H. R. 4302 
One Hundred Thirteenth Congress 
of the 
United States of America 
AT THE SECOND SESSION 
Begun and held at the City of Washington on Friday, 
the third day of January, two thousand and fourteen 
An Act 
To amend the Social Security Act to extend Medicare payments to physicians 
and other provisions of the Medicare and Medicaid programs, and for other purposes. 
Be it enacted by the Senate and House of Representatives of 
the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the ‘‘Protecting 
Access to Medicare Act of 2014’’. 
(b) TABLE OF CONTENTS.—The table of contents of this Act 
is as follows: 
Sec. 1. Short title; table of contents. 
TITLE I—MEDICARE EXTENDERS 
Sec. 101. Physician payment update. 
Sec. 102. Extension of work GPCI floor. 
Sec. 103. Extension of therapy cap exceptions process. 
Sec. 104. Extension of ambulance add-ons. 
Sec. 105. Extension of increased inpatient hospital payment adjustment for certain 
low-volume hospitals. 
Sec. 106. Extension of the Medicare-dependent hospital (MDH) program. 
Sec. 107. Extension for specialized Medicare Advantage plans for special needs in-
dividuals. 
Sec. 108. Extension of Medicare reasonable cost contracts. 
Sec. 109. Extension of funding for quality measure endorsement, input, and selec-
tion. 
Sec. 110. Extension of funding outreach and assistance for low-income programs. 
Sec. 111. Extension of two-midnight rule. 
Sec. 112. Technical changes to Medicare LTCH amendments. 
TITLE II—OTHER HEALTH PROVISIONS 
Sec. 201. Extension of the qualifying individual (QI) program. 
Sec. 202. Temporary extension of transitional medical assistance (TMA). 
Sec. 203. Extension of Medicaid and CHIP express lane option. 
Sec. 204. Extension of special diabetes program for type I diabetes and for Indians. 
Sec. 205. Extension of abstinence education. 
Sec. 206. Extension of personal responsibility education program (PREP). 
Sec. 207. Extension of funding for family-to-family health information centers. 
Sec. 208. Extension of health workforce demonstration project for low-income indi-
viduals. 
Sec. 209. Extension of maternal, infant, and early childhood home visiting pro-
grams. 
Sec. 210. Pediatric quality measures. 
Sec. 211. Delay of effective date for Medicaid amendments relating to beneficiary 
liability settlements. 
Sec. 212. Delay in transition from ICD–9 to ICD–10 code sets. 
Sec. 213. Elimination of limitation on deductibles for employer-sponsored health 
plans. 
Sec. 214. GAO report on the Children’s Hospital Graduate Medical Education Pro-
gram. 
Sec. 215. Skilled nursing facility value-based purchasing. 
Sec. 216. Improving Medicare policies for clinical diagnostic laboratory tests.
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Sec. 217. Revisions under the Medicare ESRD prospective payment system. 
Sec. 218. Quality incentives for computed tomography diagnostic imaging and pro-
moting evidence-based care. 
Sec. 219. Using funding from Transitional Fund for Sustainable Growth Rate 
(SGR) Reform. 
Sec. 220. Ensuring accurate valuation of services under the physician fee schedule. 
Sec. 221. Medicaid DSH. 
Sec. 222. Realignment of the Medicare sequester for fiscal year 2024. 
Sec. 223. Demonstration programs to improve community mental health services. 
Sec. 224. Assisted outpatient treatment grant program for individuals with serious 
mental illness. 
Sec. 225. Exclusion from PAYGO scorecards. 
TITLE I—MEDICARE EXTENDERS 
SEC. 101. PHYSICIAN PAYMENT UPDATE. 
Section 1848(d) of the Social Security Act (42 U.S.C. 1395w– 
4(d)) is amended— 
(1) in paragraph (15)— 
(A) in the heading, by striking ‘‘JANUARY THROUGH 
MARCH OF’’; 
(B) in subparagraph (A), by striking ‘‘for the period 
beginning on January 1, 2014, and ending on March 31, 
2014’’; and 
(C) in subparagraph (B)— 
(i) in the heading, by striking ‘‘REMAINING PORTION 
OF 2014 AND’’; and 
(ii) by striking ‘‘the period beginning on April 1, 
2014, and ending on December 31, 2014, and for’’; 
and 
(2) by adding at the end the following new paragraph: 
‘‘(16) UPDATE
FOR
JANUARY
THROUGH
MARCH
OF
2015.— 
‘‘(A) IN GENERAL.—Subject to paragraphs (7)(B), (8)(B), 
(9)(B), (10)(B), (11)(B), (12)(B), (13)(B), (14)(B), and (15)(B), 
in lieu of the update to the single conversion factor estab-
lished in paragraph (1)(C) that would otherwise apply for 
2015 for the period beginning on January 1, 2015, and 
ending on March 31, 2015, the update to the single conver-
sion factor shall be 0.0 percent. 
‘‘(B) NO
EFFECT
ON
COMPUTATION
OF
CONVERSION 
FACTOR FOR REMAINING PORTION OF 2015 AND SUBSEQUENT 
YEARS.—The conversion factor under this subsection shall 
be computed under paragraph (1)(A) for the period begin-
ning on April 1, 2015, and ending on December 31, 2015, 
and for 2016 and subsequent years as if subparagraph 
(A) had never applied.’’. 
SEC. 102. EXTENSION OF WORK GPCI FLOOR. 
Section 1848(e)(1)(E) of the Social Security Act (42 U.S.C. 
1395w–4(e)(1)(E)) is amended by striking ‘‘April 1, 2014’’ and 
inserting ‘‘April 1, 2015’’. 
SEC. 103. EXTENSION OF THERAPY CAP EXCEPTIONS PROCESS. 
Section 1833(g) of the Social Security Act (42 U.S.C. 1395l(g)) 
is amended— 
(1) in paragraph (5)(A), in the first sentence, by striking 
‘‘March 31, 2014’’ and inserting ‘‘March 31, 2015’’; and 
(2) in paragraph (6)(A)— 
(A) by striking ‘‘March 31, 2014’’ and inserting ‘‘March 
31, 2015’’; and
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(B) by striking ‘‘2012, 2013, or the first three months 
of 2014’’ and inserting ‘‘2012, 2013, 2014, or the first three 
months of 2015’’. 
SEC. 104. EXTENSION OF AMBULANCE ADD-ONS. 
(a) GROUND AMBULANCE.—Section 1834(l)(13)(A) of the Social 
Security Act (42 U.S.C. 1395m(l)(13)(A)) is amended by striking 
‘‘April 1, 2014’’ and inserting ‘‘April 1, 2015’’ each place it appears. 
(b) SUPER RURAL GROUND AMBULANCE.—Section 1834(l)(12)(A) 
of the Social Security Act (42 U.S.C. 1395m(l)(12)(A)) is amended, 
in the first sentence, by striking ‘‘April 1, 2014’’ and inserting 
‘‘April 1, 2015’’. 
SEC. 105. EXTENSION OF INCREASED INPATIENT HOSPITAL PAYMENT 
ADJUSTMENT FOR CERTAIN LOW-VOLUME HOSPITALS. 
Section 1886(d)(12) of the Social Security Act (42 U.S.C. 
1395ww(d)(12)) is amended— 
(1) in subparagraph (B), in the matter preceding clause 
(i), by striking ‘‘in the portion of fiscal year 2014 beginning 
on April 1, 2014, fiscal year 2015, and subsequent fiscal years’’ 
and inserting ‘‘in fiscal year 2015 (beginning on April 1, 2015), 
fiscal year 2016, and subsequent fiscal years’’; 
(2) in subparagraph (C)(i), by striking ‘‘fiscal years 2011, 
2012, and 2013, and the portion of fiscal year 2014 before’’ 
and inserting ‘‘fiscal years 2011 through 2014 and fiscal year 
2015 (before April 1, 2015),’’ each place it appears; and 
(3) in subparagraph (D), by striking ‘‘fiscal years 2011, 
2012, and 2013, and the portion of fiscal year 2014 before 
April 1, 2014,’’ and inserting ‘‘fiscal years 2011 through 2014 
and fiscal year 2015 (before April 1, 2015),’’. 
SEC. 106. EXTENSION OF THE MEDICARE-DEPENDENT HOSPITAL (MDH) 
PROGRAM. 
(a) IN GENERAL.—Section 1886(d)(5)(G) of the Social Security 
Act (42 U.S.C. 1395ww(d)(5)(G)) is amended— 
(1) in clause (i), by striking ‘‘April 1, 2014’’ and inserting 
‘‘April 1, 2015’’; and 
(2) in clause (ii)(II), by striking ‘‘April 1, 2014’’ and inserting 
‘‘April 1, 2015’’. 
(b) CONFORMING AMENDMENTS.— 
(1) EXTENSION OF TARGET AMOUNT.—Section 1886(b)(3)(D) 
of the Social Security Act (42 U.S.C. 1395ww(b)(3)(D)) is 
amended— 
(A) in the matter preceding clause (i), by striking ‘‘April 
1, 2014’’ and inserting ‘‘April 1, 2015’’; and 
(B) in clause (iv), by striking ‘‘through fiscal year 2013 
and the portion of fiscal year 2014 before April 1, 2014’’ 
and inserting ‘‘through fiscal year 2014 and the portion 
of fiscal year 2015 before April 1, 2015’’. 
(2) PERMITTING HOSPITALS TO DECLINE RECLASSIFICATION.— 
Section 13501(e)(2) of the Omnibus Budget Reconciliation Act 
of 1993 (42 U.S.C. 1395ww note) is amended by striking 
‘‘through the first 2 quarters of fiscal year 2014’’ and inserting 
‘‘through the first 2 quarters of fiscal year 2015’’.
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SEC. 107. EXTENSION FOR SPECIALIZED MEDICARE ADVANTAGE 
PLANS FOR SPECIAL NEEDS INDIVIDUALS. 
Section 1859(f)(1) of the Social Security Act (42 U.S.C. 1395w– 
28(f)(1)) is amended by striking ‘‘2016’’ and inserting ‘‘2017’’. 
SEC. 108. EXTENSION OF MEDICARE REASONABLE COST CONTRACTS. 
Section 1876(h)(5)(C)(ii) of the Social Security Act (42 U.S.C. 
1395mm(h)(5)(C)(ii)) is amended, in the matter preceding subclause 
(I), by striking ‘‘January 1, 2015’’ and inserting ‘‘January 1, 2016’’. 
SEC. 109. EXTENSION OF FUNDING FOR QUALITY MEASURE ENDORSE-
MENT, INPUT, AND SELECTION. 
Section 1890(d) of the Social Security Act (42 U.S.C. 1395aaa(d)) 
is amended— 
(1) by inserting ‘‘(1)’’ before ‘‘For purposes’’; and 
(2) by adding at the end the following new paragraph: 
‘‘(2) For purposes of carrying out this section and section 1890A 
(other than subsections (e) and (f)), the Secretary shall provide 
for the transfer, from the Federal Hospital Insurance Trust Fund 
under section 1817 and the Federal Supplementary Medical Insur-
ance Trust Fund under section 1841, in such proportion as the 
Secretary determines appropriate, to the Centers for Medicare & 
Medicaid Services Program Management Account of $5,000,000 for 
fiscal year 2014 and $15,000,000 for the first 6 months of fiscal 
year 2015. Amounts transferred under the preceding sentence shall 
remain available until expended.’’. 
SEC. 110. EXTENSION OF FUNDING OUTREACH AND ASSISTANCE FOR 
LOW-INCOME PROGRAMS. 
(a) ADDITIONAL FUNDING FOR STATE HEALTH INSURANCE PRO-
GRAMS.—Subsection (a)(1)(B) of section 119 of the Medicare 
Improvements for Patients and Providers Act of 2008 (42 U.S.C. 
1395b–3 note), as amended by section 3306 of the Patient Protection 
and Affordable Care Act Public Law 111–148), section 610 of the 
American Taxpayer Relief Act of 2012 (Public Law 112–240), and 
section 1110 of the Pathway for SGR Reform Act of 2013 (Public 
Law 113–67), is amended— 
(1) in clause (iii), by striking ‘‘and’’ at the end; 
(2) by striking clause (iv); and 
(3) by adding at the end the following new clauses: 
‘‘(iv) for fiscal year 2014, of $7,500,000; and 
‘‘(v) for the portion of fiscal year 2015 before April 
1, 2015, of $3,750,000.’’. 
(b) ADDITIONAL FUNDING
FOR AREA AGENCIES
ON AGING.— 
Subsection (b)(1)(B) of such section 119, as so amended, is 
amended— 
(1) in clause (iii), by striking ‘‘and’’ at the end; 
(2) by striking clause (iv); and 
(3) by inserting after clause (iii) the following new clauses: 
‘‘(iv) for fiscal year 2014, of $7,500,000; and 
‘‘(v) for the portion of fiscal year 2015 before April 
1, 2015, of $3,750,000.’’. 
(c) ADDITIONAL FUNDING FOR AGING AND DISABILITY RESOURCE 
CENTERS.—Subsection (c)(1)(B) of such section 119, as so amended, 
is amended— 
(1) in clause (iii), by striking ‘‘and’’ at the end; 
(2) by striking clause (iv); and 
(3) by inserting after clause (iii) the following new clauses:
H. R. 4302—5 
‘‘(iv) for fiscal year 2014, of $5,000,000; and 
‘‘(v) for the portion of fiscal year 2015 before April 
1, 2015, of $2,500,000.’’. 
(d) ADDITIONAL FUNDING FOR CONTRACT WITH THE NATIONAL 
CENTER FOR BENEFITS AND OUTREACH ENROLLMENT.—Subsection 
(d)(2) of such section 119, as so amended, is amended— 
(1) in clause (iii), by striking ‘‘and’’ at the end; 
(2) by striking clause (iv); and 
(3) by inserting after clause (iii) the following new clauses: 
‘‘(iv) for fiscal year 2014, of $5,000,000; and 
‘‘(v) for the portion of fiscal year 2015 before April 
1, 2015, of $2,500,000.’’. 
SEC. 111. EXTENSION OF TWO-MIDNIGHT RULE. 
(a) CONTINUATION OF CERTAIN MEDICAL REVIEW ACTIVITIES.— 
The Secretary of Health and Human Services may continue medical 
review activities described in the notice entitled ‘‘Selecting Hospital 
Claims for Patient Status Reviews: Admissions On or After October 
1, 2013’’, posted on the Internet website of the Centers for Medicare 
& Medicaid Services, through the first 6 months of fiscal year 
2015 for such additional hospital claims as the Secretary determines 
appropriate. 
(b) LIMITATION.—The Secretary of Health and Human Services 
shall not conduct patient status reviews (as described in such notice) 
on a post-payment review basis through recovery audit contractors 
under section 1893(h) of the Social Security Act (42 U.S.C. 
1395ddd(h)) for inpatient claims with dates of admission October 
1, 2013, through March 31, 2015, unless there is evidence of system-
atic gaming, fraud, abuse, or delays in the provision of care by 
a provider of services (as defined in section 1861(u) of such Act 
(42 U.S.C. 1395x(u))). 
SEC. 112. TECHNICAL CHANGES TO MEDICARE LTCH AMENDMENTS. 
(a) 
IN
GENERAL.—Subclauses 
(I) 
and 
(II) 
of 
section 
1886(m)(6)(C)(iv) 
of 
the 
Social 
Security 
Act 
(42 
U.S.C. 
1395ww(m)(6)(C)(iv)) are each amended by striking ‘‘discharges’’ 
and inserting ‘‘Medicare fee-for-service discharges’’. 
(b) MMSEA CORRECTION.—Section 114(d) of the Medicare, Med-
icaid, and SCHIP Extension Act of 2007 (42 U.S.C. 1395ww note), 
as amended by sections 3106(b) and 10312(b) of Public Law 111– 
148 and by section 1206(b)(2) of the Pathway for SGR Reform 
Act of 2013 (division B of Public Law 113–67), is amended— 
(1) in paragraph (1), in the matter preceding subparagraph 
(A), by striking ‘‘January 1, 2015,’’ and inserting ‘‘on the date 
of the enactment of paragraph (7) of this subsection’’; 
(2) in paragraph (6), by striking ‘‘January 1, 2015,’’ and 
inserting ‘‘on the date of the enactment of paragraph (7) of 
this subsection’’; and 
(3) by adding at the end the following new paragraph: 
‘‘(7) ADDITIONAL EXCEPTION FOR CERTAIN LONG-TERM CARE 
HOSPITALS.—The moratorium under paragraph (1)(A) shall not 
apply to a long-term care hospital that— 
‘‘(A) began its qualifying period for payment as a long- 
term care hospital under section 412.23(e) of title 42, Code 
of Federal Regulations, on or before the date of enactment 
of this paragraph;
H. R. 4302—6 
‘‘(B) has a binding written agreement as of the date 
of the enactment of this paragraph with an outside, unre-
lated party for the actual construction, renovation, lease, 
or demolition for a long-term care hospital, and has 
expended, before such date of enactment, at least 10 per-
cent 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 ‘‘Assessment’’ 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. 
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 ‘‘Sep-
tember 30, 2014’’; and 
(ii) by striking ‘‘$200,000,000.’’ and inserting 
‘‘$485,000,000;’’; and 
(C) by adding at the end the following new subpara-
graphs: 
‘‘(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 
‘‘(W) for the period that begins on January 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 inserting ‘‘(T), or (V)’’.
H. R. 4302—7 
SEC. 202. TEMPORARY EXTENSION OF TRANSITIONAL MEDICAL 
ASSISTANCE (TMA). 
Sections 1902(e)(1)(B) and 1925(f) of the Social Security 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 ‘‘September 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 DIABETES.—Sec-
tion 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 (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 striking ‘‘2014’’ and 
inserting ‘‘2015’’. 
SEC. 206. EXTENSION OF PERSONAL RESPONSIBILITY EDUCATION 
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 subsection (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 
(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 DEMONSTRATION 
PROJECT FOR LOW-INCOME INDIVIDUALS. 
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)—
H. R. 4302—8 
(A) by striking ‘‘and’’ at the end of subparagraph (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 subpara-
graph: 
‘‘(F) for the period beginning on October 1, 2014, and 
ending on March 31, 2015, an amount equal to the amount 
provided in subparagraph (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 MEAS-
URES 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 
appropriated 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 aggregate amount awarded by the Secretary for grants and 
contracts 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)’’. 
SEC. 211. DELAY OF EFFECTIVE DATE FOR MEDICAID AMENDMENTS 
RELATING TO BENEFICIARY LIABILITY SETTLEMENTS. 
Effective as if included in the enactment of the Bipartisan 
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 Regula-
tions. 
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 ‘‘paragraphs (1)(B)(i) 
and (2)(B)(i)’’ and inserting ‘‘paragraph (1)(B)(i)’’. 
(b) CONFORMING AMENDMENT.—Section 2707(b) of the Public 
Health Service Act (42 U.S.C. 300gg–6(b)) is amended by striking 
‘‘paragraphs (1) and (2)’’ and inserting ‘‘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).
H. R. 4302—9 
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 enacted into law, the Comp-
troller 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 
implementation 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 respect 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. 
(2) The number and type of such hospitals receiving such 
payments. 
(3) The amount of such payments awarded to such hos-
pitals. 
(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 PURCHASING. 
(a) IN GENERAL.—Section 1888 of the Social Security 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 readmission measure (or any suc-
cessor to such a measure). 
‘‘(2) RESOURCE USE MEASURE.—Not later than October 1, 
2016, the Secretary shall specify a measure to reflect an all- 
condition 
risk-adjusted 
potentially 
preventable 
hospital 
readmission rate for skilled nursing facilities. 
‘‘(3) MEASURE ADJUSTMENTS.—When specifying the meas-
ures 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 
readmissions. 
‘‘(4) PRE-RULEMAKING PROCESS (MEASURE APPLICATION PART-
NERSHIP PROCESS).—The application of the provisions of section 
1890A shall be optional in the case of a measure specified 
under paragraph (1) and a measure specified under paragraph 
(2). 
‘‘(5) FEEDBACK REPORTS TO SKILLED NURSING FACILITIES.— 
Beginning October 1, 2016, and every quarter thereafter, the 
Secretary shall provide confidential feedback reports to skilled 
nursing facilities on the performance of such facilities with 
respect to a measure specified under paragraph (1) or (2). 
‘‘(6) PUBLIC REPORTING OF SKILLED NURSING FACILITIES.— 
‘‘(A) IN GENERAL.—Subject to subparagraphs (B) and 
(C), the Secretary shall establish procedures for making 
available to the public by posting on the Nursing Home
H. R. 4302—10 
Compare Medicare website (or a successor website) 
described in section 1819(i) information on the performance 
of skilled nursing facilities with respect to a measure speci-
fied under paragraph (1) and a measure specified under 
paragraph (2). 
‘‘(B) OPPORTUNITY TO REVIEW.—The procedures under 
subparagraph (A) shall ensure that a skilled nursing 
facility has the opportunity to review and submit correc-
tions to the information that is to be made public with 
respect to the facility prior to such information being made 
public. 
‘‘(C) TIMING.—Such procedures shall provide that the 
information described in subparagraph (A) is made publicly 
available beginning not later than October 1, 2017. 
‘‘(7) NON-APPLICATION
OF
PAPERWORK
REDUCTION
ACT.— 
Chapter 35 of title 44, United States Code (commonly referred 
to as the ‘Paperwork Reduction Act of 1995’) shall not apply 
to this subsection.’’. 
(b) VALUE-BASED PURCHASING PROGRAM FOR SKILLED NURSING 
FACILITIES.—Section 1888 of the Social Security Act (42 U.S.C. 
1395yy), as amended by subsection (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 succeeding provisions 
of this subsection, the Secretary shall establish a skilled 
nursing facility value-based purchasing program (in this 
subsection referred to as the ‘SNF VBP Program’) under 
which value-based incentive payments are made in a fiscal 
year to skilled nursing facilities. 
‘‘(B) PROGRAM
TO
BEGIN
IN
FISCAL
YEAR
2019.—The 
SNF VBP Program shall apply to payments for services 
furnished on or after October 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 the measure specified under (g)(1) 
as soon as practicable. 
‘‘(3) PERFORMANCE STANDARDS.— 
‘‘(A) ESTABLISHMENT.—The Secretary shall establish 
performance standards with respect to the measure applied 
under paragraph (2) for a performance period for a fiscal 
year. 
‘‘(B) HIGHER
OF
ACHIEVEMENT
AND
IMPROVEMENT.— 
The performance standards established under subpara-
graph (A) shall include levels of achievement and improve-
ment. In calculating the SNF performance score under 
paragraph (4), the Secretary shall use the higher of either 
improvement or achievement. 
‘‘(C) TIMING.—The Secretary shall establish and 
announce the performance standards established under 
subparagraph (A) not later than 60 days prior to the begin-
ning of the performance period for the fiscal year involved.
H. R. 4302—11 
‘‘(4) SNF PERFORMANCE SCORE.— 
‘‘(A) IN GENERAL.—The Secretary shall develop a meth-
odology for assessing the total performance of each skilled 
nursing facility based on performance standards estab-
lished under paragraph (3) with respect to the measure 
applied under paragraph (2). Using such methodology, the 
Secretary shall provide for an assessment (in this sub-
section referred to as the ‘SNF performance score’) for 
each skilled nursing facility for each such performance 
period. 
‘‘(B) RANKING OF SNF PERFORMANCE SCORES.—The Sec-
retary shall, for the performance period for each fiscal 
year, rank the SNF performance scores determined under 
subparagraph (A) from low to high. 
‘‘(5) CALCULATION OF VALUE-BASED INCENTIVE PAYMENTS.— 
‘‘(A) IN GENERAL.—With respect to a skilled nursing 
facility, based on the ranking under paragraph (4)(B) for 
a performance period for a fiscal year, the Secretary shall 
increase the adjusted Federal per diem rate determined 
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 amount for services fur-
nished by a skilled nursing 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 payment percentage 
specified under subparagraph (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 payment percentage for a skilled 
nursing facility for a fiscal year which may include 
a zero percentage. 
‘‘(ii) REQUIREMENTS.—In specifying the value- 
based incentive payment percentage for each skilled 
nursing facility for a fiscal year under clause (i), the 
Secretary shall ensure that— 
‘‘(I) such percentage is based on the SNF 
performance score of the skilled nursing facility 
provided under paragraph (4) for the performance 
period for such fiscal year; 
‘‘(II) the application of all such percentages 
in such fiscal year results in an appropriate dis-
tribution of value-based incentive payments under 
subparagraph (B) such that— 
‘‘(aa) skilled nursing facilities with the 
highest rankings under paragraph (4)(B) 
receive the highest value-based incentive pay-
ment amounts under subparagraph (B);
H. R. 4302—12 
‘‘(bb) skilled nursing facilities with the 
lowest 
rankings 
under 
paragraph 
(4)(B) 
receive the lowest value-based incentive pay-
ment amounts under subparagraph (B); and 
‘‘(cc) in the case of skilled nursing facilities 
in the lowest 40 percent of the ranking under 
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 application 
of this subsection; and 
‘‘(III) the total amount of value-based incentive 
payments under this paragraph for all skilled 
nursing facilities 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 reduc-
tions to payments for such fiscal year under para-
graph (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 determined under sub-
section (e)(4)(G) otherwise applicable to a skilled nursing 
facility for services 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 incentive 
payment under paragraph (5) for such fiscal year. 
‘‘(B) APPLICABLE PERCENT.—For purposes of subpara-
graph (A), the term ‘applicable percent’ means, with respect 
to fiscal year 2019 and succeeding fiscal years, 2 percent. 
‘‘(7) ANNOUNCEMENT OF NET RESULT OF ADJUSTMENTS.— 
Under the SNF VBP Program, the Secretary shall, not later 
than 60 days prior to the fiscal year involved, inform each 
skilled nursing facility 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 the fiscal year involved, and the Secretary shall 
not take into account such value-based incentive payment or 
payment reduction in making payments to a skilled nursing 
facility under this section in a subsequent fiscal year. 
‘‘(9) PUBLIC REPORTING.— 
‘‘(A) SNF SPECIFIC INFORMATION.—The Secretary shall 
make available to the public, by posting on the Nursing 
Home Compare Medicare website (or a successor website) 
described in section 1819(i) in an easily understandable 
format, information regarding the performance of indi-
vidual skilled nursing facilities under the SNF VBP Pro-
gram, with respect to a fiscal year, including—
H. R. 4302—13 
‘‘(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 successor website) described in section 1819(i) 
aggregate 
information 
on 
the 
SNF 
VBP 
Program, 
including— 
‘‘(i) the range of SNF performance scores provided 
under paragraph (4)(A); and 
‘‘(ii) the number of skilled nursing facilities 
receiving value-based incentive payments under para-
graph (5) and the range and total amount of such 
value-based incentive payments. 
‘‘(10) LIMITATION ON REVIEW.—There shall be no adminis-
trative or judicial review under section 1869, section 1878, 
or otherwise of the following: 
‘‘(A) The methodology used to determine the value- 
based incentive payment percentage and the amount of 
the value-based incentive payment under paragraph (5). 
‘‘(B) The determination of the amount of funding avail-
able for such value-based incentive payments under para-
graph (5)(C)(ii)(III) and the payment reduction under para-
graph (6). 
‘‘(C) The establishment of the performance standards 
under paragraph (3) and the performance period. 
‘‘(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 MANAGEMENT.—The Secretary 
shall provide for the one time transfer from the Federal Hos-
pital Insurance Trust Fund established under section 1817 
to the Centers for Medicare & Medicaid Services Program 
Management 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 Medi-
care Payment Advisory Commission shall submit to Congress a 
report that reviews the progress of the skilled nursing facility 
value-based purchasing program established under section 1888(h) 
of the Social Security Act, as added by subsection (b), and makes 
recommendations, as appropriate, on any improvements that should 
be made to such program. For purposes of the previous sentence, 
the Medicare Payment Advisory Commission shall consider any 
unintended consequences with respect to such skilled nursing 
facility value-based purchasing program and any potential adjust-
ments to the readmission measure specified under section 1888(g)(1) 
of such Act, as added by subsection (a), for purposes of determining 
the effect of the socio-economic status of a beneficiary under the 
Medicare program under title XVIII of the Social Security Act
H. R. 4302—14 
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 DIAGNOSTIC LAB-
ORATORY 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 diagnostic laboratory test, as defined 
in subsection (d)(5)), an applicable laboratory (as defined in 
paragraph (2)) shall report to the Secretary, at a time specified 
by the Secretary, applicable information (as defined in para-
graph (3)) for a data collection period (as defined in paragraph 
(4)) for each clinical diagnostic laboratory test that the labora-
tory furnishes during such period for which payment is made 
under this part. 
‘‘(2) DEFINITION OF APPLICABLE LABORATORY.—In this sec-
tion, the term ‘applicable laboratory’ means a laboratory that, 
with respect to its revenues under this title, a majority of 
such revenues are from this section, section 1833(h), or section 
1848. The Secretary may establish a low volume or low expendi-
ture threshold for excluding a laboratory from the definition 
of applicable laboratory under this paragraph, as the Secretary 
determines appropriate. 
‘‘(3) APPLICABLE INFORMATION DEFINED.— 
‘‘(A) IN GENERAL.—In this section, subject to subpara-
graph (B), the term ‘applicable information’ means, with 
respect to a laboratory test for a data collection period, 
the following: 
‘‘(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 CONTRACTUAL ARRANGE-
MENTS.—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 period, specified by the Secretary. 
‘‘(5) 
TREATMENT
OF
DISCOUNTS.—The 
payment 
rate 
reported by a laboratory under this subsection shall reflect 
all discounts, rebates, coupons, and other price concessions, 
including those described 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 different payors for the same test, the applicable labora-
tory shall report each such payment rate and the volume for
H. R. 4302—15 
the test at each such rate under this subsection. Beginning 
with January 1, 2019, the Secretary may establish rules to 
aggregate reporting with respect to the situations described 
in the preceding sentence. 
‘‘(7) CERTIFICATION.—An officer of the laboratory shall cer-
tify the accuracy and completeness of the information reported 
under this subsection. 
‘‘(8) PRIVATE PAYOR DEFINED.—In this section, 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 organization (as defined 
in section 1903(m)). 
‘‘(9) CIVIL MONEY PENALTY.— 
‘‘(A) IN GENERAL.—If the Secretary determines that 
an applicable laboratory has failed to report or made a 
misrepresentation or omission in reporting information 
under this subsection with respect to a clinical diagnostic 
laboratory 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 omis-
sion. 
‘‘(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, information disclosed by a laboratory 
under this subsection is confidential and shall not be disclosed 
by the Secretary or a Medicare contractor in a form that dis-
closes the identity of a specific payor or laboratory, 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 Congressional Budget 
Office to review the information provided; and 
‘‘(D) to permit the Medicare Payment Advisory 
Commission to review the information provided. 
‘‘(11) PROTECTION FROM PUBLIC DISCLOSURE.—A payor shall 
not be identified on information 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 rule-
making parameters for data collection under this subsection. 
‘‘(b) PAYMENT FOR CLINICAL DIAGNOSTIC LABORATORY TESTS.— 
‘‘(1) USE OF PRIVATE PAYOR RATE INFORMATION TO DETER-
MINE MEDICARE PAYMENT RATES.— 
‘‘(A) IN GENERAL.—Subject to paragraph (3) and sub-
sections (c) and (d), in the case of a clinical diagnostic 
laboratory test furnished on or after January 1, 2017, the
H. R. 4302—16 
payment amount under this section shall be equal to the 
weighted median determined for the test under paragraph 
(2) for the most recent data collection period. 
‘‘(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 bundled payment under 
section 1833(t). 
‘‘(2) CALCULATION OF WEIGHTED MEDIAN.—For each labora-
tory test with respect to which information 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 reported for 
the period for each test weighted by volume for each payor 
and each laboratory. 
‘‘(3) PHASE-IN OF REDUCTIONS FROM PRIVATE PAYOR RATE 
IMPLEMENTATION.— 
‘‘(A) IN
GENERAL.—Payment amounts determined 
under this subsection for a clinical diagnostic 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 amount of payment 
for the test for the preceding year. 
‘‘(B) APPLICABLE
PERCENT
DEFINED.—In this para-
graph, 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 either 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 estab-
lished 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 APPLICABLE.—The pay-
ment amounts under this section shall not be subject to 
any adjustment (including any geographic adjustment, 
budget neutrality adjustment, annual update, or other 
adjustment). 
‘‘(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 otherwise apply under section 1833(h)(3)(A) 
shall be increased by $2. 
‘‘(c) PAYMENT FOR NEW TESTS THAT ARE NOT ADVANCED DIAG-
NOSTIC LABORATORY TESTS.— 
‘‘(1) PAYMENT DURING INITIAL PERIOD.—In the case of a 
clinical diagnostic laboratory test that is assigned a new or
H. R. 4302—17 
substantially revised HCPCS code on or after the date of enact-
ment of this section, and which is not an advanced diagnostic 
laboratory test (as defined in subsection (d)(5)), during an initial 
period until payment rates under subsection (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 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 information to determine gapfill 
amounts, if available: 
‘‘(A) Charges for the test and routine discounts to 
charges. 
‘‘(B) Resources required to perform the test. 
‘‘(C) Payment amounts determined by other payors. 
‘‘(D) Charges, payment amounts, and resources 
required for other tests that may be comparable or other-
wise relevant. 
‘‘(E) Other criteria the Secretary determines appro-
priate. 
‘‘(3) ADDITIONAL CONSIDERATION.—In determining the pay-
ment amount under crosswalking or gapfilling processes under 
this subsection, the Secretary shall consider recommendations 
from the panel established under subsection (f)(1). 
‘‘(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 explanation 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 advanced diag-
nostic laboratory test for which payment has not been 
made under the fee schedule under section 1833(h) prior 
to the date of enactment 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 purposes of subpara-
graph (A), the term ‘actual list charge’, with respect to 
a laboratory test furnished during such period, means the 
publicly available rate on the first day at which the test 
is available for purchase by a private payor. 
‘‘(2) SPECIAL
RULE
FOR
TIMING
OF
INITIAL
REPORTING.— 
With respect to an advanced diagnostic 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.
H. R. 4302—18 
‘‘(3) APPLICATION OF MARKET RATES AFTER INITIAL PERIOD.— 
Subject to paragraph (4), data reported under paragraph (2) 
shall be used to establish 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 collection 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 payment amount for the 
test established using the methodology described in subsection 
(b) that is applicable 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 ‘advanced 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 combined with a unique algo-
rithm 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 tem-
porary HCPCS codes to identify new advanced diagnostic 
laboratory tests (as defined 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 tem-
porary code shall be effective until a permanent 
HCPCS code is established (but not to exceed 2 years). 
‘‘(ii) EXCEPTION.—The Secretary may extend the 
temporary code or establish a permanent HCPCS code, 
as the Secretary determines appropriate. 
‘‘(2) EXISTING TESTS.—Not later than January 1, 2016, for 
each existing advanced diagnostic laboratory 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 already been 
assigned a unique HCPCS code, the Secretary shall— 
‘‘(A) assign a unique HCPCS code for the test; and 
‘‘(B) publicly report the payment rate for the test. 
‘‘(3) ESTABLISHMENT OF UNIQUE IDENTIFIER FOR CERTAIN 
TESTS.—For purposes of tracking and monitoring, if a laboratory 
or a manufacturer requests a unique identifier for an advanced
H. R. 4302—19 
diagnostic laboratory test (as so defined) or a laboratory test 
that is cleared or approved by the Food and Drug Administra-
tion, 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 EXPERTS.— 
‘‘(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 selec-
tion of individuals with expertise, which may include molecular 
pathologists, researchers, and individuals with expertise in lab-
oratory science or health economics, in issues related to clinical 
diagnostic laboratory tests, which may include the development, 
validation, performance, and application of such tests, to pro-
vide— 
‘‘(A) input on— 
‘‘(i) the establishment of payment rates under this 
section for new clinical diagnostic laboratory tests, 
including whether to use crosswalking or gapfilling 
processes to determine payment for a specific new test; 
and 
‘‘(ii) the factors used in determining coverage and 
payment processes for new clinical diagnostic labora-
tory tests; and 
‘‘(B) recommendations to the Secretary under this sec-
tion. 
‘‘(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 described 
in such section on the establishment of payment amounts under 
this section. 
‘‘(g) COVERAGE.— 
‘‘(1) ISSUANCE OF COVERAGE POLICIES.— 
‘‘(A) IN
GENERAL.—A medicare administrative con-
tractor shall only issue a coverage policy with respect to 
a clinical diagnostic laboratory test in accordance with 
the process for making a local coverage determination (as 
defined 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 
regulations). 
‘‘(B) NO EFFECT ON NATIONAL COVERAGE DETERMINA-
TION
PROCESS.—This paragraph shall not apply to the 
national coverage determination process (as defined in sec-
tion 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 ADMINISTRA-
TIVE
CONTRACTORS
FOR
CLINICAL
DIAGNOSTIC
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 process claims
H. R. 4302—20 
for payment for clinical diagnostic laboratory tests, as deter-
mined appropriate by the Secretary. 
‘‘(h) IMPLEMENTATION.— 
‘‘(1) IMPLEMENTATION.—There shall be no administrative 
or judicial review under section 1869, section 1878, or other-
wise, 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 remain available until expended. 
‘‘(i) TRANSITIONAL RULE.—During the period beginning on the 
date of enactment of this section and ending on December 31, 
2016, with respect to advanced diagnostic 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 enact-
ment, which may include cross-walking or gapfilling methods.’’. 
(b) CONFORMING AMENDMENTS.— 
(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 percent 
(or 100 percent, in the case of such tests for which 
payment is made on an assignment-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’’; 
(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 percent 
(or 100 percent, in the case of such tests for which 
payment is made on an assignment-related basis or 
to a provider having an agreement under section 1866) 
of the lesser of the amount determined under such
H. R. 4302—21 
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 furnished 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 section 1834A, subject to’’; 
(E) in subsection (h)(3), in the matter preceding 
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 sec-
tion’’; 
(F) in subsection (h)(6), by striking ‘‘In the case’’ and 
inserting ‘‘For tests furnished before January 1, 2017, in 
the case’’; and 
(G) in subsection (h)(7), in the first sentence— 
(i) by striking ‘‘and (4)’’ and inserting ‘‘and (4) 
and section 1834A’’; and 
(ii) by striking ‘‘under this subsection’’ 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 coverage determinations for clinical diagnostic labora-
tory tests, see section 1834A(g).’’. 
(c) GAO STUDY
AND
REPORT; MONITORING
OF
MEDICARE 
EXPENDITURES
AND IMPLEMENTATION
OF NEW PAYMENT SYSTEM 
FOR LABORATORY TESTS.— 
(1) GAO STUDY AND REPORT ON IMPLEMENTATION OF NEW 
PAYMENT RATES FOR CLINICAL DIAGNOSTIC 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 
subsection (a). The study shall include an analysis of— 
(i) payment rates paid by private payors for labora-
tory tests furnished in various settings, including— 
(I) how such payment rates compare across 
settings; 
(II) the trend in payment rates over time; 
and 
(III) trends by private payors to move to alter-
native payment methodologies for laboratory tests; 
(ii) the conversion to the new payment rate for 
laboratory tests under such section; 
(iii) the impact of such implementation on bene-
ficiary access under title XVIII of the Social Security 
Act;
H. R. 4302—22 
(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 Proce-
dure Coding System (HCPCS) codes issued for labora-
tory tests; 
(vi) the spending trend for laboratory tests under 
such title; 
(vii) whether the information reported by labora-
tories and the new payment rates for laboratory tests 
under such section accurately reflect market prices; 
(viii) the initial list price for new laboratory tests 
and the subsequent reported rates for such tests under 
such section; 
(ix) changes in the number of advanced diagnostic 
laboratory tests and laboratory tests cleared or 
approved by the Food and Drug Administration for 
which payment is made under such section; and 
(x) healthcare economic information on down-
stream 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 Com-
merce of the House of Representatives and the Committee 
on Finance of the Senate a report on the study under 
subparagraph (A), including recommendations for such 
legislation and administrative action as the Comptroller 
General determines 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 
(B) conduct analyses the Inspector General determines 
appropriate with respect to the implementation 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 PROSPECTIVE PAY-
MENT 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 sentence: ‘‘Not-
withstanding 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 ADJUSTMENT TO ESRD 
BUNDLED PAYMENT RATE TO ACCOUNT FOR CHANGES IN THE UTILI-
ZATION OF CERTAIN DRUGS AND BIOLOGICALS.—
H. R. 4302—23 
(1) IN GENERAL.—Section 1881(b)(14)(I) of the Social Secu-
rity Act (42 U.S.C. 1395rr(b)(14)(I)) 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 ‘‘sub-
clauses (II) and (III)’’; and 
(ii) by adding at the end the following new sen-
tence: ‘‘In order to accomplish the purposes of subpara-
graph (I) with respect to 2016, 2017, and 2018, after 
determining the increase factor described in the pre-
ceding 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 percentage 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 (I) with respect to 
2015, the increase factor described 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 System, Quality 
Incentive Program, and Durable Medical Equipment, Pros-
thetics, Orthotics, and Supplies; Final Rule’ (78 Fed. Reg. 
72156).’’. 
(c) DRUG DESIGNATIONS.—As part of the promulgation of annual 
rule for the Medicare end stage renal disease 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 ‘‘Sec-
retary’’) 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 system. 
(d) QUALITY MEASURES RELATED TO CONDITIONS TREATED BY 
ORAL-ONLY DRUGS UNDER
THE ESRD QUALITY INCENTIVE PRO-
GRAM.—Section 1881(h)(2) of the Social Security Act (42 U.S.C. 
1395rr(h)(2)) is amended— 
(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 following 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 subparagraph: 
‘‘(E) MEASURES SPECIFIC TO THE CONDITIONS TREATED 
WITH ORAL-ONLY DRUGS.— 
‘‘(i) IN GENERAL.—The measures described in this 
subparagraph are measures specified by the Secretary 
that are specific to the conditions treated with oral-
H. R. 4302—24 
only drugs. To the extent feasible, such measures shall 
be outcomes-based measures. 
‘‘(ii) CONSULTATION.—In specifying the measures 
under clause (i), the Secretary shall consult with 
interested stakeholders. 
‘‘(iii) USE OF ENDORSED MEASURES.— 
‘‘(I) IN GENERAL.—Subject to subclause (I), any 
measures specified under clause (i) must have been 
endorsed by the entity with a contract under sec-
tion 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 deter-
mines 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 REC-
OMMENDED BY MEDPAC.— 
(1) IN
GENERAL.—The Secretary of Health and Human 
Services shall conduct audits of Medicare cost reports beginning 
during 2012 for a representative 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 Federal Supplementary Medical Insur-
ance 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 transferred under 
this paragraph for a fiscal year shall be available until 
expended. 
SEC. 218. QUALITY INCENTIVES FOR COMPUTED TOMOGRAPHY DIAG-
NOSTIC IMAGING AND PROMOTING EVIDENCE-BASED 
CARE. 
(a) QUALITY INCENTIVES TO PROMOTE PATIENT SAFETY
AND 
PUBLIC HEALTH IN COMPUTED TOMOGRAPHY DIAGNOSTIC IMAGING.— 
(1) IN GENERAL.—Section 1834 of the Social Security Act 
(42 U.S.C. 1395m) is amended by adding at the end the fol-
lowing new subsection: 
‘‘(p) QUALITY INCENTIVES TO PROMOTE PATIENT SAFETY AND 
PUBLIC HEALTH IN COMPUTED TOMOGRAPHY.— 
‘‘(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 paragraph (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
H. R. 4302—25 
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 suc-
ceeding codes). 
‘‘(3) APPLICABLE PAYMENT SYSTEM DEFINED.—In this sub-
section, the term ‘applicable payment system’ means the fol-
lowing: 
‘‘(A) The technical component and the technical compo-
nent of the global fee under the fee schedule established 
under section 1848(b). 
‘‘(B) The prospective payment system for hospital out-
patient department services under section 1833(t). 
‘‘(4) CONSISTENCY WITH CT EQUIPMENT STANDARD.—In this 
subsection, the term ‘not consistent with the CT equipment 
standard’ means, with respect to an applicable computed tomog-
raphy service, that the service was furnished using equipment 
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 Optimization and Management’. Through rule-
making, 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 attested to by a supplier and 
a hospital outpatient department that indicates whether 
an applicable computed tomography service was furnished 
that was not consistent with the CT equipment standard 
(described in paragraph (4)). Such information may be 
included on a claim and may be a modifier. Such informa-
tion shall be verified, as appropriate, as part of the periodic 
accreditation of suppliers under section 1834(e) and hos-
pitals 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 OUT-
PATIENT
DEPARTMENT
SERVICES.—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 QUALITY INCENTIVES FOR COM-
PUTED TOMOGRAPHY.—The Secretary shall not take into account 
the reduced expenditures that result from the application of 
section 1834(p) in making any budget neutrality adjustments 
this subsection.’’. 
(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 sub-
clause: 
‘‘(VIII) REDUCED EXPENDITURES ATTRIBUTABLE 
TO APPLICATION OF QUALITY INCENTIVES FOR COM-
PUTED TOMOGRAPHY.—Effective for fee schedules
H. R. 4302—26 
established beginning with 2016, reduced expendi-
tures attributable to the application of the quality 
incentives for computed tomography 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 pro-
gram to promote the use of appropriate use criteria (as 
defined in subparagraph (B)) for applicable imaging serv-
ices (as 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 DEFINED.—In this sub-
section, the term ‘appropriate use criteria’ means criteria, 
only developed or endorsed by national professional medical 
specialty societies or other provider-led entities, to assist 
ordering professionals and furnishing professionals in 
making the most appropriate treatment decision for a spe-
cific clinical condition for an individual. To the extent fea-
sible, such criteria shall be evidence-based. 
‘‘(C) APPLICABLE IMAGING SERVICE DEFINED.—In this 
subsection, the term ‘applicable imaging service’ means 
an advanced diagnostic imaging service (as defined in sub-
section (e)(1)(B)) for which the Secretary determines— 
‘‘(i) one or more applicable appropriate use criteria 
specified under paragraph (2) apply; 
‘‘(ii) there are one or more qualified clinical deci-
sion 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 
department), an ambulatory surgical center, and any other 
provider-led outpatient setting determined appropriate by 
the Secretary. 
‘‘(E) ORDERING PROFESSIONAL DEFINED.—In this sub-
section, 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 applicable imaging 
service. 
‘‘(F) FURNISHING PROFESSIONAL DEFINED.—In this sub-
section, the term ‘furnishing professional’ means a physi-
cian (as defined in section 1861(r)) or a practitioner 
described in section 1842(b)(18)(C) who furnishes an 
applicable imaging service. 
‘‘(2) ESTABLISHMENT OF APPLICABLE APPROPRIATE USE CRI-
TERIA.—
H. R. 4302—27 
‘‘(A) IN GENERAL.—Not later than November 15, 2015, 
the Secretary shall through rulemaking, and in consulta-
tion with physicians, 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 spe-
cialty societies or other provider-led entities. 
‘‘(B) CONSIDERATIONS.—In specifying applicable appro-
priate use criteria under subparagraph (A), the Secretary 
shall take into account whether the criteria— 
‘‘(i) have stakeholder consensus; 
‘‘(ii) are scientifically valid and evidence based; 
and 
‘‘(iii) are based on studies that are published and 
reviewable by stakeholders. 
‘‘(C) REVISIONS.—The Secretary shall review, on an 
annual basis, the specified applicable appropriate use cri-
teria to determine if there is a need to update or revise 
(as appropriate) such specification of applicable appropriate 
use criteria and make such updates or revisions through 
rulemaking. 
‘‘(D) TREATMENT OF MULTIPLE APPLICABLE APPROPRIATE 
USE CRITERIA.—In the case where the Secretary determines 
that more than one appropriate use criterion applies with 
respect to an applicable imaging service, the Secretary 
shall apply one or more applicable appropriate 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 support mechanisms that 
could be used by ordering professionals to consult with 
applicable appropriate use criteria for applicable 
imaging services. 
‘‘(ii) CONSULTATION.—The Secretary shall consult 
with physicians, practitioners, health care technology 
experts, and other stakeholders in specifying mecha-
nisms under this paragraph. 
‘‘(iii) INCLUSION OF CERTAIN MECHANISMS.—Mecha-
nisms specified under this paragraph may include any 
or all of the following that meet the requirements 
described in subparagraph (B)(ii): 
‘‘(I) Use of clinical decision support modules 
in certified EHR technology (as defined in section 
1848(o)(4)). 
‘‘(II) Use of private sector clinical decision sup-
port mechanisms that are independent from cer-
tified EHR technology, which may include use of 
clinical decision support mechanisms available 
from medical specialty organizations. 
‘‘(III) Use of a clinical decision support mecha-
nism established by the Secretary. 
‘‘(B) QUALIFIED
CLINICAL
DECISION
SUPPORT
MECHA-
NISMS.—
H. R. 4302—28 
‘‘(i) IN GENERAL.—For purposes of this subsection, 
a qualified clinical decision support mechanism is a 
mechanism that the Secretary determines meets the 
requirements described in clause (ii). 
‘‘(ii) REQUIREMENTS.—The requirements described 
in this clause are the following: 
‘‘(I) The mechanism makes available to the 
ordering professional applicable appropriate use 
criteria specified under paragraph (2) and the sup-
porting documentation for the applicable 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 imaging service ordered 
is consistent with the applicable appropriate use 
criteria so specified. 
‘‘(IV) The mechanism generates and provides 
to the ordering professional a certification or docu-
mentation 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 appropriate use criteria under such 
paragraph. 
‘‘(VI) The mechanism meets privacy and secu-
rity standards under applicable provisions of law. 
‘‘(VII) The mechanism performs such other 
functions as specified by the Secretary, which may 
include a requirement to provide aggregate feed-
back to the ordering professional. 
‘‘(C) LIST
OF
MECHANISMS
FOR
CONSULTATION
WITH 
APPLICABLE APPROPRIATE USE CRITERIA.— 
‘‘(i) INITIAL LIST.—Not later than April 1, 2016, 
the Secretary shall publish a list of mechanisms speci-
fied under this paragraph. 
‘‘(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 APPROPRIATE USE CRI-
TERIA.— 
‘‘(A) CONSULTATION
BY
ORDERING
PROFESSIONAL.— 
Beginning with January 1, 2017, subject to subparagraph 
(C), with respect to an applicable imaging service ordered 
by an ordering professional that would be furnished in 
an applicable setting and paid for under an applicable 
payment system (as defined in subparagraph (D)), an 
ordering professional shall— 
‘‘(i) consult with a qualified decision support 
mechanism listed under paragraph (3)(C); and
H. R. 4302—29 
‘‘(ii) provide to the furnishing professional the 
information described in clauses (i) through (iii) of 
subparagraph (B). 
‘‘(B) REPORTING BY FURNISHING PROFESSIONAL.—Begin-
ning with January 1, 2017, subject to subparagraph (C), 
with respect to an applicable imaging service furnished 
in an applicable setting and paid for under an applicable 
payment system (as defined in subparagraph (D)), payment 
for such service may only be made if the claim for the 
service includes the following: 
‘‘(i) Information about which qualified clinical deci-
sion support mechanism was consulted by the ordering 
professional for the service. 
‘‘(ii) Information regarding— 
‘‘(I) whether the service ordered would adhere 
to the applicable appropriate 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 subparagraphs (A) 
and (B) and paragraph (6)(A) shall not apply to the fol-
lowing: 
‘‘(i) EMERGENCY SERVICES.—An applicable imaging 
service ordered for an individual with an emergency 
medical condition (as defined in section 1867(e)(1)). 
‘‘(ii) INPATIENT SERVICES.—An applicable imaging 
service ordered for an inpatient 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 renewal, that consulta-
tion with applicable appropriate use criteria would 
result in a significant hardship, such as in the case 
of a professional who practices in a rural area without 
sufficient Internet access. 
‘‘(D) APPLICABLE PAYMENT SYSTEM DEFINED.—In this 
subsection, the term ‘applicable payment system’ means 
the following: 
‘‘(i) The physician fee schedule established under 
section 1848(b). 
‘‘(ii) The prospective payment system for hospital 
outpatient department services under section 1833(t). 
‘‘(iii) The ambulatory surgical center payment sys-
tems under section 1833(i). 
‘‘(5) 
IDENTIFICATION
OF
OUTLIER
ORDERING
PROFES-
SIONALS.— 
‘‘(A) IN GENERAL.—With respect to applicable imaging 
services furnished beginning with 2017, the Secretary shall 
determine, on an annual basis, no more than five percent
H. R. 4302—30 
of the total number of ordering professionals who are 
outlier ordering professionals. 
‘‘(B) OUTLIER
ORDERING
PROFESSIONALS.—The deter-
mination of an outlier ordering professional shall— 
‘‘(i) be based on low adherence to applicable appro-
priate use criteria specified under paragraph (2), which 
may be based on comparison to other ordering profes-
sionals; and 
‘‘(ii) include data for ordering professionals for 
whom prior authorization under paragraph (6)(A) 
applies. 
‘‘(C) USE OF TWO YEARS OF DATA.—The Secretary shall 
use two years of data to identify outlier ordering profes-
sionals under this paragraph. 
‘‘(D) PROCESS.—The Secretary shall establish a process 
for determining when an outlier ordering professional is 
no longer an outlier ordering professional. 
‘‘(E) CONSULTATION
WITH
STAKEHOLDERS.—The Sec-
retary shall consult with physicians, practitioners and other 
stakeholders in developing methods to identify outlier 
ordering 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 Secretary shall, for a period determined 
appropriate by the Secretary, apply prior authorization 
for applicable imaging services that are ordered by an 
outlier ordering professional identified under paragraph 
(5). 
‘‘(B) APPROPRIATE USE CRITERIA IN PRIOR AUTHORIZA-
TION.—In applying prior authorization under subparagraph 
(A), the Secretary shall utilize only the applicable appro-
priate use criteria specified under this subsection. 
‘‘(C) FUNDING.—For purposes of carrying out this para-
graph, the Secretary shall provide for the transfer, from 
the Federal Supplementary Medical Insurance Trust Fund 
under section 1841, of $5,000,000 to the Centers for Medi-
care & Medicaid Services Program Management Account 
for each of fiscal years 2019 through 2021. Amounts trans-
ferred under the preceding sentence shall remain available 
until expended. 
‘‘(7) CONSTRUCTION.—Nothing in this subsection shall be 
construed as granting the Secretary the authority to develop 
or initiate the development of clinical practice guidelines or 
appropriate use criteria.’’. 
(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.—For provisions relating to the 
application of appropriate use criteria for certain imaging 
services, see section 1834(q).’’. 
(3) REPORT ON EXPERIENCE OF IMAGING APPROPRIATE 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 includes
H. R. 4302—31 
a description of the extent to which appropriate 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 SUSTAIN-
ABLE 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 INFORMATION ON PHYSI-
CIANS’ 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 amended by adding at the 
end the following new subparagraph: 
‘‘(M) AUTHORITY TO COLLECT AND USE INFORMATION 
ON PHYSICIANS’ SERVICES IN THE DETERMINATION OF REL-
ATIVE VALUES.— 
‘‘(i) 
COLLECTION
OF
INFORMATION.—Notwith-
standing any other provision of law, the Secretary may 
collect or obtain information on the resources directly 
or indirectly related to furnishing services for which 
payment is made under the fee schedule established 
under subsection (b). Such information may be collected 
or obtained from any eligible professional or any other 
source. 
‘‘(ii) USE OF INFORMATION.—Notwithstanding any 
other provision of law, subject to clause (v), the Sec-
retary may (as the Secretary determines appropriate) 
use information collected or obtained pursuant to 
clause (i) in the determination of relative values for 
services under this section. 
‘‘(iii) TYPES
OF
INFORMATION.—The types of 
information described in clauses (i) and (ii) may, at 
the Secretary’s discretion, include any or all of the 
following: 
‘‘(I) Time involved in furnishing services. 
‘‘(II) Amounts and types of practice expense 
inputs involved with furnishing services. 
‘‘(III) Prices (net of any discounts) 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 services under this section. 
‘‘(iv) INFORMATION
COLLECTION
MECHANISMS.— 
Information may be collected or obtained pursuant to 
this subparagraph from any or all of the following: 
‘‘(I) Surveys of physicians, other suppliers, pro-
viders of services, manufacturers, and vendors. 
‘‘(II) Surgical logs, billing systems, or other 
practice or facility records. 
‘‘(III) Electronic health records.
H. R. 4302—32 
‘‘(IV) Any other mechanism determined appro-
priate by the Secretary. 
‘‘(v) TRANSPARENCY OF USE OF INFORMATION.— 
‘‘(I) IN GENERAL.—Subject to subclauses (II) 
and (III), if the Secretary uses information col-
lected or obtained under this subparagraph in the 
determination of relative values under this sub-
section, the Secretary shall disclose the informa-
tion source and discuss the use of such information 
in such determination of relative values through 
notice and comment rulemaking. 
‘‘(II) THRESHOLDS
FOR
USE.—The Secretary 
may establish thresholds in order to use such 
information, including the exclusion of information 
collected or obtained from eligible professionals 
who use very high resources (as determined by 
the Secretary) in furnishing a service. 
‘‘(III) DISCLOSURE OF INFORMATION.—The Sec-
retary shall make aggregate information available 
under this subparagraph but shall not disclose 
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 payments under this part to 
an eligible professional that submits such solicited 
information under this subparagraph as the Secretary 
determines appropriate in order to compensate such 
eligible professional for such submission. Such pay-
ments shall be provided in a form and manner specified 
by the Secretary. 
‘‘(vii) ADMINISTRATION.—Chapter 35 of title 44, 
United States Code, shall not apply to information 
collected or obtained under this subparagraph. 
‘‘(viii) DEFINITION OF ELIGIBLE PROFESSIONAL.—In 
this subparagraph, the term ‘eligible professional’ has 
the meaning given such term in subsection (k)(3)(B). 
‘‘(ix) FUNDING.—For purposes of carrying out this 
subparagraph, in addition to funds otherwise appro-
priated, the Secretary shall provide for the transfer, 
from the Federal Supplementary Medical Insurance 
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 
(C) by adding at the end the following new subpara-
graph: 
‘‘(F) the collection and use of information in the deter-
mination of relative values under subsection (c)(2)(M).’’.
H. R. 4302—33 
(b) AUTHORITY FOR ALTERNATIVE APPROACHES TO ESTABLISHING 
PRACTICE EXPENSE RELATIVE VALUES.—Section 1848(c)(2) of the 
Social Security Act (42 U.S.C. 1395w–4(c)(2)), as amended by sub-
section (a), is amended by adding at the end the following new 
subparagraph: 
‘‘(N) AUTHORITY
FOR
ALTERNATIVE
APPROACHES
TO 
ESTABLISHING PRACTICE EXPENSE RELATIVE VALUES.—The 
Secretary may establish or adjust practice expense relative 
values under this subsection using cost, charge, or other 
data from suppliers or providers of services, 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
POTENTIALLY
MISVALUED 
CODES.—For 
purposes 
of 
identifying 
potentially 
misvalued codes pursuant to clause (i)(I), the Secretary 
shall examine codes (and families of codes as appro-
priate) based on any or all of the following criteria: 
‘‘(I) Codes that have experienced the fastest 
growth. 
‘‘(II) Codes that have experienced substantial 
changes in practice expenses. 
‘‘(III) Codes that describe new technologies or 
services within an appropriate time period (such 
as 3 years) after the relative values are initially 
established for such codes. 
‘‘(IV) Codes which are multiple codes that are 
frequently billed in conjunction with furnishing 
a single service. 
‘‘(V) Codes with low relative values, particu-
larly those that are often billed multiple times 
for a single treatment. 
‘‘(VI) Codes that have not been subject to 
review since implementation of the fee schedule. 
‘‘(VII) Codes that account for the majority of 
spending under the physician fee schedule. 
‘‘(VIII) Codes for services that have experi-
enced a substantial change in the hospital length 
of stay or procedure time. 
‘‘(IX) Codes for which there may be a change 
in the typical site of service since the code was 
last valued. 
‘‘(X) Codes for which there is a significant 
difference in payment for the same service between 
different sites of service. 
‘‘(XI) Codes for which there may be anomalies 
in relative values within a family of codes. 
‘‘(XII) Codes for services where there may be 
efficiencies when a service is furnished at the same 
time as other services. 
‘‘(XIII) Codes with high intra-service work per 
unit of time. 
‘‘(XIV) Codes with high practice expense rel-
ative value units. 
‘‘(XV) Codes with high cost supplies.
H. R. 4302—34 
‘‘(XVI) Codes as determined appropriate by the 
Secretary.’’. 
(d) TARGET FOR RELATIVE VALUE ADJUSTMENTS FOR MISVALUED 
SERVICES.— 
(1) IN GENERAL.—Section 1848(c)(2) of the Social Security 
Act (42 U.S.C. 1395w–4(c)(2)), as amended by subsections (a) 
and (b), is amended by adding at the end the following new 
subparagraph: 
‘‘(O) TARGET FOR RELATIVE VALUE ADJUSTMENTS FOR 
MISVALUED SERVICES.—With respect to fee schedules estab-
lished for each of 2017 through 2020, the following shall 
apply: 
‘‘(i) DETERMINATION OF NET REDUCTION IN EXPENDI-
TURES.—For each year, the Secretary shall determine 
the estimated net reduction in expenditures under the 
fee schedule under this section with respect to the 
year as a result of adjustments to the relative values 
established under this paragraph for misvalued codes. 
‘‘(ii) BUDGET NEUTRAL REDISTRIBUTION OF FUNDS 
IF TARGET MET AND COUNTING OVERAGES TOWARDS THE 
TARGET FOR THE SUCCEEDING YEAR.—If the estimated 
net reduction in expenditures determined under clause 
(i) for the year is equal to or greater than the target 
for the year— 
‘‘(I) reduced expenditures attributable to such 
adjustments shall be redistributed for the year 
in a budget neutral manner in accordance with 
subparagraph (B)(ii)(II); and 
‘‘(II) the amount by which such reduced 
expenditures exceeds the target for the year shall 
be treated as a reduction in expenditures described 
in clause (i) for the succeeding year, for purposes 
of determining whether the target has or has not 
been met under this subparagraph with respect 
to that year. 
‘‘(iii) EXEMPTION FROM BUDGET NEUTRALITY IF TAR-
GET
NOT
MET.—If the estimated net reduction in 
expenditures determined under clause (i) for the year 
is less than the target for the year, reduced expendi-
tures in an amount equal to the target recapture 
amount shall not be taken into account in applying 
subparagraph (B)(ii)(II) with respect to fee schedules 
beginning with 2017. 
‘‘(iv) TARGET RECAPTURE AMOUNT.—For purposes 
of clause (iii), the target recapture amount is, with 
respect to a year, an amount equal to the difference 
between— 
‘‘(I) the target for the year; and 
‘‘(II) the estimated net reduction in expendi-
tures determined under clause (i) for the year. 
‘‘(v) TARGET.—For purposes of this subparagraph, 
with respect to a year, the target is calculated as 
0.5 percent of the estimated amount of expenditures 
under the fee schedule under this section for the year.’’. 
(2) CONFORMING AMENDMENT.—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:
H. R. 4302—35 
‘‘(VIII) REDUCTIONS FOR MISVALUED SERVICES 
IF TARGET NOT MET.—Effective for fee schedules 
beginning with 2017, reduced expenditures attrib-
utable to the application of the target recapture 
amount described in subparagraph (O)(iii).’’. 
(e) PHASE-IN
OF SIGNIFICANT RELATIVE VALUE UNIT (RVU) 
REDUCTIONS.— 
(1) IN
GENERAL.—Section 1848(c) of the Social Security 
Act (42 U.S.C. 1395w–4(c)) is amended by adding at the end 
the following new paragraph: 
‘‘(7) PHASE-IN OF SIGNIFICANT RELATIVE VALUE UNIT (RVU) 
REDUCTIONS.—Effective for fee schedules established beginning 
with 2017, for services that are not new or revised codes, 
if the total relative value units for a service for a year would 
otherwise be decreased by an estimated amount equal to or 
greater than 20 percent as compared to the total relative value 
units for the previous year, the applicable adjustments in work, 
practice expense, and malpractice relative value units shall 
be phased-in over a 2-year period.’’. 
(2) CONFORMING AMENDMENTS.—Section 1848(c)(2) of the 
Social Security Act (42 U.S.C. 1395w–4(c)(2)) is amended— 
(A) in subparagraph (B)(ii)(I), by striking ‘‘subclause 
(II)’’ and inserting ‘‘subclause (II) and paragraph (7)’’; and 
(B) in subparagraph (K)(iii)(VI)— 
(i) 
by 
striking 
‘‘provisions 
of 
subparagraph 
(B)(ii)(II)’’ and inserting ‘‘provisions of subparagraph 
(B)(ii)(II) and paragraph (7)’’; and 
(ii) by striking ‘‘under subparagraph (B)(ii)(II)’’ and 
inserting ‘‘under subparagraph (B)(ii)(I)’’. 
(f) AUTHORITY TO SMOOTH RELATIVE VALUES WITHIN GROUPS 
OF SERVICES.—Section 1848(c)(2)(C) of the Social Security Act (42 
U.S.C. 1395w–4(c)(2)(C)) is amended— 
(1) in each of clauses (i) and (iii), by striking ‘‘the service’’ 
and inserting ‘‘the service or group of services’’ each place 
it appears; and 
(2) in the first sentence of clause (ii), by inserting ‘‘or 
group of services’’ before the period. 
(g) GAO STUDY AND REPORT ON RELATIVE VALUE SCALE UPDATE 
COMMITTEE.— 
(1) STUDY.—The Comptroller General of the United States 
(in this subsection referred to as the ‘‘Comptroller General’’) 
shall conduct a study of the processes used by the Relative 
Value Scale Update Committee (RUC) to provide recommenda-
tions to the Secretary of Health and Human Services regarding 
relative values for specific services under the Medicare physi-
cian fee schedule under section 1848 of the Social Security 
Act (42 U.S.C. 1395w–4). 
(2) REPORT.—Not later than 1 year after the date of the 
enactment of this Act, the Comptroller General shall submit 
to Congress a report containing the results of the study con-
ducted under paragraph (1). 
(h) ADJUSTMENT TO MEDICARE PAYMENT LOCALITIES.— 
(1) IN
GENERAL.—Section 1848(e) of the Social Security 
Act (42 U.S.C. 1395w–4(e)) is amended by adding at the end 
the following new paragraph: 
‘‘(6) USE OF MSAS AS FEE SCHEDULE AREAS IN CALIFORNIA.—
H. R. 4302—36 
‘‘(A) IN GENERAL.—Subject to the succeeding provisions 
of this paragraph and notwithstanding the previous provi-
sions of this subsection, for services furnished on or after 
January 1, 2017, the fee schedule areas used for payment 
under this section applicable to California shall be the 
following: 
‘‘(i) Each Metropolitan Statistical Area (each in 
this paragraph referred to as an ‘MSA’), as defined 
by the Director of the Office of Management and 
Budget as of December 31 of the previous year, shall 
be a fee schedule area. 
‘‘(ii) All areas not included in an MSA shall be 
treated as a single rest-of-State fee schedule area. 
‘‘(B) TRANSITION
FOR
MSAS
PREVIOUSLY
IN
REST-OF- 
STATE PAYMENT LOCALITY OR IN LOCALITY 3.— 
‘‘(i) IN GENERAL.—For services furnished in Cali-
fornia during a year beginning with 2017 and ending 
with 2021 in an MSA in a transition area (as defined 
in subparagraph (D)), subject to subparagraph (C), the 
geographic index values to be applied under this sub-
section for such year shall be equal to the sum of 
the following: 
‘‘(I) CURRENT
LAW
COMPONENT.—The old 
weighting factor (described in clause (ii)) for such 
year multiplied by the geographic index values 
under this subsection for the fee schedule area 
that included such MSA that would have applied 
in such area (as estimated by the Secretary) if 
this paragraph did not apply. 
‘‘(II) MSA-BASED
COMPONENT.—The MSA- 
based weighting factor (described in clause (iii)) 
for such year multiplied by the geographic index 
values computed for the fee schedule area under 
subparagraph (A) for the year (determined without 
regard to this subparagraph). 
‘‘(ii) OLD WEIGHTING FACTOR.—The old weighting 
factor described in this clause— 
‘‘(I) for 2017, is 5⁄6; and 
‘‘(II) for each succeeding year, is the old 
weighting factor described in this clause for the 
previous year minus 1⁄6. 
‘‘(iii) MSA-BASED WEIGHTING FACTOR.—The MSA- 
based weighting factor described in this clause for a 
year is 1 minus the old weighting factor under clause 
(ii) for that year. 
‘‘(C) HOLD
HARMLESS.—For services furnished in a 
transition area in California during a year beginning with 
2017, the geographic index values to be applied under 
this subsection for such year shall not be less than the 
corresponding geographic index values that would have 
applied in such transition area (as estimated by the Sec-
retary) if this paragraph did not apply. 
‘‘(D) TRANSITION AREA DEFINED.—In this paragraph, 
the term ‘transition area’ means each of the following fee 
schedule areas for 2013: 
‘‘(i) The rest-of-State payment locality. 
‘‘(ii) Payment locality 3.
H. R. 4302—37 
‘‘(E) REFERENCES TO FEE SCHEDULE AREAS.—Effective 
for services furnished on or after January 1, 2017, for 
California, any reference in this section to a fee schedule 
area shall be deemed a reference to a fee schedule area 
established in accordance with this paragraph.’’. 
(2) CONFORMING
AMENDMENT
TO
DEFINITION
OF
FEE 
SCHEDULE AREA.—Section 1848(j)(2) of the Social Security Act 
(42 U.S.C. 1395w–4(j)(2)) is amended by striking ‘‘The term’’ 
and inserting ‘‘Except as provided in subsection (e)(6)(D), the 
term’’. 
(i) DISCLOSURE OF DATA USED TO ESTABLISH MULTIPLE PROCE-
DURE PAYMENT REDUCTION POLICY.—The Secretary of Health and 
Human Services shall make publicly available the information used 
to establish the multiple procedure payment reduction policy to 
the professional component of imaging services in the final rule 
published in the Federal Register, v. 77, n. 222, November 16, 
2012, pages 68891–69380 under the physician fee schedule under 
section 1848 of the Social Security Act (42 U.S.C. 1395w–4). 
SEC. 221. MEDICAID DSH. 
(a) MODIFICATIONS OF REDUCTIONS TO ALLOTMENTS.—Section 
1923(f) of the Social Security Act (42 U.S.C. 1396r–4(f)) is 
amended— 
(1) in paragraph (7)(A)— 
(A) in clause (i), by striking ‘‘2016 through 2020’’ and 
inserting ‘‘2017 through 2024’’; and 
(B) in clause (ii), by striking subclauses (I) through 
(IV), and inserting the following: 
‘‘(I) $1,800,000,000 for fiscal year 2017; 
‘‘(II) $4,700,000,000 for fiscal year 2018; 
‘‘(III) $4,700,000,000 for fiscal year 2019; 
‘‘(IV) $4,700,000,000 for fiscal year 2020; 
‘‘(V) $4,800,000,000 for fiscal year 2021; 
‘‘(VI) $5,000,000,000 for fiscal year 2022; 
‘‘(VII) $5,000,000,000 for fiscal year 2023; and 
‘‘(VIII) $4,400,000,000 for fiscal year 2024.’’; 
and 
(2) by striking paragraph (8) and inserting the following: 
‘‘(8) CALCULATION OF DSH ALLOTMENTS AFTER REDUCTIONS 
PERIOD.—The DSH allotment for a State for fiscal years after 
fiscal year 2024 shall be calculated under paragraph (3) without 
regard to paragraph (7).’’. 
(b) MACPAC REVIEW AND REPORT.—Section 1900(b)(6) of the 
Social Security Act (42 U.S.C. 1396(b)(6)) is amended— 
(1) by striking ‘‘MACPAC shall consult’’ and inserting the 
following: 
‘‘(A) IN GENERAL.—MACPAC shall consult’’; and 
(2) by adding at the end the following: 
‘‘(B) REVIEW AND REPORTS REGARDING MEDICAID DSH.— 
‘‘(i) IN
GENERAL.—MACPAC shall review and 
submit an annual report to Congress on dispropor-
tionate share hospital payments under section 1923. 
Each report shall include the information specified in 
clause (ii). 
‘‘(ii) REQUIRED REPORT INFORMATION.—Each report 
required under this subparagraph shall include the 
following:
H. R. 4302—38 
‘‘(I) Data relating to changes in the number 
of uninsured individuals. 
‘‘(II) Data relating to the amount and sources 
of hospitals’ uncompensated care costs, including 
the amount of such costs that are the result of 
providing unreimbursed or under-reimbursed serv-
ices, charity care, or bad debt. 
‘‘(III) Data identifying hospitals with high 
levels of uncompensated care that also provide 
access to essential community services for low- 
income, uninsured, and vulnerable populations, 
such as graduate medical education, and the con-
tinuum of primary through quarternary care, 
including the provision of trauma care and public 
health services. 
‘‘(IV) State-specific analyses regarding the 
relationship between the most recent State DSH 
allotment and the projected State DSH allotment 
for the succeeding year and the data reported 
under subclauses (I), (II), and (III) for the State. 
‘‘(iii) DATA.—Notwithstanding any other provision 
of law, the Secretary regularly shall provide MACPAC 
with the most recent State reports and most recent 
independent certified audits submitted under section 
1923(j), cost reports submitted under title XVIII, and 
such other data as MACPAC may request for purposes 
of conducting the reviews and preparing and submit-
ting the annual reports required under this subpara-
graph. 
‘‘(iv) SUBMISSION
DEADLINES.—The first report 
required under this subparagraph shall be submitted 
to Congress not later than February 1, 2016. Subse-
quent reports shall be submitted as part of, or with, 
each annual report required under paragraph (1)(C) 
during the period of fiscal years 2017 through 2024.’’. 
SEC. 222. REALIGNMENT OF THE MEDICARE SEQUESTER FOR FISCAL 
YEAR 2024. 
Paragraph (6) (relating to implementing direct spending reduc-
tions) of section 251A of the Balanced Budget and Emergency 
Deficit Control Act of 1985 (2 U.S.C. 901a) is amended by adding 
at the end the following new subparagraph: 
‘‘(D) Notwithstanding the 2 percent limit specified in 
subparagraph (A) for payments for the Medicare programs 
specified in section 256(d), the sequestration order of the Presi-
dent under such subparagraph for fiscal year 2024 shall be 
applied to such payments so that— 
‘‘(i) with respect to the first 6 months in which such 
order is effective for such fiscal year, the payment reduction 
shall be 4.0 percent; and 
‘‘(ii) with respect to the second 6 months in which 
such order is so effective for such fiscal year, the payment 
reduction shall be 0.0 percent.’’. 
SEC. 223. DEMONSTRATION PROGRAMS TO IMPROVE COMMUNITY 
MENTAL HEALTH SERVICES. 
(a) CRITERIA FOR CERTIFIED COMMUNITY BEHAVIORAL HEALTH 
CLINICS TO PARTICIPATE IN DEMONSTRATION PROGRAMS.—
H. R. 4302—39 
(1) PUBLICATION.—Not later than September 1, 2015, the 
Secretary shall publish criteria for a clinic to be certified by 
a State as a certified community behavioral health clinic for 
purposes of participating in a demonstration program conducted 
under subsection (d). 
(2) REQUIREMENTS.—The criteria published under this sub-
section shall include criteria with respect to the following: 
(A) STAFFING.—Staffing requirements, including cri-
teria that staff have diverse disciplinary backgrounds, have 
necessary State-required license and accreditation, and are 
culturally and linguistically trained to serve the needs 
of the clinic’s patient population. 
(B) AVAILABILITY
AND
ACCESSIBILITY
OF
SERVICES.— 
Availability and accessibility of services, including crisis 
management services that are available and accessible 24 
hours a day, the use of a sliding scale for payment, and 
no rejection for services or limiting of services on the basis 
of a patient’s ability to pay or a place of residence. 
(C) CARE COORDINATION.—Care coordination, including 
requirements to coordinate care across settings and pro-
viders to ensure seamless transitions for patients across 
the full spectrum of health services including acute, 
chronic, and behavioral health needs. Care coordination 
requirements shall include partnerships or formal contracts 
with the following: 
(i) Federally-qualified health centers (and as 
applicable, rural health clinics) to provide Federally- 
qualified health center services (and as applicable, 
rural health clinic services) to the extent such services 
are not provided directly through the certified commu-
nity behavioral health clinic. 
(ii) Inpatient psychiatric facilities and substance 
use detoxification, post-detoxification step-down serv-
ices, and residential programs. 
(iii) Other community or regional services, sup-
ports, and providers, including schools, child welfare 
agencies, juvenile and criminal justice agencies and 
facilities, Indian Health Service youth regional treat-
ment centers, State licensed and nationally accredited 
child placing agencies for therapeutic foster care 
service, and other social and human services. 
(iv) Department of Veterans Affairs medical cen-
ters, independent outpatient clinics, drop-in centers, 
and other facilities of the Department as defined in 
section 1801 of title 38, United States Code. 
(v) Inpatient acute care hospitals and hospital out-
patient clinics. 
(D) SCOPE
OF
SERVICES.—Provision (in a manner 
reflecting person-centered care) of the following services 
which, if not available directly through the certified commu-
nity behavioral health clinic, are provided or referred 
through formal relationships with other providers: 
(i) Crisis mental health services, including 24-hour 
mobile crisis teams, emergency crisis intervention serv-
ices, and crisis stabilization. 
(ii) Screening, assessment, and diagnosis, including 
risk assessment.
H. R. 4302—40 
(iii) Patient-centered treatment planning or similar 
processes, including risk assessment and crisis plan-
ning. 
(iv) Outpatient mental health and substance use 
services. 
(v) Outpatient clinic primary care screening and 
monitoring of key health indicators and health risk. 
(vi) Targeted case management. 
(vii) Psychiatric rehabilitation services. 
(viii) Peer support and counselor services and 
family supports. 
(ix) Intensive, community-based mental health 
care for members of the armed forces and veterans, 
particularly those members and veterans located in 
rural areas, provided the care is consistent with min-
imum clinical mental health guidelines promulgated 
by the Veterans Health Administration including clin-
ical guidelines contained in the Uniform Mental Health 
Services Handbook of such Administration. 
(E) QUALITY
AND
OTHER
REPORTING.—Reporting of 
encounter data, clinical outcomes data, quality data, and 
such other data as the Secretary requires. 
(F) ORGANIZATIONAL AUTHORITY.—Criteria that a clinic 
be a non-profit or part of a local government behavioral 
health authority or operated under the authority of the 
Indian Health Service, an Indian tribe or tribal organiza-
tion pursuant to a contract, grant, cooperative agreement, 
or compact with the Indian Health Service pursuant to 
the Indian Self-Determination Act (25 U.S.C. 450 et seq.), 
or an urban Indian organization pursuant to a grant or 
contract with the Indian Health Service under title V of 
the Indian Health Care Improvement Act (25 U.S.C. 1601 
et seq.). 
(b) GUIDANCE
ON DEVELOPMENT
OF PROSPECTIVE PAYMENT 
SYSTEM FOR TESTING UNDER DEMONSTRATION PROGRAMS.— 
(1) IN GENERAL.—Not later than September 1, 2015, the 
Secretary, through the Administrator of the Centers for Medi-
care & Medicaid Services, shall issue guidance for the establish-
ment of a prospective payment system that shall only apply 
to medical assistance for mental health services furnished by 
a certified community behavioral health clinic participating 
in a demonstration program under subsection (d). 
(2) REQUIREMENTS.—The guidance issued by the Secretary 
under paragraph (1) shall provide that— 
(A) no payment shall be made for inpatient care, resi-
dential treatment, room and board expenses, or any other 
non-ambulatory services, as determined by the Secretary; 
and 
(B) no payment shall be made to satellite facilities 
of certified community behavioral health clinics if such 
facilities are established after the date of enactment of 
this Act. 
(c) PLANNING GRANTS.— 
(1) IN GENERAL.—Not later than January 1, 2016, the Sec-
retary shall award planning grants to States for the purpose 
of developing proposals to participate in time-limited dem-
onstration programs described in subsection (d).
H. R. 4302—41 
(2) USE OF FUNDS.—A State awarded a planning grant 
under this subsection shall— 
(A) solicit input with respect to the development of 
such a demonstration program from patients, providers, 
and other stakeholders; 
(B) certify clinics as certified community behavioral 
health clinics for purposes of participating in a demonstra-
tion program conducted under subsection (d); and 
(C) establish a prospective payment system for mental 
health services furnished by a certified community behav-
ioral health clinic participating in a demonstration program 
under subsection (d) in accordance with the guidance issued 
under subsection (b). 
(d) DEMONSTRATION PROGRAMS.— 
(1) IN GENERAL.—Not later than September 1, 2017, the 
Secretary shall select States to participate in demonstration 
programs that are developed through planning grants awarded 
under subsection (c), meet the requirements of this subsection, 
and represent a diverse selection of geographic areas, including 
rural and underserved areas. 
(2) APPLICATION REQUIREMENTS.— 
(A) IN GENERAL.—The Secretary shall solicit applica-
tions to participate in demonstration programs under this 
subsection solely from States awarded planning grants 
under subsection (c). 
(B) REQUIRED INFORMATION.—An application for a dem-
onstration program under this subsection shall include the 
following: 
(i) The target Medicaid population to be served 
under the demonstration program. 
(ii) A list of participating certified community 
behavioral health clinics. 
(iii) Verification that the State has certified a 
participating clinic as a certified community behavioral 
health clinic in accordance with the requirements of 
subsection (b). 
(iv) A description of the scope of the mental health 
services available under the State Medicaid program 
that will be paid for under the prospective payment 
system tested in the demonstration program. 
(v) Verification that the State has agreed to pay 
for such services at the rate established under the 
prospective payment system. 
(vi) Such other information as the Secretary may 
require 
relating 
to 
the 
demonstration 
program 
including with respect to determining the soundness 
of the proposed prospective payment system. 
(3) NUMBER AND LENGTH OF DEMONSTRATION PROGRAMS.— 
Not more than 8 States shall be selected for 2-year demonstra-
tion programs under this subsection. 
(4) REQUIREMENTS
FOR
SELECTING
DEMONSTRATION
PRO-
GRAMS.— 
(A) IN GENERAL.—The Secretary shall give preference 
to selecting demonstration programs where participating 
certified community behavioral health clinics— 
(i) provide the most complete scope of services 
described in subsection (a)(2)(D) to individuals eligible
H. R. 4302—42 
for medical assistance under the State Medicaid pro-
gram; 
(ii) will improve availability of, access to, and 
participation in, services described in subsection 
(a)(2)(D) to individuals eligible for medical assistance 
under the State Medicaid program; 
(iii) will improve availability of, access to, and 
participation in assisted outpatient mental health 
treatment in the State; or 
(iv) demonstrate the potential to expand available 
mental health services in a demonstration area and 
increase the quality of such services without increasing 
net Federal spending. 
(5) PAYMENT FOR MEDICAL ASSISTANCE FOR MENTAL HEALTH 
SERVICES
PROVIDED
BY
CERTIFIED
COMMUNITY
BEHAVIORAL 
HEALTH CLINICS.— 
(A) IN
GENERAL.—The Secretary shall pay a State 
participating in a demonstration program under this sub-
section the Federal matching percentage specified in 
subparagraph (B) for amounts expended by the State to 
provide medical assistance for mental health services 
described in the demonstration program application in 
accordance with paragraph (2)(B)(iv) that are provided by 
certified community behavioral health clinics to individuals 
who are enrolled in the State Medicaid program. Payments 
to States made under this paragraph shall be considered 
to have been under, and are subject to the requirements 
of, section 1903 of the Social Security Act (42 U.S.C. 1396b). 
(B) FEDERAL
MATCHING
PERCENTAGE.—The Federal 
matching percentage specified in this subparagraph is with 
respect to medical assistance described in subparagraph 
(A) that is furnished— 
(i) to a newly eligible individual described in para-
graph (2) of section 1905(y) of the Social Security Act 
(42 U.S.C. 1396d(y)), the matching rate applicable 
under paragraph (1) of that section; and 
(ii) to an individual who is not a newly eligible 
individual (as so described) but who is eligible for 
medical assistance under the State Medicaid program, 
the enhanced FMAP applicable to the State. 
(C) LIMITATIONS.— 
(i) IN GENERAL.—Payments shall be made under 
this paragraph to a State only for mental health serv-
ices— 
(I) that are described in the demonstration 
program application in accordance with paragraph 
(2)(iv); 
(II) for which payment is available under the 
State Medicaid program; and 
(III) that are provided to an individual who 
is eligible for medical assistance under the State 
Medicaid program. 
(ii) PROHIBITED PAYMENTS.—No payment shall be 
made under this paragraph— 
(I) for inpatient care, residential treatment, 
room and board expenses, or any other non-
H. R. 4302—43 
ambulatory services, as determined by the Sec-
retary; or 
(II) with respect to payments made to satellite 
facilities of certified community behavioral health 
clinics if such facilities are established after the 
date of enactment of this Act. 
(6) WAIVER
OF
STATEWIDENESS
REQUIREMENT.—The Sec-
retary shall waive section 1902(a)(1) of the Social Security 
Act (42 U.S.C. 1396a(a)(1)) (relating to statewideness) as may 
be necessary to conduct demonstration programs in accordance 
with the requirements of this subsection. 
(7) ANNUAL REPORTS.— 
(A) IN GENERAL.—Not later than 1 year after the date 
on which the first State is selected for a demonstration 
program under this subsection, and annually thereafter, 
the Secretary shall submit to Congress an annual report 
on the use of funds provided under all demonstration pro-
grams conducted under this subsection. Each such report 
shall include— 
(i) an assessment of access to community-based 
mental health services under the Medicaid program 
in the area or areas of a State targeted by a demonstra-
tion program compared to other areas of the State; 
(ii) an assessment of the quality and scope of serv-
ices provided by certified community behavioral health 
clinics compared to community-based mental health 
services provided in States not participating in a dem-
onstration program under this subsection and in areas 
of a demonstration State that are not participating 
in the demonstration program; and 
(iii) an assessment of the impact of the demonstra-
tion programs on the Federal and State costs of a 
full range of mental health services (including 
inpatient, emergency and ambulatory services). 
(B) RECOMMENDATIONS.—Not later than December 31, 
2021, the Secretary shall submit to Congress recommenda-
tions concerning whether the demonstration programs 
under this section should be continued, expanded, modified, 
or terminated. 
(e) DEFINITIONS.—In this section: 
(1) FEDERALLY-QUALIFIED HEALTH CENTER SERVICES; FEDER-
ALLY-QUALIFIED HEALTH CENTER; RURAL HEALTH CLINIC SERV-
ICES; RURAL HEALTH CLINIC.—The terms ‘‘Federally-qualified 
health center services’’, ‘‘Federally-qualified health center’’, 
‘‘rural health clinic services’’, and ‘‘rural health clinic’’ have 
the meanings given those terms in section 1905(l) of the Social 
Security Act (42 U.S.C. 1396d(l)). 
(2) ENHANCED FMAP.—The term ‘‘enhanced FMAP’’ has the 
meaning given that term in section 2105(b) of the Social Secu-
rity Act (42 U.S.C. 1397dd(b)) but without regard to the second 
and third sentences of that section. 
(3) SECRETARY.—The term ‘‘Secretary’’ means the Secretary 
of Health and Human Services. 
(4) STATE.—The term ‘‘State’’ has the meaning given such 
term for purposes of title XIX of the Social Security Act (42 
U.S.C. 1396 et seq.). 
(f) FUNDING.—
H. R. 4302—44 
(1) IN GENERAL.—Out of any funds in the Treasury not 
otherwise appropriated, there is appropriated to the Secretary— 
(A) for purposes of carrying out subsections (a), (b), 
and (d)(7), $2,000,000 for fiscal year 2014; and 
(B) for purposes of awarding planning grants under 
subsection (c), $25,000,000 for fiscal year 2016. 
(2) AVAILABILITY.—Funds appropriated under paragraph 
(1) shall remain available until expended. 
SEC. 224. ASSISTED OUTPATIENT TREATMENT GRANT PROGRAM FOR 
INDIVIDUALS WITH SERIOUS MENTAL ILLNESS. 
(a) IN GENERAL.—The Secretary shall establish a 4-year pilot 
program to award not more than 50 grants each year to eligible 
entities for assisted outpatient treatment programs for individuals 
with serious mental illness. 
(b) CONSULTATION.—The Secretary shall carry out this section 
in consultation with the Director of the National Institute of Mental 
Health, the Attorney General of the United States, the Adminis-
trator of the Administration for Community Living, and the 
Administrator of the Substance Abuse and Mental Health Services 
Administration. 
(c) SELECTING AMONG APPLICANTS.—The Secretary— 
(1) may only award grants under this section to applicants 
that have not previously implemented an assisted outpatient 
treatment program; and 
(2) shall evaluate applicants based on their potential to 
reduce hospitalization, homelessness, incarceration, and inter-
action with the criminal justice system while improving the 
health and social outcomes of the patient. 
(d) USE OF GRANT.—An assisted outpatient treatment program 
funded with a grant awarded under this section shall include— 
(1) evaluating the medical and social needs of the patients 
who are participating in the program; 
(2) preparing and executing treatment plans for such 
patients that— 
(A) include criteria for completion of court-ordered 
treatment; and 
(B) provide for monitoring of the patient’s compliance 
with the treatment plan, including compliance with medica-
tion and other treatment regimens; 
(3) providing for such patients case management services 
that support the treatment plan; 
(4) ensuring appropriate referrals to medical and social 
service providers; 
(5) evaluating the process for implementing the program 
to ensure consistency with the patient’s needs and State law; 
and 
(6) measuring treatment outcomes, including health and 
social outcomes such as rates of incarceration, health care 
utilization, and homelessness. 
(e) REPORT.—Not later than the end of each of fiscal years 
2016, 2017, and 2018, the Secretary shall submit a report to the 
appropriate congressional committees on the grant program under 
this section. Each such report shall include an evaluation of the 
following:
H. R. 4302—45 
(1) Cost savings and public health outcomes such as mor-
tality, suicide, substance abuse, hospitalization, and use of serv-
ices. 
(2) Rates of incarceration by patients. 
(3) Rates of homelessness among patients. 
(4) Patient and family satisfaction with program participa-
tion. 
(f) DEFINITIONS.—In this section: 
(1) The term ‘‘assisted outpatient treatment’’ means medi-
cally prescribed mental health treatment that a patient receives 
while living in a community under the terms of a law author-
izing a State or local court to order such treatment. 
(2) The term ‘‘eligible entity’’ means a county, city, mental 
health system, mental health court, or any other entity with 
authority under the law of the State in which the grantee 
is located to implement, monitor, and oversee assisted out-
patient treatment programs. 
(3) The term ‘‘Secretary’’ means the Secretary of Health 
and Human Services. 
(g) FUNDING.— 
(1) AMOUNT OF GRANTS.—A grant under this section shall 
be in an amount that is not more than $1,000,000 for each 
of fiscal years 2015 through 2018. Subject to the preceding 
sentence, the Secretary shall determine the amount of each 
grant based on the population of the area, including estimated 
patients, to be served under the grant. 
(2) AUTHORIZATION OF APPROPRIATIONS.—There is author-
ized to be appropriated to carry out this section $15,000,000 
for each of fiscal years 2015 through 2018. 
SEC. 225. EXCLUSION FROM PAYGO SCORECARDS. 
(a) STATUTORY PAY-AS-YOU-GO SCORECARDS.—The budgetary 
effects of this Act shall not be entered on either PAYGO scorecard 
maintained pursuant to section 4(d) of the Statutory Pay-As-You- 
Go Act of 2010. 
(b) SENATE PAYGO SCORECARDS.—The budgetary effects of this 
Act shall not be entered on any PAYGO scorecard maintained 
for purposes of section 201 of S. Con. Res. 21 (110th Congress). 
Speaker of the House of Representatives. 
Vice President of the United States and
President of the Senate.