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2008, and before January 1, 2010,’’ after ‘‘in 
such paragraph,’’; and 
(C) in clause (ii), by inserting ‘‘for services 
furnished on or after July 1, 2004, and before 
January 1, 2007,’’ after ‘‘in clause (i),’’; and 
(2) in subparagraph (B)— 
(A) in the heading, by striking ‘‘AFTER 
2006’’ and inserting ‘‘FOR SUBSEQUENT PERI-
ODS’’; 
(B) by inserting ‘‘clauses (i) and (ii) of’’ 
before ‘‘subparagraph (A)’’; and 
(C) by striking ‘‘in such subparagraph’’ 
and inserting ‘‘in the respective clause’’. 
SEC. 626. EXTENDING HOLD HARMLESS FOR SMALL RURAL 
HOSPITALS UNDER THE HOPD PROSPECTIVE 
PAYMENT SYSTEM. 
Section 1833(t)(7)(D)(i)(II) of the Social Security 
Act (42 U.S.C. 1395l(t)(7)(D)(I)(II)) is amended— 
(1) by striking ‘‘January 1, 2009’’ and insert-
ing ‘‘January 1, 2010’’; 
(2) by striking ‘‘2007, or 2008,’’; and 
(3) by striking ‘‘90 percent, and 85 percent, re-
spectively.’’ and inserting ‘‘and with respect to such 
services furnished after 2006 the applicable percent-
age shall be 90 percent.’’. 
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Subtitle C—End Stage Renal 
Disease Program 
SEC. 631. CHRONIC KIDNEY DISEASE DEMONSTRATION 
PROJECTS. 
(a) IN GENERAL.—The Secretary of Health and 
Human Services (in this section referred to as the ‘‘Sec-
retary’’), acting through the Director of the National In-
stitutes of Health, shall establish demonstration projects 
to— 
(1) increase public and medical community 
awareness (particularly of those who treat patients 
with diabetes and hypertension) about the factors 
that lead to chronic kidney disease, how to prevent 
it, how to diagnose it, and how to treat it; 
(2) increase screening and use of prevention 
techniques for chronic kidney disease for Medicare 
beneficiaries and the general public (particularly 
among patients with diabetes and hypertension, 
where prevention techniques are well established and 
early detection makes prevention possible); and 
(3) enhance surveillance systems and expand re-
search to better assess the prevalence and incidence 
of chronic kidney disease, (building on work done by 
Centers for Disease Control and Prevention). 
(b) SCOPE AND DURATION.— 
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(1) SCOPE.—The Secretary shall select at least 
3 States in which to conduct demonstration projects 
under this section. In selecting the States under this 
paragraph, the Secretary shall take into account the 
size of the population of individuals with end-stage 
renal disease who are enrolled in part B of title 
XVIII of the Social Security Act and ensure the par-
ticipation of individuals who reside in rural and 
urban areas. 
(2) DURATION.—The demonstration projects 
under this section shall be conducted for a period 
that is not longer than 5 years and shall begin on 
January 1, 2009. 
(c) EVALUATION AND REPORT.— 
(1) EVALUATION.—The Secretary shall conduct 
an evaluation of the demonstration projects con-
ducted under this section. 
(2) REPORT.—Not later than 12 months after 
the date on which the demonstration projects under 
this section are completed, the Secretary shall sub-
mit to Congress a report on the evaluation con-
ducted under paragraph (1) together with rec-
ommendations for such legislation and administra-
tive action as the Secretary determines appropriate. 
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SEC. 632. MEDICARE COVERAGE OF KIDNEY DISEASE PA-
TIENT EDUCATION SERVICES. 
(a) COVERAGE
OF KIDNEY DISEASE EDUCATION 
SERVICES.— 
(1) COVERAGE.—Section 1861(s)(2) of the So-
cial Security Act (42 U.S.C. 1395x(s)(2)), as 
amended by sections 201(a)(1), 607(a)(1), and 
607(b)(1), is amended— 
(A) in subparagraph (CC), by striking 
‘‘and’’ after the semicolon at the end; 
(B) in subparagraph (DD), by adding 
‘‘and’’ after the semicolon at the end; and 
(C) by adding at the end the following new 
subparagraph: 
‘‘(EE) kidney disease education services (as de-
fined in subsection (ggg));’’. 
(2) SERVICES
DESCRIBED.—Section 1861 of 
the Social Security Act (42 U.S.C. 1395x), as 
amended 
by 
sections 
201(a)(2), 
503(b)(1), 
607(a)(2), and 607(b)(2), is amended by adding at 
the end the following new subsection: 
‘‘Kidney Disease Education Services 
‘‘(ggg)(1) The term ‘kidney disease education serv-
ices’ means educational services that are— 
‘‘(A) furnished to an individual with stage IV 
chronic kidney disease who, according to accepted 
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clinical guidelines identified by the Secretary, will re-
quire dialysis or a kidney transplant; 
‘‘(B) furnished, upon the referral of the physi-
cian managing the individual’s kidney condition, by 
a qualified person (as defined in paragraph (2)); and 
‘‘(C) designed— 
‘‘(i) to provide comprehensive information 
(consistent with the standards developed under 
paragraph (3)) regarding— 
‘‘(I) the management of comorbidities, 
including for purposes of delaying the need 
for dialysis; 
‘‘(II) the prevention of uremic com-
plications; and 
‘‘(III) each option for renal replace-
ment therapy (including hemodialysis and 
peritoneal dialysis at home and in-center 
as well as vascular access options and 
transplantation); 
‘‘(ii) to ensure that the individual has the 
opportunity to actively participate in the choice 
of therapy; and 
‘‘(iii) to be tailored to meet the needs of 
the individual involved. 
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‘‘(2) The term ‘qualified person’ means a physician, 
physician assistant, nurse practitioner, or clinical nurse 
specialist who furnishes services for which payment may 
be made under the fee schedule established under section 
1848. Such term does not include a renal dialysis facility. 
‘‘(3) The Secretary shall set standards for the con-
tent of such information to be provided under paragraph 
(1)(C)(i) after consulting with physicians, other health 
professionals, health educators, professional organizations, 
accrediting organizations, kidney patient organizations, di-
alysis facilities, transplant centers, network organizations 
described in section 1881(c)(2), and other knowledgeable 
persons. To the extent possible the Secretary shall consult 
with a person or entity described in the previous sentence, 
other than a dialysis facility, that has not received indus-
try funding from a drug or biological manufacturer or di-
alysis facility. 
‘‘(4) In promulgating regulations to carry out this 
subsection, the Secretary shall ensure that each individual 
who is eligible for benefits for kidney disease education 
services under this title receives such services in a timely 
manner to maximize the benefit of those services. 
‘‘(5) The Secretary shall monitor the implementation 
of this subsection to ensure that individuals who are eligi-
ble for benefits for kidney disease education services re-
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ceive such services in the manner described in paragraph 
(4). 
‘‘(6) No individual shall be eligible to be provided 
more than 6 sessions of kidney disease education services 
under this title.’’. 
(3) PAYMENT
UNDER
THE
PHYSICIAN
FEE 
SCHEDULE.—Section 1848(j)(3) of the Social Secu-
rity Act (42 U.S.C. 1395w–4(j)(3)) is amended by 
inserting ‘‘(2)(DD),’’ after ‘‘(2)(AA),’’. 
(4) LIMITATION ON NUMBER OF SESSIONS.— 
Section 1862(a)(1) of the Social Security Act (42 
U.S.C. 1395y(a)(1)) is amended— 
(A) in subparagraph (M), by striking 
‘‘and’’ at the end; 
(B) in subparagraph (N), by striking the 
semicolon at the end and inserting ‘‘, and’’; and 
(C) by adding at the end the following new 
subparagraph: 
‘‘(O) in the case of kidney disease education 
services (as defined in section 1861(ggg)), which are 
furnished in excess of the number of sessions cov-
ered under such section;’’. 
(5) GAO REPORT.—Not later than September 
1, 2010, the Comptroller General of the United 
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States shall submit to Congress a report on the fol-
lowing: 
(A) The number of Medicare beneficiaries 
who are eligible to receive benefits for kidney 
disease education services (as defined in section 
1861(ggg) of the Social Security Act, as added 
by paragraph (2)) under title XVIII of such Act 
and who receive such services. 
(B) The extent to which there is a suffi-
cient amount of physicians, physician assist-
ants, nurse practitioners, and clinical nurse spe-
cialists to furnish kidney disease education serv-
ices (as so defined) under such title and wheth-
er or not renal dialysis facilities (and appro-
priate employees of such facilities) should be in-
cluded as an entity eligible under such section 
to furnish such services. 
(C) Recommendations, if appropriate, for 
renal dialysis facilities (and appropriate employ-
ees of such facilities) to structure kidney dis-
ease education services (as so defined) in a 
manner that is objective and unbiased and that 
provides a range of options and alternative loca-
tions for renal replacement therapy and man-
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agement of co-morbidities that may delay the 
need for dialysis. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to services furnished on or after 
January 1, 2009. 
SEC. 633. REQUIRED TRAINING FOR PATIENT CARE DIALY-
SIS TECHNICIANS. 
Section 1881 of the Social Security Act (42 U.S.C. 
1395rr) is amended by adding the following new sub-
section: 
‘‘(h)(1) Except as provided in paragraph (2), a pro-
vider of services or a renal dialysis facility may not use, 
for more than 12 months during 2009, or for any period 
beginning on January 1, 2010, any individual as a patient 
care dialysis technician unless the individual— 
‘‘(A) has completed a training program in the 
care and treatment of an individual with chronic 
kidney failure who is undergoing dialysis treatment; 
and 
‘‘(B) has been certified by a nationally recog-
nized certification entity for dialysis technicians. 
‘‘(2)(A) A provider of services or a renal dialysis facil-
ity may permit an individual enrolled in a training pro-
gram described in paragraph (1)(A) to serve as a patient 
care dialysis technician while they are so enrolled. 
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‘‘(B) The requirements described in subparagraphs 
(A), (B), and (C) of paragraph (1) do not apply to an 
individual who has performed dialysis-related services for 
at least 5 years. 
‘‘(3) For purposes of paragraph (1), if, since the most 
recent completion by an individual of a training program 
described in paragraph (1)(A), there has been a period 
of 24 consecutive months during which the individual has 
not furnished dialysis-related services for monetary com-
pensation, such individual shall be required to complete 
a new training program or become recertified as described 
in paragraph (1)(B). 
‘‘(4) A provider of services or a renal dialysis facility 
shall provide such regular performance review and regular 
in-service education as assures that individuals serving as 
patient care dialysis technicians for the provider or facility 
are competent to perform dialysis-related services.’’. 
SEC. 634. MEDPAC REPORT ON TREATMENT MODALITIES 
FOR PATIENTS WITH KIDNEY FAILURE. 
(a) EVALUATION.— 
(1) IN
GENERAL.—Not later than March 1, 
2009, the Medicare Payment Advisory Commission 
(established under section 1805 of the Social Secu-
rity Act) shall submit to the Secretary and Congress 
a report evaluating the barriers that exist to increas-
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ing the number of individuals with end-stage renal 
disease who elect to receive home dialysis services 
under the Medicare program under title XVIII of 
the Social Security Act (42 U.S.C. 1395 et seq.). 
(2) REPORT DETAILS.—The report shall include 
the following: 
(A) A review of Medicare home dialysis 
demonstration projects initiated before the date 
of the enactment of this Act, and the results of 
such demonstration projects and recommenda-
tions for future Medicare home dialysis dem-
onstration 
projects 
or 
Medicare 
program 
changes that will test models that can improve 
Medicare beneficiary access to home dialysis. 
(B) A comparison of current Medicare 
home dialysis costs and payments with current 
in-center and hospital dialysis costs and pay-
ments. 
(C) An analysis of the adequacy of Medi-
care reimbursement for patient training for 
home dialysis (including hemodialysis and peri-
toneal dialysis) and recommendations for ensur-
ing appropriate payment for such home dialysis 
training. 
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(D) A catalogue and evaluation of the in-
centives and disincentives in the current reim-
bursement system that influence whether pa-
tients receive home dialysis services or other 
treatment modalities. 
(E) An evaluation of patient education 
services and how such services impact the treat-
ment choices made by patients. 
(F) Recommendations for implementing in-
centives to encourage patients to elect to receive 
home dialysis services or other treatment mo-
dalities under the Medicare program. 
(3) SCOPE OF REVIEW.—In preparing the re-
port under paragraph (1), the Medicare Payment 
Advisory Commission shall consider a variety of per-
spectives, including the perspectives of physicians, 
other health care professionals, hospitals, dialysis fa-
cilities, health plans, purchasers, and patients. 
SEC. 635. ADJUSTMENT FOR ERYTHROPOIETIN STIMU-
LATING AGENTS (ESAS). 
(a) IN GENERAL.—Subsection (b)(13) of section 
1881 of the Social Security Act (42 U.S.C. 1395rr) is 
amended— 
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(1) in subparagraph (A)(iii), by striking ‘‘For 
such drugs’’ and inserting ‘‘Subject to subparagraph 
(C), for such drugs’’; and 
(2) by adding at the end the following new sub-
paragraph: 
‘‘(C)(i) The payment amounts under this title for 
erythropoietin furnished during 2008 or 2009 to an indi-
vidual with end stage renal disease by a large dialysis fa-
cility (as defined in subparagraph (D)) (whether to indi-
viduals in the facility or at home), in an amount equal 
to $8.75 per thousand units (rounded to the nearest 100 
units) or, if less, 102 percent of the average sales price 
(as determined under section 1847A) for such drug or bio-
logical. 
‘‘(ii) The payment amounts under this title for 
darbepoetin alfa furnished during 2008 or 2009 to an in-
dividual with end stage renal disease by a large dialysis 
facility (as defined in clause (iii)) (whether to individuals 
in the facility or at home), in an amount equal to $2.92 
per microgram or, if less, 102 percent of the average sales 
price (as determined under section 1847A) for such drug 
or biological. 
‘‘(iii) For purposes of this subparagraph, the term 
‘large dialysis facility’ means a provider of services or 
renal dialysis facility that is owned or managed by a cor-
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porate entity that, as of July 24, 2007, owns or manages 
300 or more such providers or facilities, and includes a 
successor to such a corporate entity.’’. 
(b) NO IMPACT ON DRUG ADD-ON PAYMENT.—Noth-
ing in the amendments made by subsection (a) shall be 
construed to affect the amount of any payment adjust-
ment made under section 1881(b)(12)(B)(ii) of the Social 
Security Act (42 U.S.C. 1395rr(b)(12)(B)(ii)). 
SEC. 636. SITE NEUTRAL COMPOSITE RATE. 
Subsection (b)(12)(A) of section 1881 of the Social 
Security Act (42 U.S.C. 1395rr) is amended by adding 
at the end the following new sentence: ‘‘Under such sys-
tem the payment rate for dialysis services furnished on 
or after January 1, 2008, by providers of such services 
for hospital-based facilities shall be the same as the pay-
ment rate (computed without regard to this sentence) for 
such services furnished by renal dialysis facilities that are 
not hospital-based, except that in applying the geographic 
index under subparagraph (D) to hospital-based facilities, 
the labor share shall be based on the labor share otherwise 
applied for such facilities.’’. 
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SEC. 637. DEVELOPMENT OF ESRD BUNDLING SYSTEM AND 
QUALITY INCENTIVE PAYMENTS. 
(a) DEVELOPMENT OF ESRD BUNDLING SYSTEM.— 
Subsection (b) of section 1881 of the Social Security Act 
(42 U.S.C. 1395rr) is further amended— 
(1) in paragraph (12)(A), by striking ‘‘In lieu 
of payment’’ and inserting ‘‘Subject to paragraph 
(14), in lieu of payment’’; 
(2) in the second sentence of paragraph 
(12)(F)— 
(A) by inserting ‘‘or paragraph (14)’’ after 
‘‘this paragraph’’; and 
(B) by inserting ‘‘or under the system 
under paragraph (14)’’ after ‘‘subparagraph 
(B)’’; 
(3) in paragraph (12)(H)— 
(A) by inserting ‘‘or paragraph (14)’’ after 
‘‘under this paragraph’’ the first place it ap-
pears; and 
(B) by inserting before the period at the 
end the following: ‘‘or, under paragraph (14), 
the identification of renal dialysis services in-
cluded in the bundled payment, the adjustment 
for outliers, the identification of facilities to 
which the phase-in may apply, and the deter-
mination of payment amounts under subpara-
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graph (A) under such paragraph, and the appli-
cation of paragraph (13)(C)(iii)’’; 
(4) in paragraph (13)— 
(A) in subparagraph (A), by striking ‘‘The 
payment amounts’’ and inserting ‘‘subject to 
paragraph (14), the payment amounts’’; and 
(B) in subparagraph (B)— 
(i) in clause (i), by striking ‘‘(i)’’ after 
‘‘(B)’’ and by inserting ‘‘, subject to para-
graph (14)’’ before the period at the end; 
and 
(ii) by striking clause (ii); and 
(5) by adding at the end the following new 
paragraph: 
‘‘(14)(A) Subject to subparagraph (E), for services 
furnished on or after January 1, 2010, the Secretary shall 
implement a payment system under which a single pay-
ment is made under this title for renal dialysis services 
(as defined in subparagraph (B)) in lieu of any other pay-
ment (including a payment adjustment under paragraph 
(12)(B)(ii)) for such services and items furnished pursu-
ant to paragraph (4). In implementing the system the Sec-
retary shall ensure that the estimated total amount of pay-
ments under this title for 2010 for renal dialysis services 
shall equal 96 percent of the estimated amount of pay-
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ments for such services, including payments under para-
graph (12)(B)(ii), that would have been made if such sys-
tem had not been implemented. 
‘‘(B) For purposes of this paragraph, the term ‘renal 
dialysis services’ includes— 
‘‘(i) items and services included in the 
composite rate for renal dialysis services as of 
December 31, 2009; 
‘‘(ii) erythropoietin stimulating agents fur-
nished to individuals with end stage renal dis-
ease; 
‘‘(iii) other drugs and biologicals and diag-
nostic laboratory tests, that the Secretary iden-
tifies as commonly used in the treatment of 
such patients and for which payment was (be-
fore the application of this paragraph) made 
separately under this title, and any oral equiva-
lent form of such drugs and biologicals or of 
drugs and biologicals described in clause (ii); 
and 
‘‘(iv) home dialysis training for which pay-
ment was (before the application of this para-
graph) made separately under this section. 
Such term does not include vaccines. 
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‘‘(C) The system under this paragraph may provide 
for payment on the basis of services furnished during a 
week or month or such other appropriate unit of payment 
as the Secretary specifies. 
‘‘(D) Such system— 
‘‘(i) shall include a payment adjustment based 
on case mix that may take into account patient 
weight, body mass index, comorbidities, length of 
time on dialysis, age, race, ethnicity, and other ap-
propriate factors; 
‘‘(ii) shall include a payment adjustment for 
high cost outliers due to unusual variations in the 
type or amount of medically necessary care, includ-
ing variations in the amount of erythropoietin stimu-
lating agents necessary for anemia management; and 
‘‘(iii) may include such other payment adjust-
ments as the Secretary determines appropriate, such 
as a payment adjustment— 
‘‘(I) by a geographic index, such as the 
index referred to in paragraph (12)(D), as the 
Secretary determines to be appropriate; 
‘‘(II) for pediatric providers of services and 
renal dialysis facilities; 
‘‘(III) for low volume providers of services 
and renal dialysis facilities; 
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‘‘(IV) for providers of services or renal di-
alysis facilities located in rural areas; and 
‘‘(V) for providers of services or renal di-
alysis facilities that are not large dialysis facili-
ties. 
‘‘(E) The Secretary may provide for a phase-in of the 
payment system described in subparagraph (A) for serv-
ices furnished by a provider of services or renal dialysis 
facility described in any of subclauses (II) through (V) of 
subparagraph (D)(iii), but such payment system shall be 
fully implemented for services furnished in the case of any 
such provider or facility on or after January 1, 2013. 
‘‘(F) The Secretary shall apply the annual increase 
that would otherwise apply under subparagraph (F) of 
paragraph (12) to payment amounts established under 
such paragraph (if this paragraph did not apply) in an 
appropriate manner under this paragraph.’’. 
(b) 
PROHIBITION
OF
UNBUNDLING.—Section 
1862(a) of such Act (42 U.S.C. 1395y(a)) is amended— 
(1) by striking ‘‘or’’ at the end of paragraph 
(21); 
(2) by striking the period at the end of para-
graph (22) and inserting ‘‘; or’’; and 
(3) by inserting after paragraph (22) the fol-
lowing new paragraph: 
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‘‘(23) where such expenses are for renal dialysis 
services (as defined in subparagraph (B) of section 
1881(b)(14)) for which payment is made under such 
section (other than under subparagraph (E) of such 
section) unless such payment is made under such 
section to a provider of services or a renal dialysis 
facility for such services.’’. 
(c) QUALITY INCENTIVE PAYMENTS.—Section 1881 
of such Act is amended by adding at the end the following 
new subsection: 
‘‘(i) QUALITY INCENTIVE PAYMENTS IN THE END- 
STAGE RENAL DISEASE PROGRAM.— 
‘‘(1) QUALITY
INCENTIVE
PAYMENTS
FOR 
SERVICES FURNISHED IN 2008, 2009, AND 2010.— 
‘‘(A) IN GENERAL.—With respect to renal 
dialysis services furnished during a performance 
period (as defined in subparagraph (B)) by a 
provider of services or renal dialysis facility that 
the Secretary determines meets the applicable 
performance standard for the period under sub-
paragraph (C) and reports on measures for 
2009 and 2010 under subparagraph (D) for 
such services, in addition to the amount other-
wise paid under this section, subject to sub-
paragraph (G), there also shall be paid to the 
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provider or facility an amount equal to the ap-
plicable percentage (specified in subparagraph 
(E) for the period) of the Secretary’s estimate 
(based on claims submitted not later than two 
months after the end of the performance pe-
riod) of the amount specified in subparagraph 
(F) for such period. 
‘‘(B) PERFORMANCE
PERIOD.—In this 
paragraph, the term ‘performance period’ 
means each of the following: 
‘‘(i) The period beginning on July 1, 
2008, and ending on December 31, 2008. 
‘‘(ii) 2009. 
‘‘(iii) 2010. 
‘‘(C) PERFORMANCE STANDARD.— 
‘‘(i) 2008.—For the performance pe-
riod occurring in 2008, the applicable per-
formance standards for a provider or facil-
ity under this subparagraph are— 
‘‘(I) 92 percent or more of indi-
viduals with end stage renal disease 
receiving 
erythopoetin 
stimulating 
agents who have an average hemato-
crit of 33.0 percent or more; and 
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‘‘(II) less than a percentage, 
specified by the Secretary, of individ-
uals with end stage renal disease re-
ceiving 
erythopoetin 
stimulating 
agents who have an average hemato-
crit of 39.0 percent or more. 
‘‘(ii) 2009 AND 2010.—For the 2009 
and 2010 performance periods, the appli-
cable performance standard for a provider 
or facility under this subparagraph is suc-
cessful performance (relative to national 
average) on— 
‘‘(I) such measures of anemia 
management as the Secretary shall 
specify, including measures of hemo-
globin levels or hematocrit levels for 
erythropoietin stimulating agents that 
are consistent with the labeling for 
dosage of erythropoietin stimulating 
agents approved by the Food and 
Drug Administration for treatment of 
anemia in patients with end stage 
renal disease, taking into account 
variations in hemoglobin ranges or 
hematocrit levels of patients; and 
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‘‘(II) such other measures, relat-
ing to subjects described in subpara-
graph (D)(i), as the Secretary may 
specify. 
‘‘(D) REPORTING
PERFORMANCE
MEAS-
URES.—The performance measures under this 
subparagraph to be reported shall include— 
‘‘(i) such measures as the Secretary 
specifies, before the beginning of the per-
formance period involved and taking into 
account measures endorsed by the Na-
tional Quality Forum, including, to the ex-
tent feasible measures on— 
‘‘(I) iron management; 
‘‘(II) dialysis adequacy; and 
‘‘(III) vascular access, including 
for maximizing the placement of arte-
rial venous fistula; and 
‘‘(ii) to the extent feasible, such meas-
ure (or measures) of patient satisfaction as 
the Secretary shall specify. 
The provider or facility submitting information 
on such measures shall attest to the complete-
ness and accuracy of such information. 
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‘‘(E) APPLICABLE PERCENTAGE.—The ap-
plicable percentage specified in this subpara-
graph for— 
‘‘(i) the performance period occurring 
in 2008, is 1.0 percent; 
‘‘(ii) the 2009 performance period, is 
2.0 percent; and 
‘‘(iii) the 2010 performance period, is 
3.0 percent. 
In the case of any performance period which is 
less than an entire year, the applicable percent-
age specified in this subparagraph shall be mul-
tiplied by the ratio of the number of months in 
the year to the number of months in such per-
formance period. In the case of 2010, the appli-
cable percentage specified in this subparagraph 
shall be multiplied by the Secretary’s estimate 
of the ratio of the aggregate payment amount 
described in subparagraph (F)(i) that would 
apply in 2010 if paragraph (14) did not apply, 
to the aggregate payment base under subpara-
graph (F)(ii) for 2010. 
‘‘(F) PAYMENT BASE.—The payment base 
described in this subparagraph for a provider or 
facility is— 
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‘‘(i) for performance periods before 
2010, the payment amount determined 
under paragraph (12) for services fur-
nished by the provider or facility during 
the performance period, including the drug 
payment adjustment described in subpara-
graph (B)(ii) of such paragraph; and 
‘‘(ii) for the 2010 performance period 
is the amount determined under paragraph 
(14) for services furnished by the provider 
or facility during the period. 
‘‘(G) LIMITATION ON FUNDING.— 
‘‘(i) IN
GENERAL.—If the Secretary 
determines that the total payments under 
this paragraph for a performance period is 
projected to exceed the dollar amount spec-
ified in clause (ii) for such period, the Sec-
retary shall reduce, in a pro rata manner, 
the amount of such payments for each pro-
vider or facility for such period to elimi-
nate any such projected excess for the pe-
riod. 
‘‘(ii) DOLLAR
AMOUNT.—The dollar 
amount specified in this clause— 
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‘‘(I) for the performance period 
occurring in 2008, is $50,000,000; 
‘‘(II) for the 2009 performance 
period is $100,000,000; and 
‘‘(III) for the 2010 performance 
period is $150,000,000. 
‘‘(H) FORM OF PAYMENT.—The payment 
under this paragraph shall be in the form of a 
single consolidated payment. 
‘‘(2) QUALITY INCENTIVE PAYMENTS FOR FA-
CILITIES AND PROVIDERS FOR 2011.— 
‘‘(A) INCREASED PAYMENT.—For 2011, in 
the case of a provider or facility that, for the 
performance period (as defined in subparagraph 
(B))— 
‘‘(i) meets (or exceeds) the perform-
ance standard for anemia management 
specified in paragraph (1)(C)(ii)(I); 
‘‘(ii) has substantially improved per-
formance or exceeds a performance stand-
ard (as determined under subparagraph 
(E)); and 
‘‘(iii) reports measures specified in 
paragraph (1)(D), 
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with respect to renal dialysis services furnished 
by the provider or facility during the quality 
bonus payment period (as specified in subpara-
graph (C)) the payment amount otherwise made 
to such provider or facility under subsection 
(b)(14) shall be increased, subject to subpara-
graph (F), by the applicable percentage speci-
fied in subparagraph (D). Payment amounts 
under paragraph (1) shall not be counted for 
purposes of applying the previous sentence. 
‘‘(B) PERFORMANCE
PERIOD.—In this 
paragraph, the term ‘performance period’ 
means a multi-month period specified by the 
Secretary. 
‘‘(C) QUALITY BONUS PAYMENT PERIOD.— 
In this paragraph, the term ‘quality bonus pay-
ment period’ means, with respect to a perform-
ance period, a multi-month period beginning on 
January 1, 2011, specified by the Secretary 
that begins at least 3 months (but not more 
than 9 months) after the end of the perform-
ance period. 
‘‘(D) APPLICABLE PERCENTAGE.—The ap-
plicable percentage specified in this subpara-
graph is a percentage, not to exceed the 4.0 
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percent, specified by the Secretary consistent 
with subparagraph (F). Such percentage may 
vary based on the level of performance and im-
provement. The applicable percentage specified 
in this subparagraph shall be multiplied by the 
ratio applied under the third sentence of para-
graph (1)(E) for 2010. 
‘‘(E) PERFORMANCE
STANDARD.—Based 
on performance of a provider of services or a 
renal dialysis facility on performance measures 
described in paragraph (1)(D) for a perform-
ance period, the Secretary shall determine a 
composite score for such period. 
‘‘(F) LIMITATION
ON
FUNDING.—If the 
Secretary determines that the total amount to 
be paid under this paragraph for a quality 
bonus payment period is projected to exceed 
$200,000,000, the Secretary shall reduce, in a 
uniform manner, the applicable percentage oth-
erwise applied under subparagraph (D) for 
services furnished during the period to elimi-
nate any such projected excess. 
‘‘(3) APPLICATION.— 
‘‘(A) IMPLEMENTATION.—Notwithstanding 
any other provision of law, the Secretary may 
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implement by program instruction or otherwise 
this subsection. 
‘‘(B) LIMITATIONS ON REVIEW.— 
‘‘(i) IN GENERAL.—There shall be no 
administrative or judicial review under sec-
tion 1869 or 1878 or otherwise of— 
‘‘(I) the determination of per-
formance measures and standards 
under this subsection; 
‘‘(II) the determination of suc-
cessful reporting, including a deter-
mination of composite scores; and 
‘‘(III) the determination of the 
quality 
incentive 
payments 
made 
under this subsection. 
‘‘(ii) TREATMENT
OF
DETERMINA-
TIONS.—A determination under this sub-
paragraph shall not be treated as a deter-
mination for purposes of section 1869. 
‘‘(4) TECHNICAL ASSISTANCE.—The Secretary 
shall identify or establish an appropriately skilled 
group or organization, such as the ESRD Networks, 
to provide technical assistance to consistently low- 
performing facilities or providers that are in the bot-
tom quintile. 
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‘‘(5) PUBLIC REPORTING.— 
‘‘(A) ANNUAL
NOTICE.—The Secretary 
shall provide an annual written notification to 
each individual who is receiving renal dialysis 
services from a provider of services or renal di-
alysis facility that— 
‘‘(i) informs such individual of the 
composite scores described in subpara-
graph (A) and other relevant quality meas-
ures with respect to providers of services 
or renal dialysis facilities in the local area; 
‘‘(ii) compares such scores and meas-
ures to the average local and national 
scores and measures; and 
‘‘(iii) provides information on how to 
access additional information on quality of 
such services furnished and options for al-
ternative providers and facilities. 
‘‘(B) CERTIFICATES.—The Secretary shall 
provide certificates to facilities and providers 
who provide services to individuals with end- 
stage renal disease under this title to display in 
patient areas. The certificate shall indicate the 
composite score obtained by the facility or pro-
vider under the quality initiative. 
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‘‘(C) WEB-BASED
QUALITY
LIST.—The 
Secretary shall establish a web-based list of fa-
cilities and providers who furnish renal dialysis 
services under this section that indicates their 
composite score of each provider and facility. 
‘‘(6) RECOMMENDATIONS FOR REPORTING AND 
QUALITY INCENTIVE INITIATIVE FOR PHYSICIANS.— 
The Secretary shall develop recommendations for ap-
plying quality incentive payments under this sub-
section to physicians who receive the monthly 
capitated payment under this title. Such rec-
ommendations shall include the following: 
‘‘(A) Recommendations to include pediatric 
specific measures for physicians with at least 
50 percent of their patients with end stage 
renal disease being individuals under 18 years 
of age. 
‘‘(B) Recommendations on how to struc-
ture quality incentive payments for physicians 
who demonstrate improvements in quality or 
who attain quality standards, as specified by 
the Secretary. 
‘‘(7) REPORTS.— 
‘‘(A) INITIAL
REPORT.—Not later than 
January 1, 2013, the Secretary shall submit to 
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Congress a report on the implementation of the 
bundled payment system under subsection 
(b)(14) and the quality initiative under this 
subsection. Such report shall include the fol-
lowing information: 
‘‘(i) A comparison of the aggregate 
payments under subsection (b)(14) for 
items and services to the cost of such items 
and services. 
‘‘(ii) The changes in utilization rates 
for erythropoietin stimulating agents. 
‘‘(iii) The mode of administering such 
agents, including information on the pro-
portion of such individuals receiving such 
agents 
intravenously 
as 
compared 
to 
subcutaneously. 
‘‘(iv) The frequency of dialysis. 
‘‘(v) Other differences in practice pat-
terns, such as the adoption of new tech-
nology, different modes of practice, and 
variations in use of drugs other than drugs 
described in clause (iii). 
‘‘(vi) The performance of facilities and 
providers under paragraph (2). 
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‘‘(vii) Other recommendations for leg-
islative and administrative actions deter-
mined appropriate by the Secretary. 
‘‘(B) SUBSEQUENT
REPORT.—Not later 
than January 1, 2015, the Secretary shall sub-
mit to Congress a report that contains the in-
formation described in each of clauses (ii) 
through (vii) of subparagraph (A) and a com-
parison of the results of the payment system 
under subsection (b)(14) for renal dialysis serv-
ices furnished during the 2-year period begin-
ning on January 1, 2013, and the results of 
such payment system for such services fur-
nished during the previous two-year period.’’. 
SEC. 638. MEDPAC REPORT ON ESRD BUNDLING SYSTEM. 
Not later than March 1, 2012, the Medicare Payment 
Advisory Commission (established under section 1805 of 
the Social Security Act) shall submit to Congress a report 
on the implementation of the payment system under sec-
tion 1881(b)(14) of the Social Security Act (as added by 
section 7) for renal dialysis services and related services 
(defined in subparagraph (B) of such section). Such report 
shall include, with respect to such payment system for 
such services, an analysis of each of the following: 
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(1) An analysis of the overall adequacy of pay-
ment under such system for all such services. 
(2) An analysis that compares the adequacy of 
payment under such system for services furnished 
by— 
(A) a provider of services or renal dialysis 
facility 
that 
is 
described 
in 
section 
1881(b)(13)(C)(iv) of the Social Security Act; 
(B) a provider of services or renal dialysis 
facility not described in such section; 
(C) a hospital-based facility; 
(D) a freestanding renal dialysis facility; 
(E) a renal dialysis facility located in an 
urban area; and 
(F) a renal dialysis facility located in a 
rural area. 
(3) An analysis of the financial status of pro-
viders of such services and renal dialysis facilities, 
including access to capital, return on equity, and re-
turn on capital. 
(4) An analysis of the adequacy of payment 
under such method and the adequacy of the quality 
improvement payments under section 1881(i) of the 
Social Security Act in ensuring that payments for 
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such services under the Medicare program are con-
sistent with costs for such services. 
(5) Recommendations, if appropriate, for modi-
fications to such payment system. 
SEC. 639. OIG STUDY AND REPORT ON ERYTHROPOIETIN. 
(a) STUDY.—The Inspector General of the Depart-
ment of Health and Human Services shall conduct a study 
on the following: 
(1) The dosing guidelines, standards, protocols, 
and algorithms for erythropoietin stimulating agents 
recommended or used by providers of services and 
renal dialysis facilities that are described in section 
1881(b)(13)(C)(iv) of the Social Security Act and 
providers and facilities that are not described in 
such section. 
(2) The extent to which such guidelines, stand-
ards, protocols, and algorithms are consistent with 
the labeling of the Food and Drug Administration 
for such agents. 
(3) The extent to which physicians sign stand-
ing orders for such agents that are consistent with 
such guidelines, standards, protocols, and algorithms 
recommended or used by the provider or facility in-
volved. 
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(4) The extent to which the prescribing deci-
sions of physicians, with respect to such agents, are 
independent of— 
(A) such relevant guidelines, standards, 
protocols, and algorithms; or 
(B) recommendations of an anemia man-
agement nurse or other appropriate employee of 
the provider or facility involved. 
(5) The role of medical directors of providers of 
services and renal dialysis facilities and the financial 
relationships between such providers and facilities 
and the physicians hired as medical directors of such 
providers and facilities, respectively. 
(b) REPORT.—Not later than January 1, 2009, the 
Inspector General of the Department of Health and 
Human Services shall submit to Congress a report on the 
study conducted under subsection (a), together with such 
recommendations as the Inspector General determines ap-
propriate. 
Subtitle D—Miscellaneous 
SEC. 651. LIMITATION ON EXCEPTION TO THE PROHIBI-
TION ON CERTAIN PHYSICIAN REFERRALS 
FOR HOSPITALS. 
(a) IN GENERAL.—Section 1877 of the Social Secu-
rity Act (42 U.S.C. 1395) is amended— 
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(1) in subsection (d)(2)— 
(A) in subparagraph (A), by striking 
‘‘and’’ at the end; 
(B) in subparagraph (B), by striking the 
period at the end and inserting ‘‘; and’’; and 
(C) by adding at the end the following new 
subparagraph: 
‘‘(C) if the entity is a hospital, the hospital 
meets the requirements of paragraph (3)(D).’’; 
(2) in subsection (d)(3)— 
(A) in subparagraph (B), by striking 
‘‘and’’ at the end; 
(B) in subparagraph (C), by striking the 
period at the end and inserting ‘‘; and’’; and 
(C) by adding at the end the following new 
subparagraph: 
‘‘(D) the hospital meets the requirements 
described in subsection (i)(1) not later than 18 
months after the date of the enactment of this 
subparagraph.’’; and 
(3) by adding at the end the following new sub-
section: 
‘‘(i) REQUIREMENTS FOR HOSPITALS TO QUALIFY 
FOR HOSPITAL EXCEPTION TO OWNERSHIP OR INVEST-
MENT PROHIBITION.— 
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‘‘(1) REQUIREMENTS
DESCRIBED.—For pur-
poses of paragraphs subsection (d)(3)(D), the re-
quirements described in this paragraph for a hos-
pital are as follows: 
‘‘(A) PROVIDER
AGREEMENT.—The hos-
pital had a provider agreement under section 
1866 in effect on July 24, 2007. 
‘‘(B) PROHIBITION OF EXPANSION OF FA-
CILITY
CAPACITY.—The number of operating 
rooms and beds of the hospital at any time on 
or after the date of the enactment of this sub-
section are no greater than the number of oper-
ating rooms and beds as of such date. 
‘‘(C) PREVENTING CONFLICTS OF INTER-
EST.— 
‘‘(i) The hospital submits to the Sec-
retary an annual report containing a de-
tailed description of— 
‘‘(I) the identity of each physi-
cian owner and any other owners of 
the hospital; and 
‘‘(II) the nature and extent of all 
ownership interests in the hospital. 
‘‘(ii) The hospital has procedures in 
place to require that any referring physi-
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cian owner discloses to the patient being 
referred, by a time that permits the pa-
tient to make a meaningful decision re-
garding the receipt of care, as determined 
by the Secretary— 
‘‘(I) the ownership interest of 
such referring physician in the hos-
pital; and 
‘‘(II) if applicable, any such own-
ership interest of the treating physi-
cian. 
‘‘(iii) The hospital does not condition 
any physician ownership interests either di-
rectly or indirectly on the physician owner 
making or influencing referrals to the hos-
pital or otherwise generating business for 
the hospital. 
‘‘(D) ENSURING
BONA
FIDE
INVEST-
MENT.— 
‘‘(i) Physician owners in the aggregate 
do not own more than 40 percent of the 
total value of the investment interests held 
in the hospital or in an entity whose assets 
include the hospital. 
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‘‘(ii) The investment interest of any 
individual physician owner does not exceed 
2 percent of the total value of the invest-
ment interests held in the hospital or in an 
entity whose assets include the hospital. 
‘‘(iii) Any ownership or investment in-
terests that the hospital offers to a physi-
cian owner are not offered on more favor-
able terms than the terms offered to a per-
son who is not a physician owner. 
‘‘(iv) The hospital does not directly or 
indirectly provide loans or financing for 
any physician owner investments in the 
hospital. 
‘‘(v) The hospital does not directly or 
indirectly guarantee a loan, make a pay-
ment toward a loan, or otherwise subsidize 
a loan, for any individual physician owner 
or group of physician owners that is re-
lated to acquiring any ownership interest 
in the hospital. 
‘‘(vi) Investment returns are distrib-
uted to investors in the hospital in an 
amount that is directly proportional to the 
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investment of capital by the physician 
owner in the hospital. 
‘‘(vii) Physician owners do not receive, 
directly or indirectly, any guaranteed re-
ceipt of or right to purchase other business 
interests related to the hospital, including 
the purchase or lease of any property 
under the control of other investors in the 
hospital or located near the premises of the 
hospital. 
‘‘(viii) The hospital does not offer a 
physician owner the opportunity to pur-
chase or lease any property under the con-
trol of the hospital or any other investor in 
the hospital on more favorable terms than 
the terms offered to an individual who is 
not a physician owner. 
‘‘(E) PATIENT SAFETY.— 
‘‘(i) Insofar as the hospital admits a 
patient and does not have any physician 
available on the premises to provide serv-
ices during all hours in which the hospital 
is providing services to such patient, before 
admitting the patient— 
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‘‘(I) the hospital discloses such 
fact to a patient; and 
‘‘(II) following such disclosure, 
the hospital receives from the patient 
a signed acknowledgment that the pa-
tient understands such fact. 
‘‘(ii) The hospital has the capacity 
to— 
‘‘(I) provide assessment and ini-
tial treatment for patients; and 
‘‘(II) refer and transfer patients 
to hospitals with the capability to 
treat the needs of the patient in-
volved. 
‘‘(2) 
PUBLICATION
OF
INFORMATION
RE-
PORTED.—The Secretary shall publish, and update 
on an annual basis, the information submitted by 
hospitals under paragraph (1)(C)(i) on the public 
Internet website of the Centers for Medicare & Med-
icaid Services. 
‘‘(3) COLLECTION OF OWNERSHIP AND INVEST-
MENT INFORMATION.—For purposes of clauses (i) 
and (ii) of paragraph (1)(D), the Secretary shall col-
lect physician ownership and investment information 
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for each hospital as it existed on the date of the en-
actment of this subsection. 
‘‘(4) PHYSICIAN OWNER DEFINED.—For pur-
poses of this subsection, the term ‘physician owner’ 
means a physician (or an immediate family member 
of such physician) with a direct or an indirect own-
ership interest in the hospital.’’. 
(b) ENFORCEMENT.— 
(1) ENSURING COMPLIANCE.—The Secretary of 
Health and Human Services shall establish policies 
and procedures to ensure compliance with the re-
quirements described in such section 1877(i)(1) of 
the Social Security Act, as added by subsection 
(a)(3), beginning on the date such requirements first 
apply. Such policies and procedures may include un-
announced site reviews of hospitals. 
(2) AUDITS.—Beginning not later than 18 
months after the date of the enactment of this Act, 
the Secretary of Health and Human Services shall 
conduct audits to determine if hospitals violate the 
requirements referred to in paragraph (1). 
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TITLE VII—PROVISIONS RELAT-
ING TO MEDICARE PARTS A 
AND B 
SEC. 701. HOME HEALTH PAYMENT UPDATE FOR 2008. 
Section 1895(b)(3)(B)(ii) of the Social Security Act 
(42 U.S.C. 1395fff(b)(3)(B)(ii)) is amended— 
(1) in subclause (IV) at the end, by striking 
‘‘and’’; 
(2) by redesignating subclause (V) as subclause 
(VII); and 
(3) by inserting after subclause (IV) the fol-
lowing new subclauses: 
‘‘(V) 2007, subject to clause (v), 
the home health market basket per-
centage increase; 
‘‘(VI) 2008, subject to clause (v), 
0 percent; and’’. 
SEC. 702. 2-YEAR EXTENSION OF TEMPORARY MEDICARE 
PAYMENT INCREASE FOR HOME HEALTH 
SERVICES FURNISHED IN A RURAL AREA. 
Section 421 of the Medicare Prescription Drug, Im-
provement, and Modernization Act of 2003 (Public Law 
108–173; 117 Stat. 2283; 42 U.S.C. 1395fff note), as 
amended by section 5201(b) of the Deficit Reduction Act 
of 2005, is amended— 
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(1) in the heading, by striking ‘‘ONE-YEAR’’ 
and inserting ‘‘TEMPORARY’’; and 
(2) in subsection (a), by striking ‘‘and episodes 
and visits beginning on or after January 1, 2006, 
and before January 1, 2007’’ and inserting ‘‘epi-
sodes and visits beginning on or after January 1, 
2006, and before January 1, 2007, and episodes and 
visits beginning on or after January 1, 2008, and 
before January 1, 2010’’. 
SEC. 703. EXTENSION OF MEDICARE SECONDARY PAYER 
FOR 
BENEFICIARIES 
WITH 
END 
STAGE 
RENAL DISEASE FOR LARGE GROUP PLANS. 
(a) IN GENERAL.—Section 1862(b)(1)(C) of the So-
cial Security Act (42 U.S.C. 1395y(b)(1)(C)) is amend-
ed— 
(1) by redesignating clauses (i) and (ii) as sub-
clauses (I) and (II), respectively, and indenting ac-
cordingly; 
(2) by amending the text preceding subclause 
(I), as so redesignated, to read as follows: 
‘‘(C) INDIVIDUALS
WITH
END
STAGE 
RENAL DISEASE.— 
‘‘(i) IN
GENERAL.—A group health 
plan 
(as 
defined 
in 
subparagraph 
(A)(v))—’’; 
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(3) in the matter following subclause (II), as so 
redesignated— 
(A) by striking ‘‘clause (i)’’ and inserting 
‘‘subclause (I)’’; 
(B) by striking ‘‘clause (ii)’’ and inserting 
‘‘subclause (II)’’; 
(C) by striking ‘‘clauses (i) and (ii)’’ and 
inserting ‘‘subclauses (I) and (II)’’; and 
(D) in the last sentence, by striking ‘‘Ef-
fective for items’’ and inserting ‘‘Subject to 
clause (ii), effective for items’’; and 
(4) by adding at the end the following new 
clause: 
‘‘(ii) SPECIAL
RULE
FOR
LARGE 
GROUP PLANS.—In applying clause (i) to 
a large group health plan (as defined in 
subparagraph (B)(iii)). effective for items 
and services furnished on or after January 
1, 2008, (with respect to periods beginning 
on or after the date that is 30 months 
prior to January 1, 2008), subclauses (I) 
and (II) of such clause shall be applied by 
substituting ‘42-month’ for ‘12-month’ 
each place it appears.’’. 
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SEC. 704. PLAN FOR MEDICARE PAYMENT ADJUSTMENTS 
FOR NEVER EVENTS. 
(a) IN GENERAL.—The Secretary of Health and 
Human Services (in this section referred to as the ‘‘Sec-
retary’’) shall develop a plan (in this section referred to 
as the ‘‘never events plan’’) to implement, beginning in 
fiscal year 2010, a policy to reduce or eliminate payments 
under title XVIII of the Social Security Act for never 
events. 
(b) NEVER EVENT DEFINED.—For purposes of this 
section, the term ‘‘never event’’ means an event involving 
the delivery of (or failure to deliver) physicians’ services, 
inpatient or outpatient hospital services, or facility serv-
ices furnished in an ambulatory surgical facility in which 
there is an error in medical care that is clearly identifiable, 
usually preventable, and serious in consequences to pa-
tients, and that indicates a deficiency in the safety and 
process controls of the services furnished with respect to 
the physician, hospital, or ambulatory surgical center in-
volved. 
(c) PLAN DETAILS.— 
(1) DEFINING NEVER EVENTS.—With respect 
to criteria for identifying never events under the 
never events plan, the Secretary should consider 
whether the event meets the following characteris-
tics: 
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(A) CLEARLY IDENTIFIABLE.—The event 
is clearly identifiable and measurable and fea-
sible to include in a reporting system for never 
events. 
(B) USUALLY PREVENTABLE.—The event 
is usually preventable taking into consideration 
that, because of the complexity of medical care, 
certain medical events are not always avoidable. 
(C) SERIOUS.—The event is serious and 
could result in death or loss of a body part, dis-
ability, or more than transient loss of a body 
function. 
(D) DEFICIENCY IN SAFETY AND PROCESS 
CONTROLS.—The event is indicative of a prob-
lem in safety systems and process controls used 
by the physician, hospital, or ambulatory sur-
gical center involved and is indicative of the re-
liability of the quality of services provided by 
the physician, hospital, or ambulatory surgical 
center, respectively. 
(2) IDENTIFICATION AND PAYMENT ISSUES.— 
With respect to policies under the never events plan 
for identifying and reducing (or eliminating) pay-
ment for never events, the Secretary shall consider— 
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(A) mechanisms used by hospitals and 
physicians in reporting and coding of services 
that would reliably identify never events; and 
(B) modifications in billing and payment 
mechanisms that would enable the Secretary to 
efficiently and accurately reduce or eliminate 
payments for never events. 
(3) PRIORITIES.—Under the never events plan 
the Secretary shall identify priorities regarding the 
services to focus on and, among those, the never 
events for which payments should be reduced or 
eliminated. 
(4) CONSULTATION.—In developing the never 
events plan, the Secretary shall consult with affected 
parties that are relevant to payment reductions in 
response to never events. 
(d) CONGRESSIONAL REPORT.—By not later than 
June 1, 2008, the Secretary shall submit a report to Con-
gress on the never events plan developed under this sub-
section and shall include in the report recommendations 
on specific methods for implementation of the plan on a 
timely basis. 
SEC. 705. REINSTATEMENT OF RESIDENCY SLOTS. 
(a) IN GENERAL.—Section 1886(h) of the Social Se-
curity Act (42 U.S.C. 1395ww(h)) is amended— 
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(1) in paragraph (4)(H), by adding at the end 
the following new clauses: 
‘‘(v) INCREASE
IN
RESIDENT
LIMIT 
DUE TO CLOSURE OF OTHER HOSPITALS.— 
If one or more hospitals with approved 
medical residency training programs, which 
are located within the same metropolitan 
statistical area as of January 1, 2001, 
closed, the Secretary shall increase by not 
more than 10
(subject to the limitation 
set forth in the last sentence of this clause) 
the otherwise applicable resident limit 
under subparagraph (F) for each hospital 
within the same metropolitan statistical 
area that meets all the following criteria: 
‘‘(I) The hospital is described in 
subsection (d)(5)(F)(i). 
‘‘(II) The hospital instituted a 
medical residency training program in 
internal medicine that was accredited 
by the American Osteopathic Associa-
tion on or after January 1, 2004. 
‘‘(III) The hospital had a pro-
vider number and a resident limit as 
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of January 1, 2000, and remained 
open as of October 1, 2007. 
‘‘(IV) The hospital did not re-
ceive an increase in its resident limit 
under paragraph (7)(B). 
‘‘(V) The hospital maintains no 
more than 400 beds. 
In no event may the resident limit for any 
hospital be increased above 50 through ap-
plication of this clause and in no event 
may the total of the residency positions 
added by this clause for all hospitals ex-
ceed 10. 
‘‘(vi) 
INCREASE
IN
RESIDENCY 
SLOTS.—In the case of a hospital located 
in Peoria County, Illinois, that has more 
than 500 beds, the Secretary shall increase 
by two the otherwise applicable resident 
limit under subparagraph (F) for such hos-
pital.’’; and 
(2) in paragraph (7)— 
(A) by redesignating subparagraph (D) as 
subparagraph (E); and 
(B) by inserting after subparagraph (C) 
the following new subparagraph: 
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