400 
ing ‘‘nurse practitioner, a clinical nurse specialist, or 
a physician assistant’’. 
(2) in the second sentence, by striking ‘‘or clin-
ical nurse specialist’’ and inserting ‘‘clinical nurse 
specialist, or physician assistant’’. 
(b) RECOGNITION OF ATTENDING PHYSICIAN AS-
SISTANTS AS ATTENDING PHYSICIANS TO SERVE HOSPICE 
PATIENTS.— 
(1) IN GENERAL.—Section 1861(dd)(3)(B) of 
such Act (42 U.S.C. 1395x(dd)(3)(B)) is amended— 
(A) by striking ‘‘or nurse’’ and inserting ‘‘, 
the nurse’’; and 
(B) by inserting ‘‘or the physician assist-
ant (as defined in such subsection),’’ after 
‘‘subsection (aa)(5)),’’. 
(2) 
CONFORMING
AMENDMENT.—Section 
1814(a)(7)(A)(i)(I) 
of 
such 
Act 
(42 
U.S.C. 
1395f(a)(7)(A)(i)(I)) is amended by inserting ‘‘or a 
physician assistant’’ after ‘‘a nurse practitioner’’. 
(3) CONSTRUCTION.—Nothing in the amend-
ments made by this subsection shall be construed as 
changing the requirements of section 1842(b)(6)(C) 
of 
the 
Social 
Security 
Act 
(42 
U.S.C. 
1395u(b)(6)(C)) with respect to payment for serv-
401 
ices of physician assistants under part B of title 
XVIII of such Act. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to items and services furnished on 
or after January 1, 2010. 
Subtitle B—Provisions Related to 
Part B 
PART 1—PHYSICIANS’ SERVICES 
SEC. 1121. RESOURCE-BASED FEEDBACK PROGRAM FOR 
PHYSICIANS IN MEDICARE. 
Section 1848(n) of the Social Security Act (42 U.S.C. 
1395w–4(n)) is amended by adding at the end the fol-
lowing new paragraph: 
‘‘(9) FEEDBACK IMPLEMENTATION PLAN.— 
‘‘(A) TIMELINE
FOR
FEEDBACK
PRO-
GRAM.— 
‘‘(i) EVALUATION.—During 2011 the 
Secretary shall conduct the evaluation 
specified in subparagraph (E)(i). 
‘‘(ii) 
EXPANSION.—The 
Secretary 
shall expand the Program under this sub-
section 
as 
specified 
in 
subparagraph 
(E)(ii). 
‘‘(B) ESTABLISHMENT OF NATURE OF RE-
PORTS.—
402 
‘‘(i) IN
GENERAL.—The Secretary 
shall develop and specify the nature of the 
reports that will be disseminated under 
this subsection, based on results and find-
ings from the Program under this sub-
section as in existence before the date of 
the enactment of this paragraph. Such re-
ports may be based on a per capita basis, 
an episode basis that combines separate 
but clinically related physicians’ services 
and other items and services furnished or 
ordered by a physician into an episode of 
care, as appropriate, or both. 
‘‘(ii) 
TIMELINE
FOR
DEVELOP-
MENT.—The nature of the reports de-
scribed in clause (i) shall be developed by 
not later than January 1, 2012. 
‘‘(iii) 
PUBLIC
AVAILABILITY.—The 
Secretary shall make the details of the na-
ture of the reports developed under clause 
(i) available to the public. 
‘‘(C) ANALYSIS OF DATA.—The Secretary 
shall, for purposes of preparing reports under 
this subsection, establish methodologies as ap-
propriate such as to—
403 
‘‘(i) attribute items and services, in 
whole or in part, to physicians; 
‘‘(ii) identify appropriate physicians 
for purposes of comparison under subpara-
graph (B)(i); and 
‘‘(iii) aggregate items and services at-
tributed to a physician under clause (i) 
into a composite measure per individual. 
‘‘(D) FEEDBACK
PROGRAM.—The Sec-
retary shall engage in efforts to disseminate re-
ports under this subsection. In disseminating 
such reports, the Secretary shall consider the 
following: 
‘‘(i) Direct meetings between con-
tracted physicians, facilitated by the Sec-
retary, to discuss the contents of reports 
under this subsection, including any rea-
sons for divergence from local or national 
averages. 
‘‘(ii) Contract with local, non-profit 
entities engaged in quality improvement ef-
forts at the community level. Such entities 
shall use the reports under this subsection, 
or such equivalent tool as specified by the 
Secretary. Any exchange of data under this
404 
paragraph shall be protected by appro-
priate privacy safeguards. 
‘‘(iii) Mailings or other methods of 
communication that facilitate large-scale 
dissemination. 
‘‘(iv) Other methods specified by the 
Secretary. 
‘‘(E) EVALUATION AND EXPANSION.— 
‘‘(i) 
EVALUATION.—The 
Secretary 
shall evaluate the methods specified in sub-
paragraph (D) with regard to their efficacy 
in changing practice patterns to improve 
quality and decrease costs. 
‘‘(ii) EXPANSION.—Taking into ac-
count the cost of each method specified in 
subparagraph (D), the Secretary shall de-
velop a plan to disseminate reports under 
this subsection in a significant manner in 
the regions and cities of the country with 
the highest utilization of services under 
this title. To the extent practicable, reports 
under this subsection shall be disseminated 
to increasing numbers of physicians each 
year, such that during 2014 and subse-
quent years, reports are disseminated at
405 
least to physicians with utilization rates 
among the highest 5 percent of the nation, 
subject the authority to focus under para-
graph (4). 
‘‘(F) ADMINISTRATION.— 
‘‘(i) Chapter 35 of title 44, United 
States Code, shall not apply to this para-
graph. 
‘‘(ii) Notwithstanding any other provi-
sion of law, the Secretary may implement 
the provisions of this paragraph by pro-
gram instruction or otherwise.’’. 
SEC. 1122. MISVALUED CODES UNDER THE PHYSICIAN FEE 
SCHEDULE. 
(a) IN GENERAL.—Section 1848(c)(2) of the Social 
Security Act (42 U.S.C. 1395w–4(c)(2)) is amended by 
adding at the end the following new subparagraphs: 
‘‘(K) POTENTIALLY MISVALUED CODES.— 
‘‘(i) IN
GENERAL.—The Secretary 
shall— 
‘‘(I) periodically identify services 
as being potentially misvalued using 
criteria specified in clause (ii); and 
‘‘(II) review and make appro-
priate adjustments to the relative val-
406 
ues established under this paragraph 
for services identified as being poten-
tially misvalued under subclause (I). 
‘‘(ii) 
IDENTIFICATION
OF
POTEN-
TIALLY MISVALUED CODES.—For purposes 
of identifying potentially misvalued services 
pursuant to clause (i)(I), the Secretary 
shall examine (as the Secretary determines 
to be appropriate) codes (and families of 
codes as appropriate) for which there has 
been the fastest growth; codes (and fami-
lies of codes as appropriate) that have ex-
perienced substantial changes in practice 
expenses; codes for new technologies or 
services within an appropriate period (such 
as three years) after the relative values are 
initially established for such codes; mul-
tiple codes that are frequently billed in 
conjunction with furnishing a single serv-
ice; codes with low relative values, particu-
larly those that are often billed multiple 
times for a single treatment; codes which 
have not been subject to review since the 
implementation of the RBRVS (the so- 
called ‘Harvard-valued codes’); and such
407 
other codes determined to be appropriate 
by the Secretary. 
‘‘(iii) REVIEW AND ADJUSTMENTS.— 
‘‘(I) The Secretary may use ex-
isting 
processes 
to 
receive 
rec-
ommendations on the review and ap-
propriate adjustment of potentially 
misvalued services described clause 
(i)(II). 
‘‘(II) The Secretary may conduct 
surveys, other data collection activi-
ties, studies, or other analyses as the 
Secretary determines to be appro-
priate to facilitate the review and ap-
propriate adjustment described in 
clause (i)(II). 
‘‘(III) The Secretary may use 
analytic contractors to identify and 
analyze 
services 
identified 
under 
clause (i)(I), conduct surveys or col-
lect data, and make recommendations 
on the review and appropriate adjust-
ment of services described in clause 
(i)(II).
408 
‘‘(IV) The Secretary may coordi-
nate the review and appropriate ad-
justment described in clause (i)(II) 
with the periodic review described in 
subparagraph (B). 
‘‘(V) As part of the review and 
adjustment described in clause (i)(II), 
including with respect to codes with 
low relative values described in clause 
(ii), the Secretary may make appro-
priate 
coding 
revisions 
(including 
using existing processes for consider-
ation of coding changes) which may 
include consolidation of individual 
services into bundled codes for pay-
ment under the fee schedule under 
subsection (b). 
‘‘(VI) The provisions of subpara-
graph (B)(ii)(II) shall apply to adjust-
ments to relative value units made 
pursuant to this subparagraph in the 
same manner as such provisions apply 
to adjustments under subparagraph 
(B)(ii)(II).
409 
‘‘(L) 
VALIDATING
RELATIVE
VALUE 
UNITS.— 
‘‘(i) IN
GENERAL.—The Secretary 
shall establish a process to validate relative 
value units under the fee schedule under 
subsection (b). 
‘‘(ii) COMPONENTS
AND
ELEMENTS 
OF
WORK.—The process described in 
clause (i) may include validation of work 
elements (such as time, mental effort and 
professional judgment, technical skill and 
physical effort, and stress due to risk) in-
volved with furnishing a service and may 
include validation of the pre, post, and 
intra-service components of work. 
‘‘(iii) SCOPE OF CODES.—The valida-
tion of work relative value units shall in-
clude a sampling of codes for services that 
is the same as the codes listed under sub-
paragraph (K)(ii) 
‘‘(iv) METHODS.—The Secretary may 
conduct the validation under this subpara-
graph using methods described in sub-
clauses (I) through (V) of subparagraph
410 
(K)(iii) as the Secretary determines to be 
appropriate. 
‘‘(v) ADJUSTMENTS.—The Secretary 
shall make appropriate adjustments to the 
work relative value units under the fee 
schedule under subsection (b). The provi-
sions of subparagraph (B)(ii)(II) shall 
apply to adjustments to relative value units 
made pursuant to this subparagraph in the 
same manner as such provisions apply to 
adjustments 
under 
subparagraph 
(B)(ii)(II).’’. 
(b) IMPLEMENTATION.— 
(1) FUNDING.—For purposes of carrying out 
the provisions of subparagraphs (K) and (L) of 
1848(c)(2) of the Social Security Act, as added by 
subsection (a), in addition to funds otherwise avail-
able, out of any funds in the Treasury not otherwise 
appropriated, there are appropriated to the Sec-
retary of Health and Human Services for the Center 
for Medicare & Medicaid Services Program Manage-
ment Account $20,000,000 for fiscal year 2010 and 
each subsequent fiscal year. Amounts appropriated 
under this paragraph for a fiscal year shall be avail-
able until expended.
411 
(2) ADMINISTRATION.— 
(A) Chapter 35 of title 44, United States 
Code, and the provisions of the Federal Advi-
sory Committee Act (5 U.S.C. App.) shall not 
apply to this section or the amendment made by 
this section. 
(B) Notwithstanding any other provision of 
law, the Secretary may implement subpara-
graphs (K) and (L) of 1848(c)(2) of the Social 
Security Act, as added by subsection (a), by 
program instruction or otherwise. 
(C) Section 4505(d) of the Balanced 
Budget Act of 1997 is repealed. 
(D) Except for provisions related to con-
fidentiality of information, the provisions of the 
Federal Acquisition Regulation shall not apply 
to this section or the amendment made by this 
section. 
(3) FOCUSING
CMS
RESOURCES
ON
POTEN-
TIALLY
OVERVALUED
CODES.—Section 1868(a) of 
the Social Security Act (42 U.S.C. 1395ee(a)) is re-
pealed.
412 
SEC. 1123. PAYMENTS FOR EFFICIENT AREAS. 
Section 1833 of the Social Security Act (42 U.S.C. 
1395l) is amended by adding at the end the following new 
subsection: 
‘‘(x) 
INCENTIVE
PAYMENTS
FOR
EFFICIENT 
AREAS.— 
‘‘(1) IN GENERAL.—In the case of services fur-
nished under the physician fee schedule under sec-
tion 1848 on or after January 1, 2011, and before 
January 1, 2013, by a supplier that is paid under 
such fee schedule in an efficient area (as identified 
under paragraph (2)), in addition to the amount of 
payment that would otherwise be made for such 
services under this part, there also shall be paid (on 
a monthly or quarterly basis) an amount equal to 5 
percent of the payment amount for the services 
under this part. 
‘‘(2) IDENTIFICATION OF EFFICIENT AREAS.— 
‘‘(A) IN GENERAL.—Based upon available 
data, the Secretary shall identify those counties 
or equivalent areas in the United States in the 
lowest fifth percentile of utilization based on 
per capita spending under this part and part A 
for services provided in the most recent year for 
which data are available as of the date of the 
enactment of this subsection, as standardized to
413 
eliminate the effect of geographic adjustments 
in payment rates. 
‘‘(B) 
IDENTIFICATION
OF
COUNTIES 
WHERE
SERVICE
IS
FURNISHED..—For pur-
poses of paying the additional amount specified 
in paragraph (1), if the Secretary uses the 5- 
digit postal ZIP Code where the service is fur-
nished, the dominant county of the postal ZIP 
Code (as determined by the United States Post-
al Service, or otherwise) shall be used to deter-
mine whether the postal ZIP Code is in a coun-
ty described in subparagraph (A). 
‘‘(C) LIMITATION
ON
REVIEW.—There 
shall be no administrative or judicial review 
under section 1869, 1878, or otherwise, respect-
ing— 
‘‘(i) the identification of a county or 
other area under subparagraph (A); or 
‘‘(ii) the assignment of a postal ZIP 
Code to a county or other area under sub-
paragraph (B). 
‘‘(D) PUBLICATION OF LIST OF COUNTIES; 
POSTING ON WEBSITE.—With respect to a year 
for which a county or area is identified under 
this paragraph, the Secretary shall identify
414 
such counties or areas as part of the proposed 
and final rule to implement the physician fee 
schedule under section 1848 for the applicable 
year. The Secretary shall post the list of coun-
ties identified under this paragraph on the 
Internet website of the Centers for Medicare & 
Medicaid Services.’’. 
SEC. 1124. MODIFICATIONS TO THE PHYSICIAN QUALITY 
REPORTING INITIATIVE (PQRI). 
(a) FEEDBACK.—Section 1848(m)(5) of the Social 
Security Act (42 U.S.C. 1395w–4(m)(5)) is amended by 
adding at the end the following new subparagraph: 
‘‘(H) FEEDBACK.—The Secretary shall 
provide timely feedback to eligible professionals 
on the performance of the eligible professional 
with respect to satisfactorily submitting data on 
quality measures under this subsection.’’. 
(b) APPEALS.—Such section is further amended— 
(1) in subparagraph (E), by striking ‘‘There 
shall be’’ and inserting ‘‘Except as provided in sub-
paragraph (I), there shall be’’; and 
(2) by adding at the end the following new sub-
paragraph: 
‘‘(I) INFORMAL
APPEALS
PROCESS.—By 
not later than January 1, 2011, the Secretary
415 
shall establish and have in place an informal 
process for eligible professionals to seek a re-
view of the determination that an eligible pro-
fessional did not satisfactorily submit data on 
quality measures under this subsection.’’. 
(c) INTEGRATION OF PHYSICIAN QUALITY REPORT-
ING AND EHR REPORTING.—Section 1848(m) of such 
Act is amended by adding at the end the following new 
paragraph: 
‘‘(7) INTEGRATION OF PHYSICIAN QUALITY RE-
PORTING
AND
EHR
REPORTING.—Not later than 
January 1, 2012, the Secretary shall develop a plan 
to integrate clinical reporting on quality measures 
under this subsection with reporting requirements 
under subsection (o) relating to the meaningful use 
of electronic health records. Such integration shall 
consist of the following: 
‘‘(A) The development of measures, the re-
porting of which would both demonstrate— 
‘‘(i) meaningful use of an electronic 
health record for purposes of subsection 
(o); and 
‘‘(ii) clinical quality of care furnished 
to an individual.
416 
‘‘(B) The collection of health data to iden-
tify deficiencies in the quality and coordination 
of care for individuals eligible for benefits under 
this part. 
‘‘(C) Such other activities as specified by 
the Secretary.’’. 
(d) EXTENSION OF INCENTIVE PAYMENTS.—Section 
1848(m)(1) of such Act (42 U.S.C. 1395w–4(m)(1)) is 
amended— 
(1) in subparagraph (A), by striking ‘‘2010’’ 
and inserting ‘‘2012’’; and 
(2) in subparagraph (B)(ii), by striking ‘‘2009 
and 2010’’ and inserting ‘‘for each of the years 2009 
through 2012’’. 
SEC. 1125. ADJUSTMENT TO MEDICARE PAYMENT LOCAL-
ITIES. 
(a) IN GENERAL.—Section 1848(e) of the Social Se-
curity Act (42 U.S.C.1395w–4(e)) is amended by adding 
at the end the following new paragraph: 
‘‘(6) TRANSITION
TO
USE
OF
MSAS
AS
FEE 
SCHEDULE AREAS IN CALIFORNIA.— 
‘‘(A) IN GENERAL.— 
‘‘(i) REVISION.—Subject to clause (ii) 
and notwithstanding the previous provi-
sions of this subsection, for services fur-
417 
nished on or after January 1, 2011, the 
Secretary shall revise the fee schedule 
areas used for payment under this section 
applicable to the State of California using 
the Metropolitan Statistical Area (MSA) 
iterative Geographic Adjustment Factor 
methodology as follows: 
‘‘(I) The Secretary shall con-
figure the physician fee schedule areas 
using the Metropolitan Statistical 
Areas (each in this paragraph referred 
to as an ‘MSA’), as defined by the Di-
rector of the Office of Management 
and Budget and published in the Fed-
eral Register, using the most recent 
available decennial population data as 
of the date of the enactment of the 
Affordable Health Care for America 
Act, as the basis for the fee schedule 
areas. 
‘‘(II) For purposes of this clause, 
the Secretary shall treat all areas not 
included in an MSA as a single rest of 
the State MSA.