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pended, before such date of enactment, at least 
10 percent of the estimated cost of the project 
(or, if less, $2,500,000); or 
‘‘(C) has obtained an approved certificate 
of need in a State where one is required on or 
before such date of enactment.’’. 
(c) ADDITIONAL AMENDMENTS.—Section 1206(a) of 
the Pathway for SGR Reform Act of 2013 (division B of 
Public Law 113–67) is amended— 
(1) in paragraph (2)(A), by striking ‘‘Assess-
ment’’ and inserting ‘‘Advisory’’; and 
(2) in paragraph (3)(B), by striking ‘‘shall not 
apply to a hospital that is classified as of December 
10, 2013, as a subsection (d) hospital (as defined in 
section 1886(d)(1)(B) of the Social Security Act, 42 
U.S.C. 1395ww(d)(1)(B))’’ and inserting ‘‘shall only 
apply to a hospital that is classified as of December 
10, 2013, as a long-term care hospital (as defined 
in section 1861(ccc) of the Social Security Act, 42 
U.S.C. 1395x(ccc))’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section are effective as of the date of the enactment 
of this Act. 
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TITLE II—OTHER HEALTH 
PROVISIONS 
SEC. 201. EXTENSION OF THE QUALIFYING INDIVIDUAL (QI) 
PROGRAM. 
(a) EXTENSION.—Section 1902(a)(10)(E)(iv) of the 
Social Security Act (42 U.S.C. 1396a(a)(10)(E)(iv)) is 
amended by striking ‘‘March 2014’’ and inserting ‘‘March 
2015’’. 
(b) EXTENDING TOTAL AMOUNT AVAILABLE FOR 
ALLOCATION.—Section 1933(g) of the Social Security Act 
(42 U.S.C. 1396u–3(g)) is amended— 
(1) in paragraph (2)— 
(A) in subparagraph (T), by striking 
‘‘and’’ at the end; 
(B) in subparagraph (U)— 
(i) by striking ‘‘March 31, 2014’’ and 
inserting ‘‘September 30, 2014’’; and 
(ii) by striking ‘‘$200,000,000.’’ and 
inserting ‘‘$485,000,000;’’; and 
(C) by adding at the end the following new 
subparagraphs: 
‘‘(V) for the period that begins on October 
1, 2014, and ends on December 31, 2014, the 
total allocation amount is $300,000,000; and 
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‘‘(W) for the period that begins on Janu-
ary 1, 2015, and ends on March 31, 2015, the 
total allocation amount is $250,000,000.’’; and 
(2) in paragraph (3), in the matter preceding 
subparagraph (A), by striking ‘‘or (T)’’ and insert-
ing ‘‘(T), or (V)’’. 
SEC. 202. TEMPORARY EXTENSION OF TRANSITIONAL MED-
ICAL ASSISTANCE (TMA). 
Sections 1902(e)(1)(B) and 1925(f) of the Social Se-
curity Act (42 U.S.C. 1396a(e)(1)(B), 1396r–6(f)) are 
each amended by striking ‘‘March 31, 2014’’ and inserting 
‘‘March 31, 2015’’. 
SEC. 203. EXTENSION OF MEDICAID AND CHIP EXPRESS 
LANE OPTION. 
Section 1902(e)(13)(I) of the Social Security Act (42 
U.S.C. 1396a(e)(13)(I)) is amended by striking ‘‘Sep-
tember 30, 2014’’ and inserting ‘‘September 30, 2015’’. 
SEC. 204. EXTENSION OF SPECIAL DIABETES PROGRAM 
FOR TYPE I DIABETES AND FOR INDIANS. 
(a) SPECIAL DIABETES PROGRAMS FOR TYPE I DIA-
BETES.—Section 330B(b)(2)(C) of the Public Health 
Service Act (42 U.S.C. 254c–2(b)(2)(C)) is amended by 
striking ‘‘2014’’ and inserting ‘‘2015’’. 
(b) SPECIAL DIABETES PROGRAMS FOR INDIANS.— 
Section 330C(c)(2)(C) of the Public Health Service Act 
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(42 U.S.C. 254c–3(c)(2)(C)) is amended by striking 
‘‘2014’’ and inserting ‘‘2015’’. 
SEC. 205. EXTENSION OF ABSTINENCE EDUCATION. 
Subsections (a) and (d) of section 510 of the Social 
Security Act (42 U.S.C. 710) are each amended by strik-
ing ‘‘2014’’ and inserting ‘‘2015’’. 
SEC. 206. EXTENSION OF PERSONAL RESPONSIBILITY EDU-
CATION PROGRAM (PREP). 
Section 513 of the Social Security Act (42 U.S.C. 
713) is amended— 
(1) in paragraphs (1)(A) and (4)(A) of sub-
section (a), by striking ‘‘2014’’ and inserting 
‘‘2015’’ each place it appears; 
(2) in subsection (a)(4)(B)(i), by striking ‘‘and 
2014’’ and inserting ‘‘2014, and 2015’’; and 
(3) in subsection (f), by striking ‘‘2014’’ and 
inserting ‘‘2015’’. 
SEC. 207. EXTENSION OF FUNDING FOR FAMILY-TO-FAMILY 
HEALTH INFORMATION CENTERS. 
Section 501(c)(1)(A) of the Social Security Act (42 
U.S.C. 701(c)(1)(A)) is amended— 
(1) in clause (iii), by striking at the end ‘‘and’’; 
(2) in clause (iv), by striking the period at the 
end and inserting a semicolon and by moving the 
margin to align with the margin for clause (iii); and 
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(3) by adding at the end the following new 
clauses: 
‘‘(v) $2,500,000 for the portion of fiscal year 
2014 on or after April 1, 2014; and 
‘‘(vi) $2,500,000 for the portion of fiscal year 
2015 before April 1, 2015.’’. 
SEC. 208. EXTENSION OF HEALTH WORKFORCE DEM-
ONSTRATION PROJECT FOR LOW-INCOME IN-
DIVIDUALS. 
Section 2008(c)(1) of the Social Security Act (42 
U.S.C. 1397g(c)(1)) is amended by striking ‘‘2014’’ and 
inserting ‘‘2015’’. 
SEC. 209. EXTENSION OF MATERNAL, INFANT, AND EARLY 
CHILDHOOD HOME VISITING PROGRAMS. 
Section 511(j) of the Social Security Act (42 U.S.C. 
711(j)) is amended— 
(1) in paragraph (1)— 
(A) by striking ‘‘and’’ at the end of sub-
paragraph (D); 
(B) by striking the period at the end of 
subparagraph (E) and inserting ‘‘; and’’; and 
(C) by adding at the end the following new 
subparagraph: 
‘‘(F) for the period beginning on October 
1, 2014, and ending on March 31, 2015, an 
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amount equal to the amount provided in sub-
paragraph (E).’’; and 
(2) in paragraphs (2) and (3), by inserting ‘‘(or 
portion of a fiscal year)’’ after ‘‘for a fiscal year’’ 
each place it appears. 
SEC. 210. PEDIATRIC QUALITY MEASURES. 
(a) CONTINUATION
OF FUNDING
FOR PEDIATRIC 
QUALITY MEASURES FOR IMPROVING THE QUALITY OF 
CHILDREN’S HEALTH CARE.—Section 1139B(e) of the 
Social Security Act (42 U.S.C. 1320b–9b(e)) is amended 
by adding at the end the following: ‘‘Of the funds appro-
priated under this subsection, not less than $15,000,000 
shall be used to carry out section 1139A(b).’’. 
(b) ELIMINATION OF RESTRICTION ON MEDICAID 
QUALITY
MEASUREMENT
PROGRAM.—Section 
1139B(b)(5)(A) of the Social Security Act (42 U.S.C. 
1320b–9b(b)(5)(A)) is amended by striking ‘‘The aggre-
gate amount awarded by the Secretary for grants and con-
tracts for the development, testing, and validation of 
emerging and innovative evidence-based measures under 
such program shall equal the aggregate amount awarded 
by 
the 
Secretary 
for 
grants 
under 
section 
1139A(b)(4)(A)’’. 
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SEC. 211. DELAY OF EFFECTIVE DATE FOR MEDICAID 
AMENDMENTS RELATING TO BENEFICIARY 
LIABILITY SETTLEMENTS. 
Effective as if included in the enactment of the Bipar-
tisan Budget Act of 2013 (Public Law 113–67), section 
202(c) of such Act is amended by striking ‘‘October 1, 
2014’’ and inserting ‘‘October 1, 2016’’. 
SEC. 212. DELAY IN TRANSITION FROM ICD–9 TO ICD–10 
CODE SETS. 
The Secretary of Health and Human Services may 
not, prior to October 1, 2015, adopt ICD–10 code sets 
as the standard for code sets under section 1173(c) of the 
Social Security Act (42 U.S.C. 1320d–2(c)) and section 
162.1002 of title 45, Code of Federal Regulations. 
SEC. 213. ELIMINATION OF LIMITATION ON DEDUCTIBLES 
FOR EMPLOYER-SPONSORED HEALTH PLANS. 
(a) IN GENERAL.—Section 1302(c) of the Patient 
Protection and Affordable Care Act (Public Law 111–148; 
42 U.S.C. 18022(c)) is amended— 
(1) by striking paragraph (2); and 
(2) in paragraph (4)(A), by striking ‘‘para-
graphs (1)(B)(i) and (2)(B)(i)’’ and inserting ‘‘para-
graph (1)(B)(i)’’. 
(b) CONFORMING AMENDMENT.—Section 2707(b) of 
the Public Health Service Act (42 U.S.C. 300gg–6(b)) is 
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amended by striking ‘‘paragraphs (1) and (2)’’ and insert-
ing ‘‘paragraph (1)’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this Act shall be effective as if included in the enactment 
of the Patient Protection and Affordable Care Act (Public 
Law 111–148). 
SEC. 214. GAO REPORT ON THE CHILDREN’S HOSPITAL 
GRADUATE MEDICAL EDUCATION PROGRAM. 
(a) IN GENERAL.—In the case that the Children’s 
Hospital GME Support Reauthorization Act of 2013 is en-
acted into law, the Comptroller General of the United 
States shall, not later than November 30, 2017, conduct 
an independent evaluation, and submit to the appropriate 
committees of Congress a report, concerning the imple-
mentation of section 340E(h) of the Public Health Service 
Act, as added by section 3 of the Children’s Hospital GME 
Support Reauthorization Act of 2013. 
(b) CONTENT.—The report described in subsection 
(a) shall review and assess each of the following, with re-
spect to hospitals receiving payments under such section 
340E(h) during the period of fiscal years 2015 through 
2017: 
(1) The number and type of such hospitals that 
applied for such payments. 
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(2) The number and type of such hospitals re-
ceiving such payments. 
(3) The amount of such payments awarded to 
such hospitals. 
(4) How such hospitals used such payments. 
(5) The impact of such payments on— 
(A) the number of pediatric providers; and 
(B) health care needs of children. 
SEC. 215. SKILLED NURSING FACILITY VALUE-BASED PUR-
CHASING. 
(a) IN GENERAL.—Section 1888 of the Social Secu-
rity Act (42 U.S.C. 1395yy) is amended by adding at the 
end the following new subsection: 
‘‘(g) SKILLED NURSING FACILITY READMISSION 
MEASURE.— 
‘‘(1) READMISSION MEASURE.—Not later than 
October 1, 2015, the Secretary shall specify a skilled 
nursing facility all-cause all-condition hospital read-
mission measure (or any successor to such a meas-
ure). 
‘‘(2) RESOURCE USE MEASURE.—Not later than 
October 1, 2016, the Secretary shall specify a meas-
ure to reflect an all-condition risk-adjusted poten-
tially preventable hospital readmission rate for 
skilled nursing facilities. 
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‘‘(3) MEASURE
ADJUSTMENTS.—When speci-
fying the measures under paragraphs (1) and (2), 
the Secretary shall devise a methodology to achieve 
a high level of reliability and validity, especially for 
skilled nursing facilities with a low volume of re-
admissions. 
‘‘(4) PRE-RULEMAKING PROCESS (MEASURE AP-
PLICATION
PARTNERSHIP
PROCESS).—The applica-
tion of the provisions of section 1890A shall be op-
tional in the case of a measure specified under para-
graph (1) and a measure specified under paragraph 
(2). 
‘‘(5) FEEDBACK REPORTS TO SKILLED NURS-
ING FACILITIES.—Beginning October 1, 2016, and 
every quarter thereafter, the Secretary shall provide 
confidential feedback reports to skilled nursing fa-
cilities on the performance of such facilities with re-
spect to a measure specified under paragraph (1) or 
(2). 
‘‘(6) PUBLIC REPORTING OF SKILLED NURSING 
FACILITIES.— 
‘‘(A) IN
GENERAL.—Subject to subpara-
graphs (B) and (C), the Secretary shall estab-
lish procedures for making available to the pub-
lic by posting on the Nursing Home Compare 
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Medicare website (or a successor website) de-
scribed in section 1819(i) information on the 
performance of skilled nursing facilities with re-
spect to a measure specified under paragraph 
(1) and a measure specified under paragraph 
(2). 
‘‘(B) OPPORTUNITY TO REVIEW.—The pro-
cedures under subparagraph (A) shall ensure 
that a skilled nursing facility has the oppor-
tunity to review and submit corrections to the 
information that is to be made public with re-
spect to the facility prior to such information 
being made public. 
‘‘(C) TIMING.—Such procedures shall pro-
vide that the information described in subpara-
graph (A) is made publicly available beginning 
not later than October 1, 2017. 
‘‘(7) NON-APPLICATION OF PAPERWORK REDUC-
TION ACT.—Chapter 35 of title 44, United States 
Code (commonly referred to as the ‘Paperwork Re-
duction Act of 1995’) shall not apply to this sub-
section.’’. 
(b) VALUE-BASED
PURCHASING
PROGRAM
FOR 
SKILLED NURSING FACILITIES.—Section 1888 of the So-
cial Security Act (42 U.S.C. 1395yy), as amended by sub-
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section (a), is further amended by adding at the end the 
following new subsection: 
‘‘(h) SKILLED NURSING FACILITY VALUE-BASED 
PURCHASING PROGRAM.— 
‘‘(1) ESTABLISHMENT.— 
‘‘(A) IN
GENERAL.—Subject to the suc-
ceeding provisions of this subsection, the Sec-
retary shall establish a skilled nursing facility 
value-based purchasing program (in this sub-
section referred to as the ‘SNF VBP Program’) 
under which value-based incentive payments are 
made in a fiscal year to skilled nursing facili-
ties. 
‘‘(B) PROGRAM TO BEGIN IN FISCAL YEAR 
2019.—The SNF VBP Program shall apply to 
payments for services furnished on or after Oc-
tober 1, 2018. 
‘‘(2) APPLICATION OF MEASURES.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
apply the measure specified under subsection 
(g)(1) for purposes of the SNF VBP Program. 
‘‘(B) REPLACEMENT.—For purposes of the 
SNF VBP Program, the Secretary shall apply 
the measure specified under (g)(2) instead of 
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the measure specified under (g)(1) as soon as 
practicable. 
‘‘(3) PERFORMANCE STANDARDS.— 
‘‘(A) 
ESTABLISHMENT.—The 
Secretary 
shall establish performance standards with re-
spect to the measure applied under paragraph 
(2) for a performance period for a fiscal year. 
‘‘(B) HIGHER OF ACHIEVEMENT AND IM-
PROVEMENT.—The performance standards es-
tablished under subparagraph (A) shall include 
levels of achievement and improvement. In cal-
culating the SNF performance score under 
paragraph (4), the Secretary shall use the high-
er of either improvement or achievement. 
‘‘(C) TIMING.—The Secretary shall estab-
lish and announce the performance standards 
established under subparagraph (A) not later 
than 60 days prior to the beginning of the per-
formance period for the fiscal year involved. 
‘‘(4) SNF PERFORMANCE SCORE.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
develop a methodology for assessing the total 
performance of each skilled nursing facility 
based on performance standards established 
under paragraph (3) with respect to the meas-
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ure applied under paragraph (2). Using such 
methodology, the Secretary shall provide for an 
assessment (in this subsection referred to as the 
‘SNF performance score’) for each skilled nurs-
ing facility for each such performance period. 
‘‘(B) RANKING
OF
SNF
PERFORMANCE 
SCORES.—The Secretary shall, for the perform-
ance period for each fiscal year, rank the SNF 
performance scores determined under subpara-
graph (A) from low to high. 
‘‘(5) CALCULATION
OF
VALUE-BASED
INCEN-
TIVE PAYMENTS.— 
‘‘(A) IN
GENERAL.—With respect to a 
skilled nursing facility, based on the ranking 
under paragraph (4)(B) for a performance pe-
riod for a fiscal year, the Secretary shall in-
crease the adjusted Federal per diem rate de-
termined under subsection (e)(4)(G) otherwise 
applicable to such skilled nursing facility (and 
after application of paragraph (6)) for services 
furnished by such facility during such fiscal 
year by the value-based incentive payment 
amount under subparagraph (B). 
‘‘(B) VALUE-BASED INCENTIVE PAYMENT 
AMOUNT.—The value-based incentive payment 
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amount for services furnished by a skilled nurs-
ing facility in a fiscal year shall be equal to the 
product of— 
‘‘(i) the adjusted Federal per diem 
rate determined under subsection (e)(4)(G) 
otherwise applicable to such skilled nursing 
facility for such services furnished by the 
skilled nursing facility during such fiscal 
year; and 
‘‘(ii) the value-based incentive pay-
ment percentage specified under subpara-
graph (C) for the skilled nursing facility 
for such fiscal year. 
‘‘(C) VALUE-BASED INCENTIVE PAYMENT 
PERCENTAGE.— 
‘‘(i) IN
GENERAL.—The Secretary 
shall specify a value-based incentive pay-
ment percentage for a skilled nursing facil-
ity for a fiscal year which may include a 
zero percentage. 
‘‘(ii) REQUIREMENTS.—In specifying 
the value-based incentive payment percent-
age for each skilled nursing facility for a 
fiscal year under clause (i), the Secretary 
shall ensure that— 
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‘‘(I) such percentage is based on 
the SNF performance score of the 
skilled nursing facility provided under 
paragraph (4) for the performance pe-
riod for such fiscal year; 
‘‘(II) the application of all such 
percentages in such fiscal year results 
in an appropriate distribution of 
value-based incentive payments under 
subparagraph (B) such that— 
‘‘(aa) skilled nursing facili-
ties with the highest rankings 
under paragraph (4)(B) receive 
the highest value-based incentive 
payment amounts under subpara-
graph (B); 
‘‘(bb) skilled nursing facili-
ties with the lowest rankings 
under paragraph (4)(B) receive 
the lowest value-based incentive 
payment amounts under subpara-
graph (B); and 
‘‘(cc) in the case of skilled 
nursing facilities in the lowest 40 
percent of the ranking under 
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paragraph (4)(B), the payment 
rate under subparagraph (A) for 
services furnished by such facility 
during such fiscal year shall be 
less than the payment rate for 
such services for such fiscal year 
that would otherwise apply under 
subsection (e)(4)(G) without ap-
plication of this subsection; and 
‘‘(III) the total amount of value- 
based incentive payments under this 
paragraph for all skilled nursing fa-
cilities in such fiscal year shall be 
greater than or equal to 50 percent, 
but not greater than 70 percent, of 
the total amount of the reductions to 
payments for such fiscal year under 
paragraph (6), as estimated by the 
Secretary. 
‘‘(6) FUNDING FOR VALUE-BASED INCENTIVE 
PAYMENTS.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
reduce the adjusted Federal per diem rate de-
termined under subsection (e)(4)(G) otherwise 
applicable to a skilled nursing facility for serv-
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ices furnished by such facility during a fiscal 
year (beginning with fiscal year 2019) by the 
applicable percent (as defined in subparagraph 
(B)). The Secretary shall make such reductions 
for all skilled nursing facilities in the fiscal year 
involved, regardless of whether or not the 
skilled nursing facility has been determined by 
the Secretary to have earned a value-based in-
centive payment under paragraph (5) for such 
fiscal year. 
‘‘(B) APPLICABLE
PERCENT.—For pur-
poses of subparagraph (A), the term ‘applicable 
percent’ means, with respect to fiscal year 2019 
and succeeding fiscal years, 2 percent. 
‘‘(7) ANNOUNCEMENT OF NET RESULT OF AD-
JUSTMENTS.—Under the SNF VBP Program, the 
Secretary shall, not later than 60 days prior to the 
fiscal year involved, inform each skilled nursing fa-
cility of the adjustments to payments to the skilled 
nursing facility for services furnished by such facility 
during the fiscal year under paragraphs (5) and (6). 
‘‘(8) NO
EFFECT
IN
SUBSEQUENT
FISCAL 
YEARS.—The value-based incentive payment under 
paragraph (5) and the payment reduction under 
paragraph (6) shall each apply only with respect to 
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the fiscal year involved, and the Secretary shall not 
take into account such value-based incentive pay-
ment or payment reduction in making payments to 
a skilled nursing facility under this section in a sub-
sequent fiscal year. 
‘‘(9) PUBLIC REPORTING.— 
‘‘(A) SNF SPECIFIC INFORMATION.—The 
Secretary shall make available to the public, by 
posting on the Nursing Home Compare Medi-
care website (or a successor website) described 
in section 1819(i) in an easily understandable 
format, information regarding the performance 
of individual skilled nursing facilities under the 
SNF VBP Program, with respect to a fiscal 
year, including— 
‘‘(i) the SNF performance score of the 
skilled nursing facility for such fiscal year; 
and 
‘‘(ii) the ranking of the skilled nursing 
facility under paragraph (4)(B) for the 
performance period for such fiscal year. 
‘‘(B) 
AGGREGATE
INFORMATION.—The 
Secretary shall periodically post on the Nursing 
Home Compare Medicare website (or a suc-
cessor website) described in section 1819(i) ag-
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‘‘(D) The methodology developed under 
paragraph (4) that is used to calculate SNF 
performance scores and the calculation of such 
scores. 
‘‘(E) The ranking determinations under 
paragraph (4)(B). 
‘‘(11) 
FUNDING
FOR
PROGRAM
MANAGE-
MENT.—The Secretary shall provide for the one time 
transfer from the Federal Hospital Insurance Trust 
Fund established under section 1817 to the Centers 
for Medicare & Medicaid Services Program Manage-
ment Account of— 
‘‘(A) for purposes of subsection (g)(2), 
$2,000,000; and 
‘‘(B) for purposes of implementing this 
subsection, $10,000,000. 
Such funds shall remain available until expended.’’. 
(c) MEDPAC STUDY.—Not later than June 30, 
2021, the Medicare Payment Advisory Commission shall 
submit to Congress a report that reviews the progress of 
the skilled nursing facility value-based purchasing pro-
gram established under section 1888(h) of the Social Se-
curity Act, as added by subsection (b), and makes rec-
ommendations, as appropriate, on any improvements that 
should be made to such program. For purposes of the pre-
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vious sentence, the Medicare Payment Advisory Commis-
sion shall consider any unintended consequences with re-
spect to such skilled nursing facility value-based pur-
chasing program and any potential adjustments to the re-
admission measure specified under section 1888(g)(1) of 
such Act, as added by subsection (a), for purposes of de-
termining the effect of the socio-economic status of a bene-
ficiary under the Medicare program under title XVIII of 
the Social Security Act for the SNF performance score 
of a skilled nursing facility provided under section 
1888(h)(4) of such Act, as added by subsection (b). 
SEC. 216. IMPROVING MEDICARE POLICIES FOR CLINICAL 
DIAGNOSTIC LABORATORY TESTS. 
(a) IN GENERAL.—Title XVIII of the Social Security 
Act is amended by inserting after section 1834 (42 U.S.C. 
1395m) the following new section: 
‘‘SEC. 1834A. IMPROVING POLICIES FOR CLINICAL DIAG-
NOSTIC LABORATORY TESTS. 
‘‘(a) REPORTING
OF PRIVATE SECTOR PAYMENT 
RATES FOR ESTABLISHMENT OF MEDICARE PAYMENT 
RATES.— 
‘‘(1) IN
GENERAL.—Beginning January 1, 
2016, and every 3 years thereafter (or, annually, in 
the case of reporting with respect to an advanced di-
agnostic laboratory test, as defined in subsection 
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(d)(5)), an applicable laboratory (as defined in para-
graph (2)) shall report to the Secretary, at a time 
specified by the Secretary, applicable information (as 
defined in paragraph (3)) for a data collection pe-
riod (as defined in paragraph (4)) for each clinical 
diagnostic laboratory test that the laboratory fur-
nishes during such period for which payment is 
made under this part. 
‘‘(2) DEFINITION
OF
APPLICABLE
LABORA-
TORY.—In this section, the term ‘applicable labora-
tory’ means a laboratory that, with respect to its 
revenues under this title, a majority of such reve-
nues are from this section, section 1833(h), or sec-
tion 1848. The Secretary may establish a low vol-
ume or low expenditure threshold for excluding a 
laboratory from the definition of applicable labora-
tory under this paragraph, as the Secretary deter-
mines appropriate. 
‘‘(3) APPLICABLE INFORMATION DEFINED.— 
‘‘(A) IN GENERAL.—In this section, sub-
ject to subparagraph (B), the term ‘applicable 
information’ means, with respect to a labora-
tory test for a data collection period, the fol-
lowing: 
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‘‘(i) The payment rate (as determined 
in accordance with paragraph (5)) that 
was paid by each private payor for the test 
during the period. 
‘‘(ii) The volume of such tests for 
each such payor for the period. 
‘‘(B) EXCEPTION FOR CERTAIN CONTRAC-
TUAL
ARRANGEMENTS.—Such term shall not 
include information with respect to a laboratory 
test for which payment is made on a capitated 
basis or other similar payment basis during the 
data collection period. 
‘‘(4) DATA COLLECTION PERIOD DEFINED.—In 
this section, the term ‘data collection period’ means 
a period of time, such as a previous 12 month pe-
riod, specified by the Secretary. 
‘‘(5) TREATMENT
OF
DISCOUNTS.—The pay-
ment rate reported by a laboratory under this sub-
section shall reflect all discounts, rebates, coupons, 
and other price concessions, including those de-
scribed in section 1847A(c)(3). 
‘‘(6) ENSURING
COMPLETE
REPORTING.—In 
the case where an applicable laboratory has more 
than one payment rate for the same payor for the 
same test or more than one payment rate for dif-
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ferent payors for the same test, the applicable lab-
oratory shall report each such payment rate and the 
volume for the test at each such rate under this sub-
section. Beginning with January 1, 2019, the Sec-
retary may establish rules to aggregate reporting 
with respect to the situations described in the pre-
ceding sentence. 
‘‘(7) CERTIFICATION.—An officer of the labora-
tory shall certify the accuracy and completeness of 
the information reported under this subsection. 
‘‘(8) PRIVATE PAYOR DEFINED.—In this sec-
tion, the term ‘private payor’ means the following: 
‘‘(A) A health insurance issuer and a 
group health plan (as such terms are defined in 
section 2791 of the Public Health Service Act). 
‘‘(B) A Medicare Advantage plan under 
part C. 
‘‘(C) A medicaid managed care organiza-
tion (as defined in section 1903(m)). 
‘‘(9) CIVIL MONEY PENALTY.— 
‘‘(A) IN GENERAL.—If the Secretary deter-
mines that an applicable laboratory has failed 
to report or made a misrepresentation or omis-
sion in reporting information under this sub-
section with respect to a clinical diagnostic lab-
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oratory test, the Secretary may apply a civil 
money penalty in an amount of up to $10,000 
per day for each failure to report or each such 
misrepresentation or omission. 
‘‘(B) APPLICATION.—The provisions of 
section 1128A (other than subsections (a) and 
(b)) shall apply to a civil money penalty under 
this paragraph in the same manner as they 
apply to a civil money penalty or proceeding 
under section 1128A(a). 
‘‘(10) CONFIDENTIALITY
OF
INFORMATION.— 
Notwithstanding any other provision of law, infor-
mation disclosed by a laboratory under this sub-
section is confidential and shall not be disclosed by 
the Secretary or a Medicare contractor in a form 
that discloses the identity of a specific payor or lab-
oratory, or prices charged or payments made to any 
such laboratory, except— 
‘‘(A) as the Secretary determines to be 
necessary to carry out this section; 
‘‘(B) to permit the Comptroller General to 
review the information provided; 
‘‘(C) to permit the Director of the Con-
gressional Budget Office to review the informa-
tion provided; and 
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‘‘(D) to permit the Medicare Payment Ad-
visory Commission to review the information 
provided. 
‘‘(11) PROTECTION
FROM
PUBLIC
DISCLO-
SURE.—A payor shall not be identified on informa-
tion reported under this subsection. The name of an 
applicable laboratory under this subsection shall be 
exempt from disclosure under section 552(b)(3) of 
title 5, United States Code. 
‘‘(12) REGULATIONS.—Not later than June 30, 
2015, the Secretary shall establish through notice 
and comment rulemaking parameters for data collec-
tion under this subsection. 
‘‘(b) PAYMENT FOR CLINICAL DIAGNOSTIC LABORA-
TORY TESTS.— 
‘‘(1) USE OF PRIVATE PAYOR RATE INFORMA-
TION TO DETERMINE MEDICARE PAYMENT RATES.— 
‘‘(A) IN GENERAL.—Subject to paragraph 
(3) and subsections (c) and (d), in the case of 
a clinical diagnostic laboratory test furnished on 
or after January 1, 2017, the payment amount 
under this section shall be equal to the weighted 
median determined for the test under para-
graph (2) for the most recent data collection 
period. 
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‘‘(B) APPLICATION OF PAYMENT AMOUNTS 
TO
HOSPITAL
LABORATORIES.—The payment 
amounts established under this section shall 
apply to a clinical diagnostic laboratory test 
furnished by a hospital laboratory if such test 
is paid for separately, and not as part of a bun-
dled payment under section 1833(t). 
‘‘(2) CALCULATION OF WEIGHTED MEDIAN.— 
For each laboratory test with respect to which infor-
mation is reported under subsection (a) for a data 
collection period, the Secretary shall calculate a 
weighted median for the test for the period, by 
arraying the distribution of all payment rates re-
ported for the period for each test weighted by vol-
ume for each payor and each laboratory. 
‘‘(3) PHASE-IN OF REDUCTIONS FROM PRIVATE 
PAYOR RATE IMPLEMENTATION.— 
‘‘(A) IN GENERAL.—Payment amounts de-
termined under this subsection for a clinical di-
agnostic laboratory test for each of 2017 
through 2022 shall not result in a reduction in 
payments for a clinical diagnostic laboratory 
test for the year of greater than the applicable 
percent (as defined in subparagraph (B)) of the 
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amount of payment for the test for the pre-
ceding year. 
‘‘(B) APPLICABLE PERCENT DEFINED.—In 
this paragraph, the term ‘applicable percent’ 
means— 
‘‘(i) for each of 2017 through 2019, 
10 percent; and 
‘‘(ii) for each of 2020 through 2022, 
15 percent. 
‘‘(C) NO APPLICATION TO NEW TESTS.— 
This paragraph shall not apply to payment 
amounts determined under this section for ei-
ther of the following. 
‘‘(i) A new test under subsection (c). 
‘‘(ii) A new advanced diagnostic test 
(as defined in subsection (d)(5)) under 
subsection (d). 
‘‘(4) APPLICATION OF MARKET RATES.— 
‘‘(A) IN GENERAL.—Subject to paragraph 
(3), once established for a year following a data 
collection period, the payment amounts under 
this subsection shall continue to apply until the 
year following the next data collection period. 
‘‘(B) OTHER ADJUSTMENTS NOT APPLICA-
BLE.—The payment amounts under this section 
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shall not be subject to any adjustment (includ-
ing any geographic adjustment, budget neu-
trality adjustment, annual update, or other ad-
justment). 
‘‘(5) SAMPLE COLLECTION FEE.—In the case of 
a sample collected from an individual in a skilled 
nursing facility or by a laboratory on behalf of a 
home health agency, the nominal fee that would oth-
erwise apply under section 1833(h)(3)(A) shall be 
increased by $2. 
‘‘(c) PAYMENT FOR NEW TESTS THAT ARE NOT AD-
VANCED DIAGNOSTIC LABORATORY TESTS.— 
‘‘(1) PAYMENT
DURING
INITIAL
PERIOD.—In 
the case of a clinical diagnostic laboratory test that 
is assigned a new or substantially revised HCPCS 
code on or after the date of enactment of this sec-
tion, and which is not an advanced diagnostic lab-
oratory test (as defined in subsection (d)(5)), during 
an initial period until payment rates under sub-
section (b) are established for the test, payment for 
the test shall be determined— 
‘‘(A) using cross-walking (as described in 
section 414.508(a) of title 42, Code of Federal 
Regulations, or any successor regulation) to the 
most appropriate existing test under the fee 
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schedule under this section during that period; 
or 
‘‘(B) if no existing test is comparable to 
the new test, according to the gapfilling process 
described in paragraph (2). 
‘‘(2) GAPFILLING
PROCESS
DESCRIBED.—The 
gapfilling process described in this paragraph shall 
take into account the following sources of informa-
tion to determine gapfill amounts, if available: 
‘‘(A) Charges for the test and routine dis-
counts to charges. 
‘‘(B) Resources required to perform the 
test. 
‘‘(C) Payment amounts determined by 
other payors. 
‘‘(D) Charges, payment amounts, and re-
sources required for other tests that may be 
comparable or otherwise relevant. 
‘‘(E) Other criteria the Secretary deter-
mines appropriate. 
‘‘(3) ADDITIONAL CONSIDERATION.—In deter-
mining the payment amount under crosswalking or 
gapfilling processes under this subsection, the Sec-
retary shall consider recommendations from the 
panel established under subsection (f)(1). 
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‘‘(4) EXPLANATION
OF
PAYMENT
RATES.—In 
the case of a clinical diagnostic laboratory test for 
which payment is made under this subsection, the 
Secretary shall make available to the public an ex-
planation of the payment rate for the test, including 
an explanation of how the criteria described in para-
graph (2) and paragraph (3) are applied. 
‘‘(d) PAYMENT FOR NEW ADVANCED DIAGNOSTIC 
LABORATORY TESTS.— 
‘‘(1) PAYMENT DURING INITIAL PERIOD.— 
‘‘(A) IN GENERAL.—In the case of an ad-
vanced diagnostic laboratory test for which pay-
ment has not been made under the fee schedule 
under section 1833(h) prior to the date of en-
actment of this section, during an initial period 
of three quarters, the payment amount for the 
test for such period shall be based on the actual 
list charge for the laboratory test. 
‘‘(B) ACTUAL
LIST
CHARGE.—For pur-
poses of subparagraph (A), the term ‘actual list 
charge’, with respect to a laboratory test fur-
nished during such period, means the publicly 
available rate on the first day at which the test 
is available for purchase by a private payor. 
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‘‘(2) SPECIAL RULE FOR TIMING OF INITIAL 
REPORTING.—With respect to an advanced diag-
nostic laboratory test described in paragraph (1)(A), 
an applicable laboratory shall initially be required to 
report under subsection (a) not later than the last 
day of the second quarter of the initial period under 
such paragraph. 
‘‘(3) APPLICATION OF MARKET RATES AFTER 
INITIAL PERIOD.—Subject to paragraph (4), data re-
ported under paragraph (2) shall be used to estab-
lish the payment amount for an advanced diagnostic 
laboratory test after the initial period under para-
graph (1)(A) using the methodology described in 
subsection (b). Such payment amount shall continue 
to apply until the year following the next data collec-
tion period. 
‘‘(4) RECOUPMENT
IF
ACTUAL
LIST
CHARGE 
EXCEEDS MARKET RATE.—With respect to the initial 
period described in paragraph (1)(A), if, after such 
period, the Secretary determines that the payment 
amount for an advanced diagnostic laboratory test 
under paragraph (1)(A) that was applicable during 
the period was greater than 130 percent of the pay-
ment amount for the test established using the 
methodology described in subsection (b) that is ap-
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plicable after such period, the Secretary shall recoup 
the difference between such payment amounts for 
tests furnished during such period. 
‘‘(5) 
ADVANCED
DIAGNOSTIC
LABORATORY 
TEST DEFINED.—In this subsection, the term ‘ad-
vanced diagnostic laboratory test’ means a clinical 
diagnostic laboratory test covered under this part 
that is offered and furnished only by a single labora-
tory and not sold for use by a laboratory other than 
the original developing laboratory (or a successor 
owner) and meets one of the following criteria: 
‘‘(A) The test is an analysis of multiple 
biomarkers of DNA, RNA, or proteins com-
bined with a unique algorithm to yield a single 
patient-specific result. 
‘‘(B) The test is cleared or approved by the 
Food and Drug Administration. 
‘‘(C) The test meets other similar criteria 
established by the Secretary. 
‘‘(e) CODING.— 
‘‘(1) TEMPORARY
CODES
FOR
CERTAIN
NEW 
TESTS.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
adopt temporary HCPCS codes to identify new 
advanced diagnostic laboratory tests (as defined 
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in subsection (d)(5)) and new laboratory tests 
that are cleared or approved by the Food and 
Drug Administration. 
‘‘(B) DURATION.— 
‘‘(i) IN GENERAL.—Subject to clause 
(ii), the temporary code shall be effective 
until a permanent HCPCS code is estab-
lished (but not to exceed 2 years). 
‘‘(ii) 
EXCEPTION.—The 
Secretary 
may extend the temporary code or estab-
lish a permanent HCPCS code, as the Sec-
retary determines appropriate. 
‘‘(2) EXISTING TESTS.—Not later than January 
1, 2016, for each existing advanced diagnostic lab-
oratory test (as so defined) and each existing clinical 
diagnostic laboratory test that is cleared or approved 
by the Food and Drug Administration for which 
payment is made under this part as of the date of 
enactment of this section, if such test has not al-
ready been assigned a unique HCPCS code, the Sec-
retary shall— 
‘‘(A) assign a unique HCPCS code for the 
test; and 
‘‘(B) publicly report the payment rate for 
the test. 
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‘‘(3) ESTABLISHMENT OF UNIQUE IDENTIFIER 
FOR CERTAIN TESTS.—For purposes of tracking and 
monitoring, if a laboratory or a manufacturer re-
quests a unique identifier for an advanced diagnostic 
laboratory test (as so defined) or a laboratory test 
that is cleared or approved by the Food and Drug 
Administration, the Secretary shall utilize a means 
to uniquely track such test through a mechanism 
such as a HCPCS code or modifier. 
‘‘(f) INPUT FROM CLINICIANS AND TECHNICAL EX-
PERTS.— 
‘‘(1) IN GENERAL.—The Secretary shall consult 
with an expert outside advisory panel, established by 
the Secretary not later than July 1, 2015, composed 
of an appropriate selection of individuals with exper-
tise, which may include molecular pathologists, re-
searchers, and individuals with expertise in labora-
tory science or health economics, in issues related to 
clinical diagnostic laboratory tests, which may in-
clude the development, validation, performance, and 
application of such tests, to provide— 
‘‘(A) input on— 
‘‘(i) the establishment of payment 
rates under this section for new clinical di-
agnostic laboratory tests, including wheth-
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er to use crosswalking or gapfilling proc-
esses to determine payment for a specific 
new test; and 
‘‘(ii) the factors used in determining 
coverage and payment processes for new 
clinical diagnostic laboratory tests; and 
‘‘(B) recommendations to the Secretary 
under this section. 
‘‘(2) COMPLIANCE
WITH
FACA.—The panel 
shall be subject to the Federal Advisory Committee 
Act (5 U.S.C. App.). 
‘‘(3) CONTINUATION OF ANNUAL MEETING.— 
The Secretary shall continue to convene the annual 
meeting described in section 1833(h)(8)(B)(iii) after 
the implementation of this section for purposes of 
receiving comments and recommendations (and data 
on which the recommendations are based) as de-
scribed in such section on the establishment of pay-
ment amounts under this section. 
‘‘(g) COVERAGE.— 
‘‘(1) ISSUANCE OF COVERAGE POLICIES.— 
‘‘(A) IN GENERAL.—A medicare adminis-
trative contractor shall only issue a coverage 
policy with respect to a clinical diagnostic lab-
oratory test in accordance with the process for 
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making a local coverage determination (as de-
fined in section 1869(f)(2)(B)), including the 
appeals and review process for local coverage 
determinations under part 426 of title 42, Code 
of Federal Regulations (or successor regula-
tions). 
‘‘(B) NO EFFECT ON NATIONAL COVERAGE 
DETERMINATION
PROCESS.—This 
paragraph 
shall not apply to the national coverage deter-
mination 
process 
(as 
defined 
in 
section 
1869(f)(1)(B)). 
‘‘(C) EFFECTIVE DATE.—This paragraph 
shall apply to coverage policies issued on or 
after January 1, 2015. 
‘‘(2) DESIGNATION OF ONE OR MORE MEDICARE 
ADMINISTRATIVE CONTRACTORS FOR CLINICAL DIAG-
NOSTIC
LABORATORY
TESTS.—The Secretary may 
designate one or more (not to exceed 4) medicare 
administrative contractors to either establish cov-
erage policies or establish coverage policies and proc-
ess claims for payment for clinical diagnostic labora-
tory tests, as determined appropriate by the Sec-
retary. 
‘‘(h) IMPLEMENTATION.— 
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‘‘(1) IMPLEMENTATION.—There shall be no ad-
ministrative or judicial review under section 1869, 
section 1878, or otherwise, of the establishment of 
payment amounts under this section. 
‘‘(2) ADMINISTRATION.—Chapter 35 of title 44, 
United States Code, shall not apply to information 
collected under this section. 
‘‘(3) FUNDING.—For purposes of implementing 
this section, the Secretary shall provide for the 
transfer, from the Federal Supplementary Medical 
Insurance Trust Fund under section 1841, to the 
Centers for Medicare & Medicaid Services Program 
Management Account, for each of fiscal years 2014 
through 2018, $4,000,000, and for each of fiscal 
years 2019 through 2023, $3,000,000. Amounts 
transferred under the preceding sentence shall re-
main available until expended. 
‘‘(i) TRANSITIONAL RULE.—During the period begin-
ning on the date of enactment of this section and ending 
on December 31, 2016, with respect to advanced diag-
nostic laboratory tests under this part, the Secretary shall 
use the methodologies for pricing, coding, and coverage 
in effect on the day before such date of enactment, which 
may include cross-walking or gapfilling methods.’’. 
(b) CONFORMING AMENDMENTS.— 
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(1) Section 1833(a) of the Social Security Act 
(42 U.S.C. 1395l(a)) is amended— 
(A) in paragraph (1)(D)— 
(i) by striking ‘‘(i) on the basis’’ and 
inserting ‘‘(i)(I) on the basis’’; 
(ii) in subclause (I), as added by 
clause (i), by striking ‘‘subsection (h)(1)’’ 
and inserting ‘‘subsection (h)(1) (for tests 
furnished before January 1, 2017)’’; 
(iii) by striking ‘‘or (ii)’’ and inserting 
‘‘or (II) under section 1834A (for tests 
furnished on or after January 1, 2017), 
the amount paid shall be equal to 80 per-
cent (or 100 percent, in the case of such 
tests for which payment is made on an as-
signment-related basis) of the lesser of the 
amount determined under such section or 
the amount of the charges billed for the 
tests, or (ii)’’; and 
(iv) in clause (ii), by striking ‘‘on the 
basis’’ and inserting ‘‘for tests furnished 
before January 1, 2017, on the basis’’; 
(B) in paragraph (2)(D)— 
(i) by striking ‘‘(i) on the basis’’ and 
inserting ‘‘(i)(I) on the basis’’; 
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(ii) in subclause (I), as added by 
clause (i), by striking ‘‘subsection (h)(1)’’ 
and inserting ‘‘subsection (h)(1) (for tests 
furnished before January 1, 2017)’’; 
(iii) by striking ‘‘or (ii)’’ and inserting 
‘‘or (II) under section 1834A (for tests 
furnished on or after January 1, 2017), 
the amount paid shall be equal to 80 per-
cent (or 100 percent, in the case of such 
tests for which payment is made on an as-
signment-related basis or to a provider 
having an agreement under section 1866) 
of the lesser of the amount determined 
under such section or the amount of the 
charges billed for the tests, or (ii)’’; and 
(iv) in clause (ii), by striking ‘‘on the 
basis’’ and inserting ‘‘for tests furnished 
before January 1, 2017, on the basis’’; 
(C) in subsection (b)(3)(B), by striking 
‘‘on the basis’’ and inserting ‘‘for tests fur-
nished before January 1, 2017, on the basis’’; 
(D) in subsection (h)(2)(A)(i), by striking 
‘‘and subject to’’ and inserting ‘‘and, for tests 
furnished before the date of enactment of sec-
tion 1834A, subject to’’; 
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(E) in subsection (h)(3), in the matter pre-
ceding subparagraph (A), by striking ‘‘fee 
schedules’’ and inserting ‘‘fee schedules (for 
tests furnished before January 1, 2017) or 
under section 1834A (for tests furnished on or 
after January 1, 2017), subject to subsection 
(b)(5) of such section’’; 
(F) in subsection (h)(6), by striking ‘‘In 
the case’’ and inserting ‘‘For tests furnished be-
fore January 1, 2017, in the case’’; and 
(G) in subsection (h)(7), in the first sen-
tence— 
(i) by striking ‘‘and (4)’’ and inserting 
‘‘and (4) and section 1834A’’; and 
(ii) by striking ‘‘under this sub-
section’’ and inserting ‘‘under this part’’. 
(2) Section 1869(f)(2) of the Social Security 
Act (42 U.S.C. 1395ff(f)(2)) is amended by adding 
at the end the following new subparagraph: 
‘‘(C) LOCAL COVERAGE DETERMINATIONS 
FOR
CLINICAL
DIAGNOSTIC
LABORATORY 
TESTS.—For provisions relating to local cov-
erage determinations for clinical diagnostic lab-
oratory tests, see section 1834A(g).’’. 
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(c) GAO STUDY
AND REPORT; MONITORING
OF 
MEDICARE EXPENDITURES
AND IMPLEMENTATION
OF 
NEW PAYMENT SYSTEM FOR LABORATORY TESTS.— 
(1) GAO STUDY AND REPORT ON IMPLEMENTA-
TION OF NEW PAYMENT RATES FOR CLINICAL DIAG-
NOSTIC LABORATORY TESTS.— 
(A) STUDY.—The Comptroller General of 
the United States (in this subsection referred to 
as the ‘‘Comptroller General’’) shall conduct a 
study on the implementation of section 1834A 
of the Social Security Act, as added by sub-
section (a). The study shall include an analysis 
of— 
(i) payment rates paid by private 
payors for laboratory tests furnished in 
various settings, including— 
(I) how such payment rates com-
pare across settings; 
(II) the trend in payment rates 
over time; and 
(III) trends by private payors to 
move to alternative payment meth-
odologies for laboratory tests; 
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(ii) the conversion to the new payment 
rate for laboratory tests under such sec-
tion; 
(iii) the impact of such implementa-
tion on beneficiary access under title 
XVIII of the Social Security Act; 
(iv) the impact of the new payment 
system on laboratories that furnish a low 
volume of services and laboratories that 
specialize in a small number of tests; 
(v) the number of new Healthcare 
Common 
Procedure 
Coding 
System 
(HCPCS) codes issued for laboratory tests; 
(vi) the spending trend for laboratory 
tests under such title; 
(vii) whether the information reported 
by laboratories and the new payment rates 
for laboratory tests under such section ac-
curately reflect market prices; 
(viii) the initial list price for new lab-
oratory tests and the subsequent reported 
rates for such tests under such section; 
(ix) changes in the number of ad-
vanced diagnostic laboratory tests and lab-
oratory tests cleared or approved by the 
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Food and Drug Administration for which 
payment is made under such section; and 
(x) healthcare economic information 
on downstream cost impacts for such tests 
and decision making based on accepted 
methodologies. 
(B) REPORT.—Not later than October 1, 
2018, the Comptroller General shall submit to 
the Committee on Ways and Means and the 
Committee on Energy and Commerce of the 
House of Representatives and the Committee 
on Finance of the Senate a report on the study 
under 
subparagraph 
(A), 
including 
rec-
ommendations for such legislation and adminis-
trative action as the Comptroller General deter-
mines appropriate. 
(2) MONITORING OF MEDICARE EXPENDITURES 
AND IMPLEMENTATION OF NEW PAYMENT SYSTEM 
FOR LABORATORY TESTS.—The Inspector General of 
the Department of Health and Human Services 
shall— 
(A) publicly release an annual analysis of 
the top 25 laboratory tests by expenditures 
under title XVIII of the Social Security Act; 
and 
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(B) conduct analyses the Inspector General 
determines appropriate with respect to the im-
plementation and effect of the new payment 
system for laboratory tests under section 1834A 
of the Social Security Act, as added by sub-
section (a). 
SEC. 217. REVISIONS UNDER THE MEDICARE ESRD PRO-
SPECTIVE PAYMENT SYSTEM. 
(a) DELAY
OF IMPLEMENTATION
OF ORAL-ONLY 
POLICY.—Section 632(b)(1) of the American Taxpayer 
Relief Act of 2012 (42 U.S.C. 1395rr note) is amended— 
(1) by striking ‘‘2016’’ and inserting ‘‘2024’’; 
and 
(2) by adding at the end the following new sen-
tence: ‘‘Notwithstanding section 1881(b)(14)(A)(ii) 
of 
the 
Social 
Security 
Act 
(42 
U.S.C. 
1395rr(b)(14)(A)(ii)), implementation of the policy 
described in the previous sentence shall be based on 
data from the most recent year available.’’. 
(b) MITIGATION OF THE APPLICATION OF ADJUST-
MENT TO ESRD BUNDLED PAYMENT RATE TO ACCOUNT 
FOR CHANGES IN THE UTILIZATION OF CERTAIN DRUGS 
AND BIOLOGICALS.— 
(1) IN
GENERAL.—Section 1881(b)(14)(I) of 
the Social Security Act (42 U.S.C. 1395rr(b)(14)(I)) 
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is amended by inserting ‘‘and before January 1, 
2015,’’ after ‘‘January 1, 2014,’’. 
(2) 
MARKET
BASKET.—Section 
1881(b)(14)(F)(i) of the Social Security Act (42 
U.S.C. 1395rr(b)(14)(F)(i)) is amended— 
(A) in subclause (I)— 
(i) by striking ‘‘subclause (II)’’ and 
inserting ‘‘subclauses (II) and (III)’’; and 
(ii) by adding at the end the following 
new sentence: ‘‘In order to accomplish the 
purposes of subparagraph (I) with respect 
to 2016, 2017, and 2018, after deter-
mining the increase factor described in the 
preceding sentence for each of 2016, 2017, 
and 2018, the Secretary shall reduce such 
increase factor by 1.25 percentage points 
for each of 2016 and 2017 and by 1 per-
centage point for 2018.’’; 
(B) in subclause (II), by striking ‘‘For 
2012’’ and inserting ‘‘Subject to subclause 
(III), for 2012’’; and 
(C) by adding at the end the following new 
subclause: 
‘‘(III) Notwithstanding subclauses (I) and (II), 
in order to accomplish the purposes of subparagraph 
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(I) with respect to 2015, the increase factor de-
scribed in subclause (I) for 2015 shall be 0.0 percent 
pursuant to the regulation issued by the Secretary 
on December 2, 2013, entitled ‘Medicare Program; 
End-Stage Renal Disease Prospective Payment Sys-
tem, Quality Incentive Program, and Durable Med-
ical Equipment, Prosthetics, Orthotics, and Supplies; 
Final Rule’ (78 Fed. Reg. 72156).’’. 
(c) DRUG DESIGNATIONS.—As part of the promulga-
tion of annual rule for the Medicare end stage renal dis-
ease 
prospective 
payment 
system 
under 
section 
1881(b)(14) of the Social Security Act (42 U.S.C. 
1395rr(b)(14)) for calendar year 2016, the Secretary of 
Health and Human Services (in this subsection referred 
to as the ‘‘Secretary’’) shall establish a process for— 
(1) determining when a product is no longer an 
oral-only drug; and 
(2) including new injectable and intravenous 
products into the bundled payment under such sys-
tem. 
(d) QUALITY MEASURES RELATED TO CONDITIONS 
TREATED BY ORAL-ONLY DRUGS UNDER THE ESRD 
QUALITY INCENTIVE PROGRAM.—Section 1881(h)(2) of 
the Social Security Act (42 U.S.C. 1395rr(h)(2)) is 
amended— 
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(1) in subparagraph (A)— 
(A) in clause (ii), by striking ‘‘and’’ at the 
end; 
(B) by redesignating clause (iii) as clause 
(iv); and 
(C) by inserting after clause (ii) the fol-
lowing new clause: 
‘‘(iii) for 2016 and subsequent years, 
measures 
described 
in 
subparagraph 
(E)(i); and’’; 
(2) 
in 
subparagraph 
(B)(i), 
by 
striking 
‘‘(A)(iii)’’ and inserting ‘‘(A)(iv)’’; and 
(3) by adding at the end the following new sub-
paragraph: 
‘‘(E) MEASURES SPECIFIC TO THE CONDI-
TIONS TREATED WITH ORAL-ONLY DRUGS.— 
‘‘(i) IN GENERAL.—The measures de-
scribed in this subparagraph are measures 
specified by the Secretary that are specific 
to the conditions treated with oral-only 
drugs. To the extent feasible, such meas-
ures shall be outcomes-based measures. 
‘‘(ii) CONSULTATION.—In specifying 
the measures under clause (i), the Sec-
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retary shall consult with interested stake-
holders. 
‘‘(iii) USE
OF
ENDORSED
MEAS-
URES.— 
‘‘(I) IN
GENERAL.—Subject to 
subclause (I), any measures specified 
under clause (i) must have been en-
dorsed by the entity with a contract 
under section 1890(a). 
‘‘(II) EXCEPTION.—If the entity 
with a contract under section 1890(a) 
has not endorsed a measure for a 
specified area or topic related to 
measures described in clause (i) that 
the Secretary determines appropriate, 
the Secretary may specify a measure 
that is endorsed or adopted by a con-
sensus organization recognized by the 
Secretary that has expertise in clinical 
guidelines for kidney disease.’’. 
(e) AUDITS OF COST REPORTS OF ESRD PROVIDERS 
AS RECOMMENDED BY MEDPAC.— 
(1) IN GENERAL.—The Secretary of Health and 
Human Services shall conduct audits of Medicare 
cost reports beginning during 2012 for a representa-
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tive sample of providers of services and renal dialysis 
facilities furnishing renal dialysis services. 
(2) FUNDING.—For purposes of carrying out 
paragraph (1), the Secretary of Health and Human 
Services shall provide for the transfer from the Fed-
eral 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 $18,000,000 for fiscal year 2014. Amounts trans-
ferred under this paragraph for a fiscal year shall be 
available until expended. 
SEC. 218. QUALITY INCENTIVES FOR COMPUTED TOMOG-
RAPHY 
DIAGNOSTIC 
IMAGING 
AND 
PRO-
MOTING EVIDENCE-BASED CARE. 
(a) QUALITY INCENTIVES TO PROMOTE PATIENT 
SAFETY AND PUBLIC HEALTH IN COMPUTED TOMOG-
RAPHY DIAGNOSTIC IMAGING.— 
(1) IN GENERAL.—Section 1834 of the Social 
Security Act (42 U.S.C. 1395m) is amended by add-
ing at the end the following new subsection: 
‘‘(p) QUALITY INCENTIVES TO PROMOTE PATIENT 
SAFETY AND PUBLIC HEALTH IN COMPUTED TOMOG-
RAPHY.— 
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‘‘(1) QUALITY INCENTIVES.—In the case of an 
applicable computed tomography service (as defined 
in paragraph (2)) for which payment is made under 
an applicable payment system (as defined in para-
graph (3)) and that is furnished on or after January 
1, 2016, using equipment that is not consistent with 
the CT equipment standard (described in paragraph 
(4)), the payment amount for such service shall be 
reduced by the applicable percentage (as defined in 
paragraph (5)). 
‘‘(2) APPLICABLE
COMPUTED
TOMOGRAPHY 
SERVICES DEFINED.—In this subsection, the term 
‘applicable computed tomography service’ means a 
service billed using diagnostic radiological imaging 
codes for computed tomography (identified as of 
January 1, 2014, by HCPCS codes 70450–70498, 
71250–71275, 72125–72133, 72191–72194, 73200– 
73206, 73700–73706, 74150–74178, 74261–74263, 
and 75571–75574 (and any succeeding codes). 
‘‘(3) 
APPLICABLE
PAYMENT
SYSTEM
DE-
FINED.—In this subsection, the term ‘applicable 
payment system’ means the following: 
‘‘(A) The technical component and the 
technical component of the global fee under the 
fee schedule established under section 1848(b). 
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‘‘(B) The prospective payment system for 
hospital outpatient department services under 
section 1833(t). 
‘‘(4) 
CONSISTENCY
WITH
CT
EQUIPMENT 
STANDARD.—In this subsection, the term ‘not con-
sistent with the CT equipment standard’ means, 
with respect to an applicable computed tomography 
service, that the service was furnished using equip-
ment that does not meet each of the attributes of 
the National Electrical Manufacturers Association 
(NEMA) Standard XR–29–2013, entitled ‘Standard 
Attributes on CT Equipment Related to Dose Opti-
mization and Management’. Through rulemaking, 
the Secretary may apply successor standards. 
‘‘(5) APPLICABLE PERCENTAGE DEFINED.—In 
this subsection, the term ‘applicable percentage’ 
means— 
‘‘(A) for 2016, 5 percent; and 
‘‘(B) for 2017 and subsequent years, 15 
percent. 
‘‘(6) IMPLEMENTATION.— 
‘‘(A) INFORMATION.—The Secretary shall 
require that information be provided and at-
tested to by a supplier and a hospital outpatient 
department that indicates whether an applicable 
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computed tomography service was furnished 
that was not consistent with the CT equipment 
standard (described in paragraph (4)). Such in-
formation may be included on a claim and may 
be a modifier. Such information shall be 
verified, as appropriate, as part of the periodic 
accreditation of suppliers under section 1834(e) 
and hospitals under section 1865(a). 
‘‘(B) ADMINISTRATION.—Chapter 35 of 
title 44, United States Code, shall not apply to 
information described in subparagraph (A).’’. 
(2) CONFORMING AMENDMENTS.— 
(A) PROSPECTIVE PAYMENT SYSTEM FOR 
HOSPITAL
OUTPATIENT
DEPARTMENT
SERV-
ICES.—Section 1833(t) of the Social Security 
Act (42 1395l(t)) is amended by adding at the 
end the following new paragraph: 
‘‘(20) NOT BUDGET NEUTRAL APPLICATION OF 
REDUCED EXPENDITURES RESULTING FROM QUAL-
ITY
INCENTIVES
FOR
COMPUTED
TOMOGRAPHY.— 
The Secretary shall not take into account the re-
duced expenditures that result from the application 
of section 1834(p) in making any budget neutrality 
adjustments this subsection.’’. 
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(B) PHYSICIAN FEE SCHEDULE.—Section 
1848(c)(2)(B)(v) of the Social Security Act (42 
U.S.C. 1395w–4(c)(2)(B)(v)) is amended by 
adding at the end the following new subclause: 
‘‘(VIII) 
REDUCED
EXPENDI-
TURES
ATTRIBUTABLE
TO
APPLICA-
TION
OF
QUALITY
INCENTIVES
FOR 
COMPUTED
TOMOGRAPHY.—Effective 
for fee schedules established beginning 
with 2016, reduced expenditures at-
tributable to the application of the 
quality incentives for computed to-
mography under section 1834(p)’’. 
(b) PROMOTING EVIDENCE-BASED CARE.— 
(1) IN GENERAL.—Section 1834 of the Social 
Security Act (42 U.S.C. 1395m), as amended by 
subsection (a), is amended by adding at the end the 
following new subsection: 
‘‘(q) RECOGNIZING APPROPRIATE USE CRITERIA FOR 
CERTAIN IMAGING SERVICES.— 
‘‘(1) PROGRAM ESTABLISHED.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
establish a program to promote the use of ap-
propriate use criteria (as defined in subpara-
graph (B)) for applicable imaging services (as 
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defined in subparagraph (C)) furnished in an 
applicable setting (as defined in subparagraph 
(D)) by ordering professionals and furnishing 
professionals (as defined in subparagraphs (E) 
and (F), respectively). 
‘‘(B) APPROPRIATE
USE
CRITERIA
DE-
FINED.—In this subsection, the term ‘appro-
priate use criteria’ means criteria, only devel-
oped or endorsed by national professional med-
ical specialty societies or other provider-led enti-
ties, to assist ordering professionals and fur-
nishing professionals in making the most appro-
priate treatment decision for a specific clinical 
condition for an individual. To the extent fea-
sible, such criteria shall be evidence-based. 
‘‘(C) APPLICABLE IMAGING SERVICE DE-
FINED.—In this subsection, the term ‘applicable 
imaging service’ means an advanced diagnostic 
imaging service (as defined in subsection 
(e)(1)(B)) for which the Secretary determines— 
‘‘(i) one or more applicable appro-
priate use criteria specified under para-
graph (2) apply; 
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‘‘(ii) there are one or more qualified 
clinical decision support mechanisms listed 
under paragraph (3)(C); and 
‘‘(iii) one or more of such mechanisms 
is available free of charge. 
‘‘(D) APPLICABLE SETTING DEFINED.—In 
this subsection, the term ‘applicable setting’ 
means a physician’s office, a hospital outpatient 
department (including an emergency depart-
ment), an ambulatory surgical center, and any 
other provider-led outpatient setting determined 
appropriate by the Secretary. 
‘‘(E) 
ORDERING
PROFESSIONAL
DE-
FINED.—In this subsection, the term ‘ordering 
professional’ means a physician (as defined in 
section 1861(r)) or a practitioner described in 
section 1842(b)(18)(C) who orders an applica-
ble imaging service. 
‘‘(F) FURNISHING
PROFESSIONAL
DE-
FINED.—In this subsection, the term ‘fur-
nishing professional’ means a physician (as de-
fined in section 1861(r)) or a practitioner de-
scribed in section 1842(b)(18)(C) who furnishes 
an applicable imaging service. 
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‘‘(2) ESTABLISHMENT OF APPLICABLE APPRO-
PRIATE USE CRITERIA.— 
‘‘(A) IN
GENERAL.—Not later than No-
vember 15, 2015, the Secretary shall through 
rulemaking, and in consultation with physi-
cians, practitioners, and other stakeholders, 
specify applicable appropriate use criteria for 
applicable imaging services only from among 
appropriate use criteria developed or endorsed 
by national professional medical specialty soci-
eties or other provider-led entities. 
‘‘(B) CONSIDERATIONS.—In specifying ap-
plicable appropriate use criteria under subpara-
graph (A), the Secretary shall take into account 
whether the criteria— 
‘‘(i) have stakeholder consensus; 
‘‘(ii) are scientifically valid and evi-
dence based; and 
‘‘(iii) are based on studies that are 
published and reviewable by stakeholders. 
‘‘(C) REVISIONS.—The Secretary shall re-
view, on an annual basis, the specified applica-
ble appropriate use criteria to determine if 
there is a need to update or revise (as appro-
priate) such specification of applicable appro-
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priate use criteria and make such updates or 
revisions through rulemaking. 
‘‘(D) TREATMENT OF MULTIPLE APPLICA-
BLE APPROPRIATE USE CRITERIA.—In the case 
where the Secretary determines that more than 
one appropriate use criterion applies with re-
spect to an applicable imaging service, the Sec-
retary shall apply one or more applicable appro-
priate use criteria under this paragraph for the 
service. 
‘‘(3) MECHANISMS
FOR
CONSULTATION
WITH 
APPLICABLE APPROPRIATE USE CRITERIA.— 
‘‘(A) IDENTIFICATION OF MECHANISMS TO 
CONSULT WITH APPLICABLE APPROPRIATE USE 
CRITERIA.— 
‘‘(i) IN
GENERAL.—The Secretary 
shall specify qualified clinical decision sup-
port mechanisms that could be used by or-
dering professionals to consult with appli-
cable appropriate use criteria for applicable 
imaging services. 
‘‘(ii) CONSULTATION.—The Secretary 
shall consult with physicians, practitioners, 
health care technology experts, and other 
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stakeholders in specifying mechanisms 
under this paragraph. 
‘‘(iii) INCLUSION OF CERTAIN MECHA-
NISMS.—Mechanisms specified under this 
paragraph may include any or all of the 
following that meet the requirements de-
scribed in subparagraph (B)(ii): 
‘‘(I) Use of clinical decision sup-
port modules in certified EHR tech-
nology 
(as 
defined 
in 
section 
1848(o)(4)). 
‘‘(II) Use of private sector clin-
ical decision support mechanisms that 
are independent from certified EHR 
technology, which may include use of 
clinical decision support mechanisms 
available from medical specialty orga-
nizations. 
‘‘(III) Use of a clinical decision 
support mechanism established by the 
Secretary. 
‘‘(B) QUALIFIED CLINICAL DECISION SUP-
PORT MECHANISMS.— 
‘‘(i) IN
GENERAL.—For purposes of 
this subsection, a qualified clinical decision 
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support mechanism is a mechanism that 
the Secretary determines meets the re-
quirements described in clause (ii). 
‘‘(ii) REQUIREMENTS.—The require-
ments described in this clause are the fol-
lowing: 
‘‘(I) The mechanism makes avail-
able to the ordering professional appli-
cable appropriate use criteria specified 
under paragraph (2) and the sup-
porting documentation for the applica-
ble imaging service ordered. 
‘‘(II) In the case where there is 
more than one applicable appropriate 
use criterion specified under such 
paragraph for an applicable imaging 
service, the mechanism indicates the 
criteria that it uses for the service. 
‘‘(III) The mechanism determines 
the extent to which an applicable im-
aging service ordered is consistent 
with the applicable appropriate use 
criteria so specified. 
‘‘(IV) The mechanism generates 
and provides to the ordering profes-
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sional a certification or documentation 
that documents that the qualified clin-
ical decision support mechanism was 
consulted by the ordering professional. 
‘‘(V) The mechanism is updated 
on a timely basis to reflect revisions 
to the specification of applicable ap-
propriate use criteria under such 
paragraph. 
‘‘(VI) The mechanism meets pri-
vacy and security standards under ap-
plicable provisions of law. 
‘‘(VII) The mechanism performs 
such other functions as specified by 
the Secretary, which may include a re-
quirement to provide aggregate feed-
back to the ordering professional. 
‘‘(C) LIST
OF
MECHANISMS
FOR
CON-
SULTATION
WITH
APPLICABLE
APPROPRIATE 
USE CRITERIA.— 
‘‘(i) INITIAL
LIST.—Not later than 
April 1, 2016, the Secretary shall publish 
a list of mechanisms specified under this 
paragraph. 
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‘‘(ii) PERIODIC UPDATING OF LIST.— 
The Secretary shall identify on an annual 
basis the list of qualified clinical decision 
support mechanisms specified under this 
paragraph. 
‘‘(4) CONSULTATION WITH APPLICABLE APPRO-
PRIATE USE CRITERIA.— 
‘‘(A) CONSULTATION BY ORDERING PRO-
FESSIONAL.—Beginning with January 1, 2017, 
subject to subparagraph (C), with respect to an 
applicable imaging service ordered by an order-
ing professional that would be furnished in an 
applicable setting and paid for under an appli-
cable payment system (as defined in subpara-
graph (D)), an ordering professional shall— 
‘‘(i) consult with a qualified decision 
support mechanism listed under paragraph 
(3)(C); and 
‘‘(ii) provide to the furnishing profes-
sional the information described in clauses 
(i) through (iii) of subparagraph (B). 
‘‘(B) REPORTING BY FURNISHING PROFES-
SIONAL.—Beginning with January 1, 2017, 
subject to subparagraph (C), with respect to an 
applicable imaging service furnished in an ap-
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plicable setting and paid for under an applica-
ble payment system (as defined in subpara-
graph (D)), payment for such service may only 
be made if the claim for the service includes the 
following: 
‘‘(i) Information about which qualified 
clinical decision support mechanism was 
consulted by the ordering professional for 
the service. 
‘‘(ii) Information regarding— 
‘‘(I) whether the service ordered 
would adhere to the applicable appro-
priate use criteria specified under 
paragraph (2); 
‘‘(II) whether the service ordered 
would not adhere to such criteria; or 
‘‘(III) whether such criteria was 
not applicable to the service ordered. 
‘‘(iii) The national provider identifier 
of the ordering professional (if different 
from the furnishing professional). 
‘‘(C) EXCEPTIONS.—The provisions of sub-
paragraphs (A) and (B) and paragraph (6)(A) 
shall not apply to the following: 
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‘‘(i) EMERGENCY SERVICES.—An ap-
plicable imaging service ordered for an in-
dividual with an emergency medical condi-
tion (as defined in section 1867(e)(1)). 
‘‘(ii) INPATIENT SERVICES.—An appli-
cable imaging service ordered for an inpa-
tient and for which payment is made under 
part A. 
‘‘(iii) SIGNIFICANT
HARDSHIP.—An 
applicable imaging service ordered by an 
ordering professional who the Secretary 
may, on a case-by-case basis, exempt from 
the application of such provisions if the 
Secretary determines, subject to annual re-
newal, that consultation with applicable ap-
propriate use criteria would result in a sig-
nificant hardship, such as in the case of a 
professional who practices in a rural area 
without sufficient Internet access. 
‘‘(D) APPLICABLE PAYMENT SYSTEM DE-
FINED.—In this subsection, the term ‘applicable 
payment system’ means the following: 
‘‘(i) The physician fee schedule estab-
lished under section 1848(b). 
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‘‘(ii) The prospective payment system 
for hospital outpatient department services 
under section 1833(t). 
‘‘(iii) The ambulatory surgical center 
payment systems under section 1833(i). 
‘‘(5) IDENTIFICATION OF OUTLIER ORDERING 
PROFESSIONALS.— 
‘‘(A) IN GENERAL.—With respect to appli-
cable imaging services furnished beginning with 
2017, the Secretary shall determine, on an an-
nual basis, no more than five percent of the 
total number of ordering professionals who are 
outlier ordering professionals. 
‘‘(B) 
OUTLIER
ORDERING
PROFES-
SIONALS.—The determination of an outlier or-
dering professional shall— 
‘‘(i) be based on low adherence to ap-
plicable appropriate use criteria specified 
under paragraph (2), which may be based 
on comparison to other ordering profes-
sionals; and 
‘‘(ii) include data for ordering profes-
sionals for whom prior authorization under 
paragraph (6)(A) applies. 
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‘‘(C) USE OF TWO YEARS OF DATA.—The 
Secretary shall use two years of data to identify 
outlier ordering professionals under this para-
graph. 
‘‘(D) PROCESS.—The Secretary shall es-
tablish a process for determining when an 
outlier ordering professional is no longer an 
outlier ordering professional. 
‘‘(E) 
CONSULTATION
WITH
STAKE-
HOLDERS.—The Secretary shall consult with 
physicians, practitioners and other stakeholders 
in developing methods to identify outlier order-
ing professionals under this paragraph. 
‘‘(6) PRIOR
AUTHORIZATION
FOR
ORDERING 
PROFESSIONALS WHO ARE OUTLIERS.— 
‘‘(A) IN GENERAL.—Beginning January 1, 
2020, subject to paragraph (4)(C), with respect 
to services furnished during a year, the Sec-
retary shall, for a period determined appro-
priate by the Secretary, apply prior authoriza-
tion for applicable imaging services that are or-
dered by an outlier ordering professional identi-
fied under paragraph (5). 
‘‘(B) APPROPRIATE
USE
CRITERIA
IN 
PRIOR AUTHORIZATION.—In applying prior au-
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thorization under subparagraph (A), the Sec-
retary shall utilize only the applicable appro-
priate use criteria specified under this sub-
section. 
‘‘(C) FUNDING.—For purposes of carrying 
out this paragraph, the Secretary shall provide 
for the transfer, from the Federal Supple-
mentary Medical Insurance Trust Fund under 
section 1841, of $5,000,000 to the Centers for 
Medicare & Medicaid Services Program Man-
agement Account for each of fiscal years 2019 
through 2021. Amounts transferred under the 
preceding sentence shall remain available until 
expended. 
‘‘(7) CONSTRUCTION.—Nothing in this sub-
section shall be construed as granting the Secretary 
the authority to develop or initiate the development 
of clinical practice guidelines or appropriate use cri-
teria.’’. 
(2) 
CONFORMING
AMENDMENT.—Section 
1833(t)(16) of the Social Security Act (42 U.S.C. 
1395l(t)(16)) is amended by adding at the end the 
following new subparagraph: 
‘‘(E) APPLICATION OF APPROPRIATE USE 
CRITERIA FOR CERTAIN IMAGING SERVICES.— 
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For provisions relating to the application of ap-
propriate use criteria for certain imaging serv-
ices, see section 1834(q).’’. 
(3) REPORT ON EXPERIENCE OF IMAGING AP-
PROPRIATE
USE
CRITERIA
PROGRAM.—Not later 
than 18 months after the date of the enactment of 
this Act, the Comptroller General of the United 
States shall submit to Congress a report that in-
cludes a description of the extent to which appro-
priate use criteria could be used for other services 
under part B of title XVIII of the Social Security 
Act (42 U.S.C. 1395j et seq.), such as radiation 
therapy and clinical diagnostic laboratory services. 
SEC. 219. USING FUNDING FROM TRANSITIONAL FUND FOR 
SUSTAINABLE GROWTH RATE (SGR) REFORM. 
Section 1898(b)(1) of the Social Security Act (42 
U.S.C. 
1395iii(b)(1)) 
is 
amended 
by 
striking 
‘‘$2,300,000,000’’ and inserting ‘‘$0’’. 
SEC. 220. ENSURING ACCURATE VALUATION OF SERVICES 
UNDER THE PHYSICIAN FEE SCHEDULE. 
(a) AUTHORITY TO COLLECT AND USE INFORMA-
TION ON PHYSICIANS’ SERVICES IN THE DETERMINATION 
OF RELATIVE VALUES.— 
(1) IN
GENERAL.—Section 1848(c)(2) of the 
Social Security Act (42 U.S.C. 1395w–4(c)(2)) is 
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amended by adding at the end the following new 
subparagraph: 
‘‘(M) AUTHORITY TO COLLECT AND USE 
INFORMATION
ON
PHYSICIANS’ SERVICES
IN 
THE DETERMINATION OF RELATIVE VALUES.— 
‘‘(i) COLLECTION OF INFORMATION.— 
Notwithstanding any other provision of 
law, the Secretary may collect or obtain in-
formation on the resources directly or indi-
rectly related to furnishing services for 
which payment is made under the fee 
schedule established under subsection (b). 
Such information may be collected or ob-
tained from any eligible professional or any 
other source. 
‘‘(ii) USE
OF
INFORMATION.—Not-
withstanding any other provision of law, 
subject to clause (v), the Secretary may 
(as the Secretary determines appropriate) 
use information collected or obtained pur-
suant to clause (i) in the determination of 
relative values for services under this sec-
tion. 
‘‘(iii) TYPES OF INFORMATION.—The 
types of information described in clauses 
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(i) and (ii) may, at the Secretary’s discre-
tion, include any or all of the following: 
‘‘(I) Time involved in furnishing 
services. 
‘‘(II) Amounts and types of prac-
tice expense inputs involved with fur-
nishing services. 
‘‘(III) Prices (net of any dis-
counts) for practice expense inputs, 
which may include paid invoice prices 
or other documentation or records. 
‘‘(IV) Overhead and accounting 
information for practices of physicians 
and other suppliers. 
‘‘(V) Any other element that 
would improve the valuation of serv-
ices under this section. 
‘‘(iv) 
INFORMATION
COLLECTION 
MECHANISMS.—Information may be col-
lected or obtained pursuant to this sub-
paragraph from any or all of the following: 
‘‘(I) Surveys of physicians, other 
suppliers, providers of services, manu-
facturers, and vendors. 
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‘‘(II) Surgical logs, billing sys-
tems, or other practice or facility 
records. 
‘‘(III) Electronic health records. 
‘‘(IV) Any other mechanism de-
termined appropriate by the Sec-
retary. 
‘‘(v) TRANSPARENCY OF USE OF IN-
FORMATION.— 
‘‘(I) IN
GENERAL.—Subject to 
subclauses (II) and (III), if the Sec-
retary uses information collected or 
obtained under this subparagraph in 
the determination of relative values 
under this subsection, the Secretary 
shall disclose the information source 
and discuss the use of such informa-
tion in such determination of relative 
values through notice and comment 
rulemaking. 
‘‘(II) THRESHOLDS FOR USE.— 
The Secretary may establish thresh-
olds in order to use such information, 
including the exclusion of information 
collected or obtained from eligible pro-
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fessionals who use very high resources 
(as determined by the Secretary) in 
furnishing a service. 
‘‘(III) DISCLOSURE OF INFORMA-
TION.—The Secretary shall make ag-
gregate information available under 
this subparagraph but shall not dis-
close information in a form or manner 
that identifies an eligible professional 
or a group practice, or information 
collected or obtained pursuant to a 
nondisclosure agreement. 
‘‘(vi) INCENTIVE TO PARTICIPATE.— 
The Secretary may provide for such pay-
ments under this part to an eligible profes-
sional that submits such solicited informa-
tion under this subparagraph as the Sec-
retary determines appropriate in order to 
compensate such eligible professional for 
such submission. Such payments shall be 
provided in a form and manner specified 
by the Secretary. 
‘‘(vii) ADMINISTRATION.—Chapter 35 
of title 44, United States Code, shall not 
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apply to information collected or obtained 
under this subparagraph. 
‘‘(viii) DEFINITION OF ELIGIBLE PRO-
FESSIONAL.—In this subparagraph, the 
term ‘eligible professional’ has the meaning 
given such term in subsection (k)(3)(B). 
‘‘(ix) FUNDING.—For purposes of car-
rying out this subparagraph, in addition to 
funds otherwise appropriated, the Sec-
retary shall provide for the transfer, from 
the Federal Supplementary Medical Insur-
ance Trust Fund under section 1841, of 
$2,000,000 to the Centers for Medicare & 
Medicaid Services Program Management 
Account for each fiscal year beginning with 
fiscal year 2014. Amounts transferred 
under the preceding sentence for a fiscal 
year shall be available until expended.’’. 
(2) 
LIMITATION
ON
REVIEW.—Section 
1848(i)(1) of the Social Security Act (42 U.S.C. 
1395w–4(i)(1)) is amended— 
(A) in subparagraph (D), by striking 
‘‘and’’ at the end; 
(B) in subparagraph (E), by striking the 
period at the end and inserting ‘‘, and’’; and 
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(C) by adding at the end the following new 
subparagraph: 
‘‘(F) the collection and use of information 
in the determination of relative values under 
subsection (c)(2)(M).’’. 
(b) AUTHORITY FOR ALTERNATIVE APPROACHES TO 
ESTABLISHING
PRACTICE
EXPENSE
RELATIVE
VAL-
UES.—Section 1848(c)(2) of the Social Security Act (42 
U.S.C. 1395w–4(c)(2)), as amended by subsection (a), is 
amended by adding at the end the following new subpara-
graph: 
‘‘(N) AUTHORITY FOR ALTERNATIVE AP-
PROACHES
TO
ESTABLISHING
PRACTICE
EX-
PENSE RELATIVE VALUES.—The Secretary may 
establish or adjust practice expense relative val-
ues under this subsection using cost, charge, or 
other data from suppliers or providers of serv-
ices, including information collected or obtained 
under subparagraph (M).’’. 
(c) REVISED AND EXPANDED IDENTIFICATION OF 
POTENTIALLY
MISVALUED
CODES.—Section 
1848(c)(2)(K)(ii) of the Social Security Act (42 U.S.C. 
1395w–4(c)(2)(K)(ii)) is amended to read as follows: 
‘‘(ii) 
IDENTIFICATION
OF
POTEN-
TIALLY MISVALUED CODES.—For purposes 
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of identifying potentially misvalued codes 
pursuant to clause (i)(I), the Secretary 
shall examine codes (and families of codes 
as appropriate) based on any or all of the 
following criteria: 
‘‘(I) Codes that have experienced 
the fastest growth. 
‘‘(II) Codes that have experi-
enced substantial changes in practice 
expenses. 
‘‘(III) Codes that describe new 
technologies or services within an ap-
propriate time period (such as 3 
years) after the relative values are ini-
tially established for such codes. 
‘‘(IV) Codes which are multiple 
codes that are frequently billed in con-
junction with furnishing a single serv-
ice. 
‘‘(V) Codes with low relative val-
ues, particularly those that are often 
billed multiple times for a single treat-
ment. 
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