I 
113TH CONGRESS 
1ST SESSION H. R. 2810 
To amend title XVIII of the Social Security Act to reform the sustainable 
growth rate and Medicare payment for physicians’ services, and for 
other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 24, 2013 
Mr. BURGESS (for himself, Mr. PALLONE, Mr. UPTON, Mr. WAXMAN, Mr. 
PITTS, and Mr. DINGELL) introduced the following bill; which was re-
ferred to the Committee on Energy and Commerce, and in addition to 
the Committees on Ways and Means and the Judiciary, for a period to 
be subsequently determined by the Speaker, in each case for consider-
ation of such provisions as fall within the jurisdiction of the committee 
concerned 
A BILL 
To amend title XVIII of the Social Security Act to reform 
the sustainable growth rate and Medicare payment for 
physicians’ services, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives 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 
‘‘Medicare Patient Access and Quality Improvement Act 
of 2013’’. 
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(b) TABLE OF CONTENTS.—The table of contents of 
this Act is as follows: 
Sec. 1. Short title; table of contents. 
Sec. 2. Reform of sustainable growth rate (SGR) and Medicare payment for 
physicians’ services. 
Sec. 3. Expanding availability of Medicare data. 
Sec. 4. Encouraging care coordination and medical homes. 
Sec. 5. Miscellaneous. 
SEC. 2. REFORM OF SUSTAINABLE GROWTH RATE (SGR) 
AND MEDICARE PAYMENT FOR PHYSICIANS’ 
SERVICES. 
(a) STABILIZING FEE UPDATES (PHASE I).— 
(1) REPEAL
OF
SGR
PAYMENT
METHOD-
OLOGY.—Section 1848 of the Social Security Act 
(42 U.S.C. 1395w–4) is amended— 
(A) in subsection (d)— 
(i) in paragraph (1)(A), by inserting 
‘‘or a subsequent paragraph or section 
1848A’’ after ‘‘paragraph (4)’’; and 
(ii) in paragraph (4)— 
(I) in the heading, by striking 
‘‘YEARS BEGINNING WITH 2001’’ and 
inserting ‘‘2001, 2002, AND 2003’’; and 
(II) in subparagraph (A), by 
striking ‘‘a year beginning with 2001’’ 
and inserting ‘‘2001, 2002, and 
2003’’; and 
(B) in subsection (f)— 
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(i) in paragraph (1)(B), by inserting 
‘‘through 2013’’ after ‘‘of such succeeding 
year’’; and 
(ii) in paragraph (2), by inserting 
‘‘and ending with 2013’’ after ‘‘beginning 
with 2000’’. 
(2) UPDATE
OF
RATES
FOR
2014
THROUGH 
2018.—Subsection (d) of section 1848 of the Social 
Security Act (42 U.S.C. 1395w–4) is amended by 
adding at the end the following new paragraph: 
‘‘(15) UPDATE FOR 2014 THROUGH 2018.—The 
update to the single conversion factor established in 
paragraph (1)(C) for each of 2014 through 2018 
shall be 0.5 percent.’’. 
(b) QUALITY UPDATE INCENTIVE PROGRAM (PHASE 
II).— 
(1) IN GENERAL.—Section 1848 of the Social 
Security Act (42 U.S.C. 1395w–4), as amended by 
subsection (a), is further amended— 
(A) in subsection (d), by adding at the end 
the following new paragraph: 
‘‘(16) UPDATE BEGINNING WITH 2019.— 
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), the update to the single conversion 
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factor established in paragraph (1)(C) for each 
year beginning with 2019 shall be 0.5 percent. 
‘‘(B) ADJUSTMENT.—In the case of an eli-
gible professional (as defined in subsection 
(k)(3)) who does not have a payment arrange-
ment described in section 1848A(a) in effect, 
the update under subparagraph (A) for a year 
beginning with 2019 shall be adjusted by the 
applicable quality adjustment determined under 
subsection (q)(3) for the year involved.’’; and 
(B) in subsection (i)(1)— 
(i) by striking ‘‘and’’ at the end of 
subparagraph (D); 
(ii) by striking the period at the end 
of subparagraph (E) and inserting ‘‘, 
and’’; and 
(iii) by adding at the end the fol-
lowing new subparagraph: 
‘‘(F) the implementation of subsection 
(q).’’. 
(2) ENHANCING PHYSICIAN QUALITY REPORT-
ING SYSTEM TO SUPPORT QUALITY UPDATE INCEN-
TIVE PROGRAM.—Section 1848 of the Social Secu-
rity Act (42 U.S.C. 1395w–4) is amended— 
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(A) in subsection (k)(1), in the first sen-
tence, by inserting ‘‘and, if applicable, clinical 
practice improvement activities,’’ after ‘‘quality 
measures’’; 
(B) in subsection (k)(2)— 
(i) in subparagraph (C)— 
(I) in the subparagraph heading, 
by 
striking 
‘‘AND
SUBSEQUENT 
YEARS’’ and inserting ‘‘THROUGH 
2018’’; and 
(II) in clause (i), by inserting 
‘‘(before 2019)’’ after ‘‘subsequent 
year’’; 
(ii) by redesignating subparagraph 
(D) as subparagraph (E); 
(iii) by inserting after subparagraph 
(C) the following new subparagraph: 
‘‘(D) 
FOR
2019
AND
SUBSEQUENT 
YEARS.—For purposes of reporting data on 
quality measures and, as applicable clinical 
practice improvement activities, for covered pro-
fessional services furnished during the perform-
ance period (as defined in subsection (q)(2)(B)) 
with respect to 2019 and the performance pe-
riod with respect to each subsequent year, sub-
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ject to subsection (q)(1)(D), the quality meas-
ures and clinical practice improvement activities 
specified under this paragraph shall be, with re-
spect to an eligible professional, the quality 
measures and, as applicable, clinical practice 
improvement activities within the final core 
measure set under paragraph (9)(F) applicable 
to the peer cohort of such provider and year in-
volved.’’; and 
(iv) in subparagraph (E), as redesig-
nated by subparagraph (B)(ii) of this para-
graph, by striking ‘‘AND
SUBSEQUENT 
YEARS’’; 
(C) in subsection (k)(3)— 
(i) in the paragraph heading, by strik-
ing ‘‘COVERED
PROFESSIONAL
SERVICES 
AND ELIGIBLE PROFESSIONALS DEFINED’’ 
and inserting ‘‘DEFINITIONS’’; and 
(ii) by adding at the end the following 
new subparagraphs: 
‘‘(C) CLINICAL
PRACTICE
IMPROVEMENT 
ACTIVITIES.—The term ‘clinical practice im-
provement activity’ means an activity that rel-
evant eligible professional organizations and 
other relevant stakeholders identify as improv-
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ing clinical practice or care delivery and that 
the Secretary determines, when effectively exe-
cuted, is likely to result in improved outcomes. 
‘‘(D) ELIGIBLE PROFESSIONAL ORGANIZA-
TION.—The term ‘eligible professional organiza-
tion’ means a professional organization that is 
recognized by the American Board of Medical 
Specialties, American Osteopathic Association, 
American Board of Physician Specialties, or an 
equivalent certification board. 
‘‘(E) PEER COHORT.—The term ‘peer co-
hort’ means a peer cohort identified on the list 
under paragraph (9)(B), as updated under 
clause (ii) of such paragraph.’’; 
(D) in subsection (k)(7), by striking ‘‘ and 
the application of paragraphs (4) and (5)’’ and 
inserting ‘‘, the application of paragraphs (4) 
and (5), and the implementation of paragraph 
(9)’’; 
(E) by adding at the end of subsection (k) 
the following new paragraph: 
‘‘(9) ESTABLISHMENT OF FINAL CORE MEAS-
URE SETS.— 
‘‘(A) IN
GENERAL.—Under the system 
under this subsection— 
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‘‘(i) for each peer cohort identified 
under subparagraph (B) and in accordance 
with this paragraph, there shall be pub-
lished a final core measure set under sub-
paragraph (F), which shall consist of qual-
ity measures and may also consist of clin-
ical practice improvement activities, with 
respect to which eligible professionals shall, 
subject to subsection (m)(3)(C), be as-
sessed for purposes of determining, for 
years beginning with 2019, the quality ad-
justment under subsection (q)(3) applica-
ble to such professionals; and 
‘‘(ii) each eligible professional shall 
self-identify, in accordance with subpara-
graph (B), within such a peer cohort for 
purposes of such assessments. 
‘‘(B) 
PEER
COHORTS.—The 
Secretary 
shall identify (and publish a list of) peer co-
horts by which eligible professionals shall self- 
identify for purposes of this subsection and sub-
section (q) with respect to a performance period 
(as defined in subsection (q)(2)(B)) for a year 
beginning with 2019. For purposes of this sub-
section and subsection (q), the Secretary shall 
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develop one or more peer cohorts for multispe-
cialty groups, each of which shall be included as 
a peer cohort under this subparagraph. Such 
self-identification will be made through such a 
process and at such time as specified under the 
system under this subsection. Such list— 
‘‘(i) shall include, as peer cohorts, 
provider specialties defined by the Amer-
ican Board of Medical Specialties or equiv-
alent certification boards and such other 
cohorts as established under this section in 
order to capture classifications of providers 
across eligible professional organizations 
and other practice areas, groupings, or cat-
egories; and 
‘‘(ii) shall be updated from time to 
time. 
‘‘(C) QUALITY MEASURES FOR CORE MEAS-
URE SETS.— 
‘‘(i) DEVELOPMENT.—Under the sys-
tem under this subsection there shall be es-
tablished a process for the development of 
quality measures under this subparagraph 
for purposes of potential inclusion of such 
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measures in core measure sets under this 
paragraph. Under such process— 
‘‘(I) there shall be coordination, 
to the extent possible, across organi-
zations developing such measures; 
‘‘(II) eligible professional organi-
zations and other relevant stake-
holders may submit best practices and 
clinical practice guidelines for the de-
velopment of quality measures that 
address quality domains (as defined 
under clause (ii)) for potential inclu-
sion in such core measure sets; 
‘‘(III) there is encouraged to be 
developed, as appropriate, meaningful 
outcome measures (or quality of life 
measures in cases for which outcomes 
may not be a valid measurement), 
functional status measures, and pa-
tient experience measures; and 
‘‘(IV) measures developed under 
this clause shall be developed, to the 
extent possible, in accordance with 
best practices and clinical practice 
guidelines. 
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‘‘(ii) QUALITY
DOMAINS.—For pur-
poses of this paragraph, the term ‘quality 
domains’ means at least the following do-
mains: 
‘‘(I) Clinical care. 
‘‘(II) Safety. 
‘‘(III) Care coordination. 
‘‘(IV) Patient and caregiver expe-
rience. 
‘‘(V) Population health and pre-
vention. 
‘‘(D) PROCESS FOR ESTABLISHING CORE 
MEASURE SETS.— 
‘‘(i) IN GENERAL.—Under the system 
under this subsection, for purposes of sub-
paragraph (A), there shall be established a 
process to approve final core measure sets 
under this paragraph for peer cohorts. 
Each such final core measure set shall be 
composed of quality measures (and, as ap-
plicable, clinical practice improvement ac-
tivities) with respect to which eligible pro-
fessionals within such peer cohort shall re-
port under this subsection and be assessed 
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under subsection (q). Such process shall 
provide— 
‘‘(I) for the establishment of cri-
teria, which shall be made publicly 
available before the request is made 
under clause (ii), for selecting such 
measures and activities for potential 
inclusion in such a final core measure 
set; and 
‘‘(II) that all peer cohorts, and to 
the extent practicable all quality do-
mains, are addressed by measures 
and, as applicable, clinical practice 
improvement activities selected to be 
included in a core measure set under 
this paragraph, which may include 
through the use of such a measure or 
clinical practice improvement activity 
that addresses more than one such 
domain or cohort. 
‘‘(ii) SOLICITATION OF PUBLIC INPUT 
ON
QUALITY
MEASURES
AND
CLINICAL 
PRACTICE
IMPROVEMENT
ACTIVITIES.— 
Under the process established under clause 
(i), relevant eligible professional organiza-
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tions and other relevant stakeholders shall 
be requested to identify and submit quality 
measures and clinical practice improve-
ment activities (as defined in paragraph 
(3)(C)) for selection under this paragraph. 
For purposes of the previous sentence, 
measures and activities may be submitted 
regardless of whether such measures were 
previously published in a proposed rule or 
endorsed by an entity with a contract 
under section 1890(a). 
‘‘(E) CORE MEASURE SETS.— 
‘‘(i) IN GENERAL.—Under the process 
established under subparagraph (D)(i), the 
Secretary— 
‘‘(I) shall select, from quality 
measures described in clause (ii) ap-
plicable to a peer cohort, quality 
measures to be included in a core 
measure set for such cohort; 
‘‘(II) shall, to the extent there 
are insufficient quality measures ap-
plicable to a peer cohort to address 
one or more applicable quality do-
mains, select to be included in a core 
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measure set for such cohort such clin-
ical practice improvement activities 
described in clause (ii)(IV) as are 
needed and available to sufficiently 
address such an applicable domain 
with respect to such peer cohort; and 
‘‘(III) may select, to the extent 
determined appropriate, any addi-
tional clinical practice improvement 
activities described in clause (ii)(IV) 
applicable to a peer cohort to be in-
cluded in a core measure set for such 
cohort. 
Activities selected under this paragraph 
shall be selected with consideration of best 
practices and clinical practice guidelines 
identified under subparagraph (C)(i)(II). 
‘‘(ii) SOURCES OF QUALITY MEASURES 
AND
CLINICAL
PRACTICE
IMPROVEMENT 
ACTIVITIES.—A quality measure or clinical 
practice improvement activity selected for 
inclusion in a core measure set under the 
process under subparagraph (D)(i) shall 
be— 
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‘‘(I) a measure endorsed by a 
consensus-based entity; 
‘‘(II) a measure developed under 
paragraph (2)(C) or a measure other-
wise applied or developed for a similar 
purpose under this section; 
‘‘(III) a measure developed under 
subparagraph (C); or 
‘‘(IV) a measure or activity sub-
mitted under subparagraph (D)(ii). 
A measure or activity may be selected 
under this subparagraph, regardless of 
whether such measure or activity was pre-
viously published in a proposed rule. A 
measure so selected shall be evidence-based 
but (other than a measure described in 
subclause (I)) shall not be required to be 
consensus-based. 
‘‘(iii) TRANSPARENCY.—Before pub-
lishing in a final regulation a core measure 
set under clause (i) as a final core measure 
set under subparagraph (F), the Secretary 
shall— 
‘‘(I) submit for publication in ap-
plicable specialty-appropriate peer-re-
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viewed journals such core measure set 
under clause (i) and the method for 
developing and selecting measures 
within such set, including clinical and 
other data supporting such measures, 
and, as applicable, the method for se-
lecting clinical practice improvement 
activities included within such set; 
and 
‘‘(II) regardless of whether or not 
the core measure set or method is 
published in such a journal under sub-
clause (I), provide for notice of the 
proposed regulation in the Federal 
Register, including with respect to the 
applicable methods and data described 
in subclause (I), and a period for pub-
lic comment thereon. 
‘‘(F) FINAL
CORE
MEASURE
SETS.—Not 
later than November 15 of the year prior to the 
first day of a performance period, the Secretary 
shall publish a final regulation in the Federal 
Register that includes a final core measure set 
(and the applicable methods and data described 
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in subparagraph (E)(iii)(I)) for each peer co-
hort to be applied for such performance period. 
‘‘(G) PERIODIC REVIEW AND UPDATES.— 
‘‘(i) IN
GENERAL.—In carrying out 
this paragraph, under the system under 
this subsection, there shall periodically be 
reviewed— 
‘‘(I) the quality measures and 
clinical practice improvement activities 
selected for inclusion in final core 
measure sets under this paragraph for 
each year such measures and activi-
ties are to be applied under this sub-
section or subsection (q) to ensure 
that such measures and activities con-
tinue to meet the conditions applicable 
to such measures and activities for 
such selection; and 
‘‘(II) the final core measure sets 
published under subparagraph (F) for 
each year such sets are to be applied 
to peer cohorts of eligible profes-
sionals to ensure that each applicable 
set continues to meet the conditions 
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applicable to such sets before being so 
published. 
‘‘(ii) COLLABORATION
WITH
STAKE-
HOLDERS.—In carrying out clause (i), rel-
evant eligible professional organizations 
and other relevant stakeholders may iden-
tify and submit updates to quality meas-
ures and clinical practice improvement ac-
tivities selected under this paragraph for 
inclusion in final core measure sets as well 
as any additional quality measures and 
clinical practice improvement activities. 
Not later than November 15 of the year 
prior to the first day of a performance pe-
riod, submissions under this clause shall be 
reviewed. 
‘‘(iii) ADDITIONAL, AND UPDATES TO, 
MEASURES
AND
ACTIVITIES.—Based on 
the review conducted under this subpara-
graph for a period, as needed, there shall 
be— 
‘‘(I) selected additional, and up-
dates to, quality measures and clinical 
practice improvement activities se-
lected under this paragraph for poten-
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tial inclusion in final core measure 
sets in the same manner such quality 
measures and clinical practice im-
provement 
activities 
are 
selected 
under this paragraph for such poten-
tial inclusion; 
‘‘(II) removed, from final core 
measure sets, quality measures and 
clinical practice improvement activities 
that are no longer meaningful; and 
‘‘(III) updated final core measure 
sets published under subparagraph 
(F) in the same manner as such sets 
are approved under such subpara-
graph. 
For purposes of this subsection and sub-
section (q), a final core measure set, as up-
dated under this subparagraph, shall be 
treated in the same manner as a final core 
measure set published under subparagraph 
(F). 
‘‘(iv) TRANSPARENCY.— 
‘‘(I) NOTIFICATION
REQUIRED 
FOR CERTAIN UPDATES.—In the case 
of an update under subclause (II) or 
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(III) of clause (iii) that adds, materi-
ally changes, or removes a measure or 
activity from a measure set, such up-
date shall not apply under this sub-
section or subsection (q) unless notifi-
cation of such update is made avail-
able to applicable eligible profes-
sionals. 
‘‘(II) PUBLIC
AVAILABILITY
OF 
UPDATED
FINAL
CORE
MEASURE 
SETS.—Subparagraph (E)(iii) shall 
apply with respect to measure sets up-
dated under subclause (II) or (III) of 
clause (iii) in the same manner as 
such subparagraph applies to applica-
ble core measure sets under subpara-
graph (E). 
‘‘(H) COORDINATION WITH EXISTING PRO-
GRAMS.—The development and selection of 
quality measures and clinical practice improve-
ment activities under this paragraph shall, as 
appropriate, be coordinated with the develop-
ment and selection of existing measures and re-
quirements, such as the development of the 
Physician Compare Website under subsection 
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(m)(5)(G) and the application of resource use 
management under subsection (n). To the ex-
tent feasible, such measures and activities shall 
align with measures used by other payers and 
with measures and activities in use under other 
programs in order to streamline the process of 
such development and selection under this para-
graph. The Secretary shall develop a plan to in-
tegrate reporting on quality measures under 
this subsection with reporting requirements 
under subsection (o) relating to the meaningful 
use of certified EHR technology. 
‘‘(I) CONSULTATION WITH RELEVANT ELI-
GIBLE
PROFESSIONAL
ORGANIZATIONS
AND 
OTHER
RELEVANT
STAKEHOLDERS.—Relevant 
eligible professional organizations (as defined in 
paragraph (3)(D)) and other relevant stake-
holders, including State and national medical 
societies, shall be consulted in carrying out this 
paragraph. 
‘‘(J) OPTIONAL APPLICATION.—The proc-
ess under section 1890A is not required to 
apply to the development or selection of meas-
ures under this paragraph.’’; and 
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(F) in subsection (m)(3)(C)(i), by adding 
at the end the following new sentence: ‘‘Such 
process shall, beginning for 2019, treat eligible 
professionals in such a group practice as report-
ing on measures for purposes of application of 
subsections (q) and (a)(8)(A)(iii) if, in lieu of 
reporting measures under subsection (k)(2)(D), 
the group practice reports measures determined 
appropriate by the Secretary.’’. 
(3) ESTABLISHMENT OF QUALITY UPDATE IN-
CENTIVE PROGRAM.— 
(A) IN GENERAL.—Section 1848 of the So-
cial Security Act (42 U.S.C. 1395w–4) is 
amended by adding at the end the following 
new subsection: 
‘‘(q) QUALITY UPDATE INCENTIVE PROGRAM.— 
‘‘(1) ESTABLISHMENT.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
establish an eligible professional quality update 
incentive program (in this section referred to as 
the ‘quality update incentive program’) under 
which— 
‘‘(i) there is developed and applied, in 
accordance with paragraph (2), appro-
priate methodologies for assessing the per-
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formance of eligible professionals with re-
spect to quality measures and clinical prac-
tice improvement activities included within 
the final core measure sets published under 
subsection (k)(9)(F) applicable to the peer 
cohorts of such providers; 
‘‘(ii) there is applied, consistent with 
the system under subsection (k), methods 
for collecting information needed for such 
assessments (which shall involve the min-
imum amount of administrative burden re-
quired to ensure reliable results); and 
‘‘(iii) the applicable update adjust-
ments under paragraph (3) are determined 
by such assessments. 
‘‘(B) DEFINITIONS.— 
‘‘(i) 
ELIGIBLE
PROFESSIONAL.—In 
this subsection, the term ‘eligible profes-
sional’ has the meaning given such term in 
subsection (k)(3), except that such term 
shall not include a professional who has a 
payment arrangement described in section 
1848A(a)(1) in effect. 
‘‘(ii) PEER COHORTS; CLINICAL PRAC-
TICE IMPROVEMENT ACTIVITIES; ELIGIBLE 
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PROFESSIONAL
ORGANIZATIONS.—In this 
subsection, the terms ‘peer cohort’, ‘clinical 
practice improvement activity’, and ‘eligible 
professional organization’ have the mean-
ings given such terms in subsection (k)(3). 
‘‘(C) CONSULTATION WITH ELIGIBLE PRO-
FESSIONAL ORGANIZATIONS AND OTHER REL-
EVANT
STAKEHOLDERS.—Eligible professional 
organizations and other relevant stakeholders, 
including State and national medical societies, 
shall be consulted in carrying out this sub-
section. 
‘‘(D) APPLICATION
AT
GROUP
PRACTICE 
LEVEL.—The Secretary shall establish a proc-
ess, consistent with subsection (m)(3)(C), under 
which the provisions of this subsection are ap-
plied to eligible professionals in a group prac-
tice if the group practice reports measures de-
termined appropriate by the Secretary under 
such subsection. 
‘‘(E) COORDINATION WITH EXISTING PRO-
GRAMS.—The application of measures and clin-
ical practice improvement activities and assess-
ment of performance under this subsection 
shall, as appropriate, be coordinated with the 
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application of measures and assessment of per-
formance under other provisions of this section. 
‘‘(2) ASSESSING PERFORMANCE WITH RESPECT 
TO FINAL CORE MEASURE SETS FOR APPLICABLE 
PEER COHORTS.— 
‘‘(A) ESTABLISHMENT OF METHODS FOR 
ASSESSMENT.— 
‘‘(i) IN GENERAL.—Under the quality 
update incentive program, the Secretary 
shall— 
‘‘(I) establish one or more meth-
ods, applicable with respect to a per-
formance period, to assess (using a 
scoring scale of 0 to 100) the per-
formance of an eligible professional 
with respect to, subject to paragraph 
(1)(D), quality measures and clinical 
practice improvement activities in-
cluded within the final core measure 
set 
published 
under 
subsection 
(k)(9)(F) applicable for the period to 
the peer cohort in which the provider 
self-identified 
under 
subsection 
(k)(9)(B) for such period; and 
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‘‘(II) based on the type or cat-
egory of measure or activity; and 
‘‘(III) based on the extent to 
which a quality measure or clinical 
practice improvement activity mean-
ingfully assesses quality. 
‘‘(iv) RISK
ADJUSTMENT.—Such a 
method shall provide for appropriate risk 
adjustments. 
‘‘(v) 
INCORPORATION
OF
OTHER 
METHODS
OF
MEASURING
PHYSICIAN 
QUALITY.—In establishing such methods, 
there shall be, as appropriate, incorporated 
comparable methods of measurement from 
physician quality incentive programs under 
this subsection. 
‘‘(B) PERFORMANCE PERIOD.—There shall 
be established a period (in this subsection re-
ferred to as a ‘performance period’), with re-
spect to a year (beginning with 2019) for which 
the quality adjustment is applied under para-
graph (3), to assess performance on quality 
measures and clinical practice improvement ac-
tivities. Each such performance period shall be 
a period of 12 consecutive months and shall end 
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as close as possible to the beginning of the year 
for which such adjustment is applied. 
‘‘(3) QUALITY ADJUSTMENT TAKING INTO AC-
COUNT QUALITY ASSESSMENTS.— 
‘‘(A) QUALITY
ADJUSTMENT.—For pur-
poses of subsection (d)(16), if the composite 
score computed under paragraph (2)(A) for an 
eligible professional for a year (beginning with 
2019) is— 
‘‘(i) a score of 67 or higher, the qual-
ity adjustment under this paragraph for 
the eligible professional and year is 1 per-
centage point; 
‘‘(ii) a score of at least 34, but below 
67, the quality adjustment under this 
paragraph for the eligible professional and 
year is zero; or 
‘‘(iii) a score below 34, the quality ad-
justment under this paragraph for the eli-
gible professional and year is ¥1 percent-
age point. 
‘‘(B) NO EFFECT ON SUBSEQUENT YEARS’ 
QUALITY
ADJUSTMENTS.—Each such quality 
adjustment shall be made each year without re-
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gard to the update adjustment for a previous 
year under this paragraph. 
‘‘(4) TRANSITION FOR NEW ELIGIBLE PROFES-
SIONALS.—In the case of a physician, practitioner, 
or other supplier that during a performance period, 
with respect to a year for which a quality adjust-
ment is applied under paragraph (3), first becomes 
an eligible professional (and had not previously sub-
mitted claims under this title as a person, as an en-
tity, or as part of a physician group or under a dif-
ferent billing number or tax identifier), the quality 
adjustment under this subsection applicable to such 
physician, practitioner, or supplier— 
‘‘(A) for such year, with respect to such 
first performance period, shall be zero; and 
‘‘(B) for a year, with respect to a subse-
quent performance period, shall be the quality 
adjustment that would otherwise be applied 
under this subsection. 
‘‘(5) FEEDBACK.— 
‘‘(A) FEEDBACK.— 
‘‘(i) ONGOING FEEDBACK.—Under the 
process under subsection (m)(5)(H), there 
shall be provided, as real time as possible, 
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but at least quarterly, to each eligible pro-
fessional feedback— 
‘‘(I) on the performance of such 
provider with respect to quality meas-
ures and clinical practice improvement 
activities within the final core meas-
ure set published under subsection 
(k)(9)(F) for the applicable perform-
ance period and the peer cohort of 
such professional; and 
‘‘(II) to assess the progress of 
such professional under the quality 
update incentive program with respect 
to a performance period for a year. 
‘‘(ii) USE OF REGISTRIES AND OTHER 
MECHANISMS.—Feedback under this sub-
paragraph shall, to the extent an eligible 
professional chooses to participate in a 
data registry for purposes of this sub-
section (including registries under sub-
sections (k) and (m)), be provided and 
based on performance received through the 
use of such registry, and to the extent that 
an eligible professional chooses not to par-
ticipate in such a registry for such pur-
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poses, be provided through other similar 
mechanisms that allow for the provision of 
such feedback and receipt of such perform-
ance information. 
‘‘(B) DATA MECHANISM.—Under the qual-
ity update incentive program, there shall be de-
veloped an electronic interactive eligible profes-
sional mechanism through which such a profes-
sional may receive performance data, including 
data with respect to performance on the meas-
ures and activities developed and selected under 
this section. Such mechanism shall be developed 
in consultation with private payers and health 
insurance 
issuers 
(as 
defined 
in 
section 
2791(b)(2) of the Public Health Service Act) as 
appropriate. 
‘‘(C) TRANSFER
OF
FUNDS.—The Sec-
retary shall provide for the transfer of 
$100,000,000 from the Federal Supplementary 
Medical Insurance Trust Fund established in 
section 1841 to the Center for Medicare & Med-
icaid Services Program Management Account to 
support such efforts to develop the infrastruc-
ture as necessary to carry out subsection (k)(9) 
and this subsection and for purposes of section 
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1889(h). Such funds shall be so transferred on 
the date of the enactment of this subsection 
and shall remain available until expended.’’. 
(B) INCENTIVE TO REPORT UNDER QUAL-
ITY
UPDATE
INCENTIVE
PROGRAM.—Section 
1848(a)(8)(A) of the Social Security Act (42 
U.S.C. 1395w–4(a)(8)(A)) is amended— 
(i) in clause (i), by striking ‘‘With re-
spect to’’ and inserting ‘‘Subject to clause 
(iii), with respect to’’; and 
(ii) by adding at the end the following 
new clause: 
‘‘(iii) APPLICATION TO ELIGIBLE PRO-
FESSIONALS
NOT
REPORTING.—With re-
spect to covered professional services (as 
defined in subsection (k)(3)) furnished by 
an eligible professional during 2019 or any 
subsequent year, if the eligible professional 
does not submit data for the performance 
period (as defined in subsection (q)(2)(B)) 
with respect to such year on, subject to 
subsection (q)(1)(D), the quality measures 
and, as applicable, clinical practice im-
provement activities within the final core 
measure set under subsection (k)(9)(F) ap-
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plicable to the peer cohort of such pro-
vider, the fee schedule amount for such 
services furnished by such professional 
during the year (including the fee schedule 
amount for purposes of determining a pay-
ment based on such amount) shall be equal 
to 95 percent (in lieu of the applicable per-
cent) of the fee schedule amount that 
would otherwise apply to such services 
under this subsection (determined after ap-
plication of paragraphs (3), (5), and (7), 
but without regard to this paragraph). The 
Secretary shall develop a minimum per 
year caseload threshold, with respect to eli-
gible professionals, and the previous sen-
tence shall not apply to eligible profes-
sionals with a caseload for a year below 
such threshold for such year.’’. 
(C) EDUCATION ON QUALITY UPDATE IN-
CENTIVE PROGRAM.—Section 1889 of the Social 
Security Act (42 U.S.C. 1395zz) is amended by 
adding at the end the following new subsection: 
‘‘(h) QUALITY
UPDATE
INCENTIVE
PROGRAM.— 
Under this section, information shall be disseminated to 
educate and assist eligible professionals (as defined in sec-
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tion 1848(k)(3)) about the quality update incentive pro-
gram under section 1848(q) and quality measures under 
section 1848(k)(9) through multiple approaches, including 
a national dissemination strategy and outreach by medi-
care contractors.’’. 
(4) CONFORMING AMENDMENTS.— 
(A) TREATMENT OF SATISFACTORILY RE-
PORTING PQRS MEASURES THROUGH PARTICI-
PATION IN A QUALIFIED CLINICAL DATA REG-
ISTRY.—Section 1848(m)(3)(D) of the Social 
Security Act (42 U.S.C. 1395w–4(m)(3)(D)) is 
amended by striking ‘‘For 2014 and subsequent 
years’’ and inserting ‘‘For each of 2014 
through 2018’’. 
(B) COORDINATING ENHANCED PQRS RE-
PORTING
WITH
EHR.—Section 
1848(o)(2)(B)(iii) of the Social Security Act 
(42 U.S.C. 1395w–4(o)(2)(B)(iii)) is amended 
by striking ‘‘subsection (k)(2)(C)’’ and inserting 
‘‘subparagraph (C) or (D) of subsection 
(k)(2)’’. 
(C) COORDINATING PQRS REPORTING PE-
RIOD WITH QUALITY UPDATE INCENTIVE PRO-
GRAM
PERFORMANCE
PERIOD.—Section 
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1848(m)(6)(C) of the Social Security Act (42 
U.S.C. 1395w–4(m)(6)(C)) is amended— 
(i) in clause (i), by striking ‘‘and (iii)’’ 
and inserting ‘‘, (iii), and (iv)’’; and 
(ii) by adding at the end the following 
new clause: 
‘‘(iv) COORDINATION
WITH
QUALITY 
UPDATE INCENTIVE PROGRAM.—For 2019 
and each subsequent year the reporting pe-
riod shall be coordinated with the perform-
ance period under subsection (q)(2)(B).’’. 
(D) COORDINATING EHR REPORTING WITH 
QUALITY
UPDATE
INCENTIVE
PROGRAM
PER-
FORMANCE PERIOD.—Section 1848(o)(5)(B) of 
the Social Security Act (42 U.S.C. 1395w– 
4(o)(5)(B)) is amended by adding at the end 
the following: ‘‘Beginning for 2019, the EHR 
reporting period shall be coordinated with the 
performance 
period 
under 
subsection 
(q)(2)(B).’’. 
(c) ADVANCING ALTERNATIVE PAYMENT MODELS.— 
(1) IN GENERAL.—Part B of title XVIII of the 
Social Security Act (42 U.S.C. 1395w–4 et seq.) is 
amended by adding at the end the following new sec-
tion: 
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‘‘SEC. 1848A. ADVANCING ALTERNATIVE PAYMENT MODELS. 
‘‘(a) PAYMENT MODEL CHOICE PROGRAM.—Pay-
ment for covered professional services (as defined in sec-
tion 1848(k)) that are furnished by an eligible professional 
(as defined in such section) under an Alternative Payment 
Model specified on the list under subsection (h) (in this 
section referred to as an ‘eligible APM’) shall be made 
under this title in accordance with the payment arrange-
ment under such model. In applying the previous sentence, 
such a professional with such a payment arrangement in 
effect, shall be deemed for purposes of section 1848(a)(8) 
to be satisfactorily submitting data on quality measures 
for such covered professional services. 
‘‘(b) 
PROCESS
FOR
IMPLEMENTING
ELIGIBLE 
APMS.— 
‘‘(1) IN GENERAL.—For purposes of subsection 
(a) and in accordance with this section, the Sec-
retary shall establish a process under which— 
‘‘(A) a contract is entered into, in accord-
ance with paragraph (2); 
‘‘(B) proposals for potential Alternative 
Payment Models are submitted in accordance 
with subsection (c); 
‘‘(C) Alternative Payment Models so pro-
posed are recommended, in accordance with 
subsection (d), for evaluation, including through 
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the demonstration program under subsection 
(e), and approval under subsection (f); 
‘‘(D) applicable Alternative Payment Mod-
els are evaluated under such demonstration pro-
gram; 
‘‘(E) models are implemented as eligible 
APMs in accordance with subsection (f); and 
‘‘(F) a comprehensive list of all eligible 
APMs is made publicly available, in accordance 
with subsection (h), for application under sub-
section (a). 
‘‘(2) CONTRACT WITH APM CONTRACTING ENTI-
TY.— 
‘‘(A) IN GENERAL.—For purposes of para-
graph (1)(A), the Secretary shall identify and 
have in effect a contract with an independent 
entity that has appropriate expertise to carry 
out the functions applicable to such entity 
under this section. Such entity shall be referred 
to in this section as the ‘APM contracting enti-
ty’. 
‘‘(B) TIMING FOR FIRST CONTRACT.—As 
soon as practicable, but not later than one year 
after the date of the enactment of this section, 
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the Secretary shall enter into the first contract 
under subparagraph (A). 
‘‘(C) COMPETITIVE
PROCEDURES.—Com-
petitive procedures (as defined in section 4(5) 
of the Office of Federal Procurement Policy Act 
(41 U.S.C. 403(5))) shall be used to enter into 
a contract under subparagraph (A). 
‘‘(c) SUBMISSION OF PROPOSED ALTERNATIVE PAY-
MENT MODELS.—Beginning not later than 90 days after 
the date the Secretary enters into a contract under sub-
section (b)(2) with the APM contracting entity, physi-
cians, eligible professional organizations, health care pro-
vider organizations, and other entities may submit to the 
APM contracting entity proposals for Alternative Payment 
Models for application under this section. Such a proposal 
of a model shall include suggestions for measures to be 
used under subsection (e)(1)(B) for purposes of evaluating 
such model. In reviewing submissions under this sub-
section for purposes of making recommendations under 
subsection (d)(1), the contracting entity shall focus on 
submissions for such models that are intended to improve 
care coordination and quality for patients through modi-
fying the manner in which physicians and other providers 
are paid under this title. 
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Alternative Payment Model, only if the entity 
determines that the model satisfies each of the 
following criteria: 
‘‘(i) The model has been supported by 
meaningful clinical and non-clinical data, 
with respect to a sufficient population sam-
ple, that indicates the model would be suc-
cessful at addressing each of the abilities 
described in clause (v). 
‘‘(ii)(I) In the case of a model that 
has already been evaluated and supported 
by data with respect to a population of in-
dividuals enrolled under this part, if the 
model were evaluated under the dem-
onstration under subsection (e) such a 
population would represent a sufficient 
number of individuals enrolled under this 
part to ensure meaningful evaluation. 
‘‘(II) In the case of a model that has 
not been so evaluated and supported by 
data with respect to such a population, the 
population that would be furnished services 
under such model if the model were evalu-
ated under the demonstration under sub-
section (e) would represent a sufficient 
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number of individuals enrolled under this 
part to ensure meaningful evaluation. 
‘‘(iii) Such model, including if evalu-
ated under the demonstration under sub-
section (e), would not deny or limit the 
coverage or provision of benefits under this 
title for applicable individuals. 
‘‘(iv) The implementation of such 
model as an eligible APM under this sec-
tion is expected— 
‘‘(I) to reduce spending under 
this title without reducing the quality 
of care; or 
‘‘(II) improve the quality of pa-
tient care without increasing spend-
ing. 
‘‘(v) The proposal for such model 
demonstrates— 
‘‘(I) the potential to successfully 
manage the cost of furnishing items 
and services under this title so as to 
not result in expenditures under this 
title 
for 
individuals 
participating 
under such APM being greater than 
expenditures under this title for such 
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individuals if the APM were not im-
plemented; 
‘‘(II) the ability to maintain or 
improve the overall patient care; and 
‘‘(III) the ability to maintain or 
improve the quality of care provided 
to individuals enrolled under this part 
who participate under such mode. 
‘‘(vi) The model provides for a pay-
ment arrangement— 
‘‘(I) covering at least items and 
services furnished under this part by 
eligible professionals participating in 
the model; 
‘‘(II) in the case such payment 
arrangement does not provide for pay-
ment under the fee schedule under 
section 1848 for such items and serv-
ices furnished by such eligible profes-
sionals, that provides for a payment 
adjustment based on meaningful EHR 
use comparable to such adjustment 
that would otherwise apply under sec-
tion 1848; and 
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‘‘(III) that provides for a pay-
ment adjustment based on quality 
measures comparable to such adjust-
ment that would otherwise apply 
under section 1848. 
‘‘(C) CRITERIA FOR RECOMMENDING MOD-
ELS
FOR
APPROVAL
WITHOUT
EVALUATION 
UNDER
DEMONSTRATION.—The 
APM 
con-
tracting entity may make a recommendation 
under subparagraph (A)(ii), with respect to an 
Alternative Payment Model, only if the entity 
determines that the model has already been 
evaluated for a sufficient enough period and 
through such evaluation the model was shown— 
‘‘(i) to have satisfied the criteria de-
scribed in each of clauses (i), (ii), (iii), and 
(vi) of subparagraph (B); 
‘‘(ii) to demonstrate each of the abili-
ties described in clause (v) of such sub-
paragraph; and 
‘‘(iii)(I) to reduce spending under this 
title without reducing the quality of care; 
or 
‘‘(II) improve the quality of patient 
care without increasing spending. 
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‘‘(D) 
TRANSPARENCY
AND
DISCLO-
SURES.— 
‘‘(i) DISCLOSURES.—Not later than 
90 days after receipt of a submission of a 
model under subsection (c) by an entity, 
the APM contracting entity shall submit to 
the Secretary and such entity and make 
publicly available a notification on whether 
or not, and if so how, the model meets cri-
teria for recommending such model under 
subparagraph (A), including whether or 
not such model requires a waiver under 
paragraph (2). In the case that the APM 
contracting entity determines not to rec-
ommend such model under this paragraph, 
such notification shall include an expla-
nation of the reasons for not making such 
a recommendation. Any information made 
publicly available pursuant to the previous 
sentence shall not include proprietary data. 
‘‘(ii) SUBMISSION OF RECOMMENDED 
MODELS.—The APM contracting entity 
shall at least quarterly submit to the Sec-
retary, the Medicare Payment Advisory 
Commission, and the Chief Actuary of the 
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Centers for Medicare & Medicaid Services 
the following: 
‘‘(I) The models recommended 
under subparagraph (A)(i), including 
any such models that require a waiver 
under paragraph (2), and the data 
and analyses on such recommended 
models that support the criteria de-
scribed in subparagraph (B). 
‘‘(II) The models recommended 
under subparagraph (A)(ii), including 
any such models that require a waiver 
under paragraph (2), and the data 
and analyses on such recommended 
models that support the criteria de-
scribed in subparagraph (C). 
For any year beginning with 2015 that the 
APM contracting does not recommend any 
models under subparagraph (A), the entity 
shall instead satisfy this clause by submit-
ting to the Secretary and making publicly 
available an explanation for not having any 
such recommendations. 
‘‘(2) MODELS REQUIRING WAIVER APPROVAL.— 
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‘‘(A) IN GENERAL.—In the case that an 
Alternative Payment Model recommended under 
paragraph (1)(A)(i) would require a waiver 
from any requirement under this title, in deter-
mining approval of such model, the Secretary 
may make such a waiver in order for such 
model to be evaluated under the demonstration 
program (if described in clause (i) of such para-
graph). 
‘‘(B) APPROVAL.—Not later than 90 days 
after the date of the receipt of such submission 
for a model, the Secretary shall notify the APM 
contracting entity and the entity submitting 
such model under subsection (c) whether or not 
such a waiver for such model is provided and 
the reason for any denial of such a waiver. 
‘‘(e) DEMONSTRATION.— 
‘‘(1) IN GENERAL.—Subject to paragraphs (5), 
(6), and (7), the Secretary may conduct a dem-
onstration program, with respect to an Alternative 
Payment Model approved under paragraph (2), 
under which participating entities shall be paid 
under this title in accordance with the payment ar-
rangement under such model and such model shall 
be evaluated by the independent evaluation entity 
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under paragraph (3). The duration of a demonstra-
tion program under this subsection, with respect to 
such a model, shall be 3 years (or a shorter period, 
taking into account the applicable recommendation 
under subsection (d)(1)(A)(i)). 
‘‘(2) APPROVAL
BY
SECRETARY
OF
MODELS 
FOR
DEMONSTRATION.—Not later than 90 days 
after the date of receipt of a recommendation under 
subsection (d)(1)(A)(i), with respect to an Alter-
native Payment Model, the Secretary shall approve 
such model for a demonstration program under this 
subsection only if the Secretary determines the 
model satisfies the criteria described in subsection 
(d)(1)(B). The Secretary shall periodically make a 
available a list of such models so approved. 
‘‘(3) PARTICIPATING ENTITIES.—To participate 
under a demonstration program under this sub-
section, with respect to an Alternative Payment 
Model, a physician, practitioner, or other supplier 
shall enter into a contract with the Administrator of 
the Centers for Medicare & Medicaid Services under 
this subsection. For purposes of this section, such a 
physician, practitioner, or supplier who so partici-
pates under such an Alternative Payment Model 
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shall be referred to as a ‘participating APM pro-
vider’. 
‘‘(4) REPORTING AND EVALUATION.— 
‘‘(A) INDEPENDENT
EVALUATION
ENTI-
TY.—Under this subsection, the Secretary shall 
enter into a contract with an independent entity 
to evaluate Alternative Payment Models under 
demonstration programs under this subsection 
based on appropriate measures specified under 
subparagraph (B). In this section, such entity 
shall be referred to as the ‘independent evalua-
tion entity’. Such contract shall be entered into 
in a timely manner so as to ensure evaluation 
of an Alternative Payment Model under a dem-
onstration program under this subsection may 
begin as soon as possible after the model is ap-
proved under paragraph (2). 
‘‘(B) 
PERFORMANCE
MEASURES.—For 
purposes of this subsection, the Secretary shall 
specify— 
‘‘(i) measures to evaluate Alternative 
Payment Models under demonstration pro-
grams under this subsection, which may 
include measures suggested under sub-
section (c) and shall be sufficient to allow 
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for a comprehensive assessment of such a 
model; and 
‘‘(ii) quality measures on which par-
ticipating entities shall report, which shall 
be similar to measures applicable under 
section 1848(k). 
‘‘(C) REPORTING REQUIREMENTS.—A con-
tract entered into with a participating APM 
provider under paragraph (3) shall require such 
provider to report on appropriate measures 
specified under subparagraph (B). 
‘‘(D) 
PERIODIC
REVIEW.—The 
inde-
pendent evaluation entity shall periodically re-
view and analyze and submit such analysis to 
the Secretary and the participating entities in-
volved data reported under subparagraph (C) 
and such other data as deemed necessary to 
evaluate the model. 
‘‘(E) FINAL EVALUATION.—Not later than 
6 months after the date of completion of a dem-
onstration program, the independent evaluation 
entity shall submit to the Secretary, the Medi-
care Payment Advisory Commission, and the 
Chief Actuary of the Centers for Medicare & 
Medicaid Services (and make publicly available) 
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a report on each model evaluated under such 
program. Such report shall include— 
‘‘(i) outcomes on the clinical and 
claims data received through such program 
with respect to such model; 
‘‘(ii) recommendations on— 
‘‘(I) whether or not such model 
should be implemented as an eligible 
APM under this section; or 
‘‘(II) whether or not the evalua-
tion of such model under the dem-
onstration program should be ex-
tended or expanded; 
‘‘(iii) the justification for each such 
recommendation described in clause (ii); 
and 
‘‘(iv) in the case of a recommendation 
to implement such model as an eligible 
APM, recommendations on standardized 
rules for purposes of such implementation. 
‘‘(5) APPROVAL
OF
EXTENDING
EVALUATION 
UNDER DEMONSTRATION.—Not later than 90 days 
after the date of receipt of a submission under para-
graph (4)(E), the Secretary shall, including based on 
a recommendation submitted under such paragraph, 
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determine whether an Alternative Payment Model 
may be extended or expanded under the demonstra-
tion program. 
‘‘(6) TERMINATION.—The Secretary shall ter-
minate a demonstration program for a model under 
this subsection unless the Secretary determines (and 
the Chief Actuary of the Centers for Medicare & 
Medicaid Services, with respect to program spending 
under this title, certifies), after testing has begun, 
that the model is expected to— 
‘‘(A) improve the quality of care (as deter-
mined by the Administrator of the Centers for 
Medicare & Medicaid Services) without increas-
ing spending under this title; 
‘‘(B) reduce spending under this title with-
out reducing the quality of care; or 
‘‘(C) improve the quality of care and re-
duce spending. 
Such termination may occur at any time after such 
testing has begun and before completion of the test-
ing. 
‘‘(7) FUNDING.— 
‘‘(A) IN
GENERAL.—There are appro-
priated, from amounts in the Federal Supple-
mentary Medical Insurance Trust Fund under 
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section 
1841 
not 
otherwise 
appropriated, 
$2,000,000,000 for the purposes described in 
subparagraph (B), of which no more than 2.5 
percent may be used for the purpose described 
in clause (iii) of such subparagraph. Amounts 
transferred under this subparagraph shall be 
available until expended. 
‘‘(B) PURPOSES.—Amounts appropriated 
under subparagraph (A) shall be used for— 
‘‘(i) payments for items and services 
furnished by participating entities under 
an Alternative Payment Model under a 
demonstration program under this sub-
section that— 
‘‘(I) would not otherwise be eligi-
ble for payment under this title; or 
‘‘(II) exceed the amount of pay-
ment that would otherwise be made 
for such items and services under this 
title if such items and services were 
not furnished under such demonstra-
tion program; 
‘‘(ii) the evaluations provided for 
under this section of models under such a 
demonstration program; 
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