applicable healthcare 
delivery organizations with respect to potentially pre-
ventable outcomes. The confidential reports shall be 
provided to a healthcare delivery organization at 
least 90 days before the date of their release to the 
public regarding potentially preventable outcomes of 
the healthcare delivery organization. 
(2) REPORTING HEALTH DELIVERY ORGANIZA-
TION SPECIFIC INFORMATION.— 
(A) IN
GENERAL.—The Secretary shall 
make information available to the public re-
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garding potentially preventable outcomes of 
each applicable healthcare delivery organization. 
(B) OPPORTUNITY TO REVIEW AND SUB-
MIT CORRECTIONS.—The Secretary shall ensure 
that an applicable healthcare delivery organiza-
tion has the opportunity to review, and submit 
corrections for, the information to be made pub-
lic prior to such information being made public. 
(C) WEB SITE POSTING.—Such informa-
tion shall be posted on the Hospital Compare 
Internet Web Site in an easily understandable 
format. 
(c) APPLICABILITY
TO MEDICAID.—The Secretary 
shall apply to State plans (or waivers) under title XIX 
of the Social Security Act regulations relating to payment 
adjustments for potentially preventable outcomes (as de-
fined in section 1899B(k) of such Act) as appropriate for 
the Medicaid program. Such regulations shall be in effect 
no later than October 1, 2017. 
(d) QUALITY IMPROVEMENT GRANTS.— 
(1) 
IN
GENERAL.—Subject 
to 
paragraph 
(4)(D), beginning in fiscal year 2017 the Secretary 
shall award quality improvement grants to eligible 
healthcare delivery organizations described in para-
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graph (2) that meet the criteria established under 
paragraph (3). 
(2) ELIGIBLE HEALTHCARE DELIVERY ORGANI-
ZATION.—For purposes of this subsection for a fis-
cal year, an eligible healthcare delivery organization 
is an applicable healthcare delivery organization that 
has a healthcare delivery organization-specific ad-
justment factor for the fiscal year (as determined 
under section 1899B(a)(2) of the Social Security 
Act, as added by subsection (a)), that is lower than 
the healthcare delivery organization-specific adjust-
ment factor (under such section) for 75 percent of 
all other healthcare delivery organizations in such 
fiscal year. 
(3) CRITERIA.—The Secretary shall establish 
criteria for awarding grants under this subsection. 
(4) LIMITATIONS.— 
(A) USE OF GRANT FUNDS.—A healthcare 
delivery organization that applies for and re-
ceives a grant under this subsection shall use 
such grant to implement processes that lower 
the rate of potentially preventable outcomes. 
(B) TERM OF GRANT.—Grants under this 
subsection shall be for 2 years. 
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(C) REPORTS.—A healthcare delivery orga-
nization that applies for and receives a grant 
under this subsection shall, not later than 30 
months after the date of receiving such grant, 
submit a report to the Secretary on the proc-
esses funded by such grant and the resulting 
impact on rates of potentially preventable out-
comes. 
(D) AMOUNT OF GRANTS.—The aggregate 
amount of funds awarded as grants under this 
subsection for a fiscal year shall not exceed 5 
percent of the sum of the composite aggregate 
payments for excess potentially preventable out-
comes for all healthcare delivery organizations 
in the applicable historical period (as deter-
mined under section 1899B(c)(1) of the Social 
Security Act). 
(5) AUTHORIZATION
OF
APPROPRIATIONS.— 
There are authorized to be appropriated to carry out 
this subsection such sums as may be necessary for 
each of fiscal years 2017 through 2021. 
(e) GAO REPORT.—Not later than January 1, 2018, 
the Comptroller General of the United States shall submit 
to Congress a report on the impact of section 1899B of 
the Social Security Act, as added by subsection (a), on 
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