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(iii) in paragraph (13)— 
(I) in subparagraph (A), in the matter 
preceding clause (i), by striking ‘‘The pay-
ment 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 Secu-
rity 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 semi-
colon 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(42 U.S.C. 1395rr note) is repealed.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 sub-
section shall be construed as authorizing or requir-
ing the Secretary of Health and Human Services to 
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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 un-
recovered 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 ef-
fect 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 subsection: 
‘‘(h) QUALITY INCENTIVES
IN
THE END-STAGE 
RENAL DISEASE PROGRAM.— 
‘‘(1) QUALITY INCENTIVES.— 
‘‘(A) IN GENERAL.—With respect to renal 
dialysis services (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 re-
quirement 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 
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be reduced by up to 2.0 percent, as determined 
appropriate by the Secretary. 
‘‘(B) REQUIREMENT.—The requirement 
described in this subparagraph is that the pro-
vider or facility meets (or exceeds) the total 
performance score under paragraph (3) with re-
spect 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 in-
volved, and the Secretary shall not take into ac-
count such reduction in computing the single 
payment amount under the system under para-
graph (14) in a subsequent year. 
‘‘(2) MEASURES.— 
‘‘(A) IN GENERAL.—The measures speci-
fied 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 Administration for such 
management and measures on dialysis ade-
quacy; 
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‘‘(ii) to the extent feasible, such meas-
ure (or measures) of patient satisfaction as 
the Secretary shall specify; and 
‘‘(iii) such other measures as the Sec-
retary specifies, including, to the extent 
feasible, measures on— 
‘‘(I) iron management; 
‘‘(II) bone mineral metabolism; 
and 
‘‘(III) vascular access, including 
for maximizing the placement of arte-
rial venous fistula. 
‘‘(B) USE OF ENDORSED MEASURES.— 
‘‘(i) IN GENERAL.—Subject to clause 
(ii), any measure specified by the Secretary 
under subparagraph (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 Secretary 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 
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as long as due consideration is given to 
measures that have been endorsed or 
adopted by a consensus organization iden-
tified by the Secretary. 
‘‘(C) UPDATING
MEASURES.—The Sec-
retary shall establish a process for updating the 
measures specified under subparagraph (A) in 
consultation with interested parties. 
‘‘(D) 
CONSIDERATION.—In 
specifying 
measures under subparagraph (A), the Sec-
retary shall consider the availability of meas-
ures 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 Secretary shall develop a method-
ology for assessing the total performance 
of each provider of services and renal di-
alysis facility based on performance stand-
ards with respect to the measures selected 
under paragraph (2) for a performance pe-
riod established under paragraph (4)(D) 
(in this subsection referred to as the ‘total 
performance score’). 
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‘‘(ii) APPLICATION.—For providers of 
services and renal dialysis facilities that do 
not meet (or exceed) the total performance 
score established by the Secretary, the Sec-
retary shall ensure that the application of 
the methodology developed under clause (i) 
results in an appropriate distribution of re-
ductions 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 re-
spect to individual measures calculated 
under subparagraph (B) to reflect prior-
ities 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 per-
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(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 subpara-
graph (B) of such subsection (b)(14)) and the quality ini-
tiative under subsection (h) of such section 1881 (as 
added by subsection (b)). Such report shall include the fol-
lowing information: 
(1) The changes in utilization rates for 
erythropoiesis stimulating agents. 
(2) The mode of administering such agents, in-
cluding information on the proportion of individuals 
receiving such agents intravenously as compared to 
subcutaneously. 
(3) An analysis of the payment adjustment 
under subparagraph (D)(iii) of such subsection 
(b)(14), including an examination 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 in-
curred by other providers and facilities in furnishing 
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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 oc-
curred after implementation of the payment system 
under such subsection (b)(14). 
(5) Any other information or recommendations 
for legislative and administrative actions determined 
appropriate by the Comptroller General. 
SEC. 154. DELAY IN AND REFORM OF MEDICARE DMEPOS 
COMPETITIVE 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 subparagraph (D)’’ after 
‘‘in a manner’’; 
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(ii) in subparagraph (B)(i)(II), by 
striking ‘‘80’’ and ‘‘in 2009’’ and inserting 
‘‘an additional 70’’ and ‘‘in 2011’’, respec-
tively; 
(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 subparagraphs: 
‘‘(D) CHANGES IN COMPETITIVE ACQUISI-
TION PROGRAMS.— 
‘‘(i) ROUND 1 OF COMPETITIVE AC-
QUISITION
PROGRAM.—Notwithstanding 
subparagraph (B)(i)(I) and in imple-
menting the first round of the competitive 
acquisition programs under this section— 
‘‘(I) the contracts awarded under 
this section before the date of the en-
actment of this subparagraph are ter-
minated, no payment shall be made 
under this title on or after the date of 
the enactment of this subparagraph 
based on such a contract, and, to the 
extent that any damages may be ap-
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plicable as a result of the termination 
of such contracts, such damages shall 
be payable from the Federal Supple-
mentary Medical Insurance Trust 
Fund under section 1841; 
‘‘(II) the Secretary shall conduct 
the competition 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 pro-
vided in subclauses (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 administrative or judicial review 
with regard to the termination provided 
under such subclause. 
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‘‘(ii) ROUND 2 OF COMPETITIVE AC-
QUISITION
PROGRAM.—In 
implementing 
the second round of the competitive acqui-
sition programs under this section de-
scribed 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 sub-
divide metropolitan statistical areas 
with populations (based upon the 
most recent data from the Census Bu-
reau) of at least 8,000,000 into sepa-
rate areas for competitive acquisition 
purposes. 
‘‘(iii) EXCLUSION OF CERTAIN AREAS 
IN SUBSEQUENT ROUNDS OF COMPETITIVE 
ACQUISITION
PROGRAMS.—In 
imple-
menting subsequent rounds of the competi-
tive acquisition programs under this sec-
tion, 
including 
under 
subparagraph 
(B)(i)(III), for competitions occurring be-
fore 2015, the Secretary shall exempt from 
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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 popu-
lation density within a metropolitan 
statistical area that is otherwise se-
lected, as determined for purposes of 
paragraph (3)(A). 
‘‘(E) VERIFICATION BY OIG.—The Inspec-
tor 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 
Services 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 
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to verify such calculations for subsequent 
rounds of such programs. 
‘‘(F) SUPPLIER FEEDBACK ON MISSING FI-
NANCIAL DOCUMENTATION.— 
‘‘(i) IN GENERAL.—In the case of a 
bid where one or more covered documents 
in connection with such bid have been sub-
mitted 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 subpara-
graph (B)(i)(I)) or 90 days (in the 
case of a subsequent round of such 
programs) after the covered document 
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 
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documents identified in the notice pro-
vided 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 covered 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 be-
fore 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 provided under this subpara-
graph— 
‘‘(I) applies only to the timely 
submission of covered documents; 
‘‘(II) does not apply to any deter-
mination as to the accuracy or com-
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pleteness of covered documents sub-
mitted or whether such documents 
meet applicable requirements; 
‘‘(III) shall not prevent the Sec-
retary 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
DE-
FINED.—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 acqui-
sition program in order to meet required 
financial standards. Such term does not in-
clude other documents, such as the bid 
itself or accreditation documentation.’’; 
and 
(B) in paragraph (2)(A), by inserting be-
fore the period at the end the following: ‘‘and 
excluding certain complex rehabilitative power 
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wheelchairs recognized by the Secretary as clas-
sified within group 3 or higher (and related ac-
cessories when furnished in connection with 
such wheelchairs)’’. 
(2) BUDGET NEUTRAL OFFSET.— 
(A) IN GENERAL.—Section 1834(a)(14) of 
such Act (42 U.S.C. 1395m(a)(14)) is amend-
ed— 
(i) by striking ‘‘and’’ at the end of 
subparagraphs (H) and (I); 
(ii) by redesignating subparagraph (J) 
as subparagraph (M); and 
(iii) by inserting after subparagraph 
(I) the following 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 competi-
tive acquisition in any area under the com-
petitive 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 se-
lected for such competition and diabetic 
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supplies 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 con-
sumers (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 consumers (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 pre-
vious year, 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 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 con-
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sumers (U.S. urban average) for the 12- 
month period ending with June 2013; 
and’’. 
(B) CONFORMING TREATMENT FOR CER-
TAIN ITEMS AND SERVICES.—The second sen-
tence 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 following: ‘‘except that for items and serv-
ices described in paragraph (2)(D)— 
‘‘(A) for 2009 section 1834(a)(14)(J)(i) shall 
apply under this paragraph instead of the percent-
age 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 per-
centage 
increase 
computed 
under 
section 
1834(a)(14)(L)(i) shall apply instead of the percent-
age increase otherwise applicable.’’. 
(3) 
CONFORMING
DELAY.—Subsections 
(a)(1)(F) and (h)(1)(H) of section 1834 of the So-
cial Security Act (42 U.S.C. 1395m) are each 
amended by striking ‘‘January 1, 2009’’ and insert-
ing ‘‘January 1, 2011’’. 
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(4) CONSIDERATIONS
IN
APPLICATION.—Sec-
tion 1834 of such Act (42 U.S.C. 1395m) is amend-
ed— 
(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 COMPETI-
TIVE BID RATES.—The Secretary shall specify 
by regulation the methodology to be used in ap-
plying 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 REQUIRE-
MENT.— 
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(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 RE-
QUIREMENT.—In implementing quality stand-
ards under this paragraph— 
‘‘(i) subject to clause (ii), the Sec-
retary shall require suppliers furnishing 
items and services described in subpara-
graph (D) on or after October 1, 2009, di-
rectly or as a subcontractor for another en-
tity, to have submitted to the Secretary 
evidence of accreditation by an accredita-
tion organization designated under sub-
paragraph (B) as meeting applicable qual-
ity standards; and 
‘‘(ii) in applying such standards and 
the accreditation requirement of clause (i) 
with respect to eligible professionals (as 
defined in section 1848(k)(3)(B)), and in-
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cluding such other persons, such as 
orthotists and prosthetists, as specified by 
the Secretary, furnishing such items and 
services— 
‘‘(I) such standards and accredi-
tation requirement 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 pro-
fessionals and persons; and 
‘‘(II) the Secretary may exempt 
such professionals and persons from 
such standards and requirement if the 
Secretary determines that licensing, 
accreditation, or other mandatory 
quality requirements apply to such 
professionals and persons 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 con-
strued as preventing the Secretary of Health 
and Human Services from implementing the 
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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
SUBCONTRAC-
TORS.— 
‘‘(i) INITIAL DISCLOSURE.—Not later 
than 10 days after the date a supplier en-
ters into a contract with the Secretary 
under this section, such supplier shall dis-
close to the Secretary, in a form and man-
ner specified by the Secretary, the infor-
mation on— 
‘‘(I) each subcontracting relation-
ship that such supplier has in fur-
nishing items and services under the 
contract; and 
‘‘(II) whether each such subcon-
tractor meets the requirement of sec-
tion 1834(a)(20)(F)(i), if applicable 
to such subcontractor. 
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‘‘(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 Sec-
retary, in such form and manner, the in-
formation described in subclauses (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 om-
budsman within the Centers for Medicare & Medicaid 
Services in order to respond to complaints and inquiries 
made by suppliers and individuals relating to the applica-
tion of the competitive acquisition program under this sec-
tion. The ombudsman may be within the office of the 
Medicare Beneficiary Ombudsman appointed under sec-
tion 1808(c). The ombudsman shall submit to Congress 
an annual report on the activities under this subsection, 
which report shall be coordinated with the report provided 
under section 1808(c)(2)(C).’’. 
(c) CHANGE IN REPORTS AND DEADLINES.— 
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(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 Com-
petitive 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 spec-
ified in subparagraph (C)’’; 
(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 
subparagraph: 
‘‘(C) TOPICS.—The topics specified in this 
subparagraph, for the study under subpara-
graph (A) concerning the competitive acquisi-
tion program, are the following: 
‘‘(i) Beneficiary access to items and 
services under the program, including the 
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impact on such access of awarding con-
tracts to bidders that— 
‘‘(I) did not have a physical pres-
ence 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 partici-
pating in the program and recommenda-
tions about ways to reduce those costs 
without compromising quality standards or 
savings to the Medicare program. 
‘‘(iv) Impact of the program on small 
business suppliers. 
‘‘(v) Analysis of the impact on utiliza-
tion of different items and services paid 
within the same Healthcare Common Pro-
cedure Coding System (HCPCS) code. 
‘‘(vi) Costs to the Centers for Medi-
care & Medicaid Services, including pay-
ments made to contractors, for admin-
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