‘‘(B) determine the best methodology to re-
port composite quality measures for those areas 
of clinical practice with a limited number of 
specified quality measures, including how to in-
corporate such composite measures in the per-
formance-based payment program under sub-
section (f). 
‘‘(e) PUBLIC REPORTING.— 
‘‘(1) CONTINUATION OF PUBLIC REPORTING RE-
QUIREMENTS.—Procedures established under sub-
clause (VII) of section 1886(b)(3)(B)(viii) for mak-
ing data submitted by a hospital under subclause (I) 
of such section available to the public shall, as modi-
fied by the succeeding provisions of this subsection, 
apply to data required to be submitted under this 
section on all specified quality measures. 
‘‘(2) GENERAL REPORTING REQUIREMENTS.— 
The Secretary shall report quality measures of proc-
ess, structure, outcome, patient perspectives on care, 
efficiency, and costs of care that relate to services 
furnished in inpatient hospital settings on the Hos-
pital Compare Internet website maintained by the 
Department of Health and Human Services. 
‘‘(3) PROMPT DISSEMINATION OF INFORMATION 
ON QUALITY.—The Secretary shall review ways in 
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which information on the quality of inpatient hos-
pital services can be used more effectively by hos-
pitals to increase the quality of patient care and to 
improve performance in the delivery of inpatient hos-
pital services. The Secretary shall provide for the 
dissemination of appropriate and timely quality in-
formation to such hospitals in a manner that most 
effectively contributes to continuous quality improve-
ment by the hospitals. 
‘‘(4) DISSEMINATION
ON
QUALITY
INFORMA-
TION TO PATIENTS.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
make available to the public information on the 
quality of inpatient hospital services provided 
by hospitals to patients in a manner that facili-
tates informed and balanced decision-making by 
patients and physicians. 
‘‘(B) REQUIREMENTS
FOR
COMPARATIVE 
INFORMATION.—Insofar as the Secretary makes 
information on the quality of inpatient hospital 
services provided by hospitals to patients avail-
able for purposes of comparison among hos-
pitals, the Secretary shall only present such in-
formation by specific clinical condition or per-
formance area and may not aggregate results 
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across clinical conditions or performance areas 
or otherwise make available information indi-
cating an overall ranking of hospitals. 
‘‘(5) WEBSITE IMPROVEMENTS.— 
‘‘(A) TAILORED
STANDARD
REPORTS.— 
The Secretary shall develop a series of standard 
Internet website reports tailored to respond to 
the differing needs of hospitals, patients, re-
searchers, policymakers, and such other stake-
holders as the Secretary may identify. The Sec-
retary shall seek input from such stakeholders 
through such means as the Secretary deter-
mines to be most effective, including meetings 
and surveys, to determine the type of informa-
tion that is useful to the various stakeholders 
and the format that best facilitates use of the 
reports and of the Hospital Compare Internet 
website maintained by the Department of 
Health and Human Services. 
‘‘(B) INFORMATION
AND
FORMAT.—The 
Secretary shall modify the Hospital Compare 
Internet website maintained by the Department 
of Health and Human Services to make the use 
and navigation of that website readily available 
to individuals accessing it. The Secretary shall 
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develop a flexible format to meet the differing 
needs of the various stakeholders and shall 
modify the website to permit a user to easily 
customize queries. 
‘‘(f) PERFORMANCE-BASED PAYMENT PROGRAM.— 
‘‘(1) ESTABLISHMENT.—The Secretary shall es-
tablish a program under which performance-based 
payments are made each fiscal year to hospitals that 
provide high quality inpatient hospital services to in-
dividuals who are entitled to benefits under part A 
and who are inpatients of the hospital. The Sec-
retary shall implement the program under this sub-
section so that performance-based payments are 
made to such hospitals in fiscal year 2011 and each 
subsequent fiscal year. 
‘‘(2) ADJUSTMENT
IN
PAYMENT
BASED
ON 
QUALITY PERFORMANCE.— 
‘‘(A) PAYMENT
BASED
ON
PERFORM-
ANCE.— 
‘‘(i) INCREASE IN AMOUNT OF PAY-
MENT
FOR
OPERATING
COSTS
OF
INPA-
TIENT
HOSPITAL
SERVICES.—Subject to 
subparagraph (B), from payment amounts 
reduced by the Secretary for operational 
costs of inpatient hospital services of a 
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hospital 
for 
specified 
diagnosis-related 
groups under section 1886(d)(1)(F)(i) with 
respect to a fiscal year, the Secretary shall 
make a performance-based payment to that 
hospital for such costs for that fiscal year 
in the amount determined under clause (ii) 
and in the manner specified in section 
1886(d)(1)(F)(iv). 
‘‘(ii) METHODOLOGY TO DETERMINE 
THE
AMOUNT
OF
PAYMENT.—The Sec-
retary shall determine the amount of the 
performance-based payment based on the 
hospital’s performance on each specified 
clinical condition or performance area dur-
ing the preceding year to individuals who 
are entitled to benefits under part A and 
are inpatients of the hospital using the 
payment and scoring methodologies con-
tained in the Report to Congress submitted 
by the Centers for Medicare & Medicaid 
Services on November 21, 2007, as modi-
fied by the succeeding provisions of this 
subsection. 
‘‘(B) REQUIREMENT TO SUBMIT DATA.—In 
order for a hospital to be eligible for a perform-
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ance-based payment with respect to a fiscal 
year, the hospital must have complied with the 
requirements under subsection (a)(1) to submit 
data for specified quality measures. 
‘‘(C) MEASURED
CLINICAL
CONDITIONS 
FOR PERFORMANCE-BASED PAYMENTS IN FIS-
CAL YEAR 2011.— 
‘‘(i) CONDITIONS
MEASURED.—With 
respect to performance-based payments 
made to a hospital under this paragraph in 
fiscal year 2011, the Secretary shall meas-
ure quality performance only for the fol-
lowing four specific conditions or clinical 
performance areas: acute myocardial in-
farction (AMI), heart failure, pneumonia, 
and Surgical Care Improvement Project 
(formerly referred to as ‘Surgical Infection 
Prevention’ for discharges occurring before 
July 2006). 
‘‘(ii) MEASURES CITED IN NOVEMBER 
2007
CMS
REPORT
TO
CONGRESS.—In 
measuring quality performance for the con-
ditions specified under clause (i), the Sec-
retary shall use the specified quality meas-
ures identified as initial performance meas-
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ures in the report referred to in subpara-
graph (A)(ii). 
‘‘(iii) 
HCAHPS 
MEASURES
EX-
CLUDED
FROM
INITIAL
PERFORMANCE- 
BASED PAYMENTS.— 
‘‘(I) IN GENERAL.—In measuring 
quality performance under clause (i), 
except as provided in subclause (II), 
the Secretary may not include speci-
fied quality measures with respect to 
the Hospital Consumer Assessment of 
Healthcare Providers and Systems 
Survey (HCAHPS). 
‘‘(II) 
USE
IN
SUBSEQUENT 
YEARS.—Subject 
to 
subparagraph 
(D)(ii), the Secretary shall collect 
data on measures relating to assess-
ment of care by consumers and make 
refinements to such measures for use 
in measuring performance for fiscal 
years after fiscal year 2011 for per-
formance-based payments under this 
paragraph. 
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‘‘(iv) 30-DAY
MORTALITY
MEASURES 
EXCLUDED FROM INITIAL PERFORMANCE- 
BASED PAYMENTS.— 
‘‘(I) IN GENERAL.—In measuring 
quality performance under clause (i), 
except as provided in subclause (II), 
the Secretary may not include speci-
fied quality measures with respect to 
mortality. 
‘‘(II) 
USE
IN
SUBSEQUENT 
YEARS.—Subject 
to 
subparagraph 
(D)(ii), the Secretary may include 
specified quality measures with re-
spect to 30-day mortality rates for use 
in measuring performance for fiscal 
years after fiscal year 2011 for per-
formance-based payments under this 
paragraph insofar as the Secretary es-
tablishes a mechanism for hospitals to 
receive timely information from the 
Secretary to enable hospitals to evalu-
ate performance on such measures. 
‘‘(D) MEASURED
CLINICAL
CONDITIONS 
AND PERFORMANCE AREAS FOR FISCAL YEARS 
AFTER FISCAL YEAR 2011.— 
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‘‘(i) IN GENERAL.—Subject to clause 
(ii), with respect to performance-based 
payments made to a hospital under this 
paragraph during a fiscal year after fiscal 
year 2011, the Secretary may expand the 
specified quality measures used in meas-
uring performance under subparagraph (C) 
for performance-based payments under this 
paragraph for fiscal year 2011. 
‘‘(ii) REQUIREMENT FOR NOTICE AND 
COMMENT
RULEMAKING.—The Secretary 
may only exercise the authority under 
clause (i) by regulation, after notice of the 
proposed regulation in the Federal Reg-
ister and a period of not less than 60 days 
for public comment thereon. 
‘‘(E) ADVANCE PUBLICATION OF FULL-IN-
CENTIVE
BENCHMARKS.—The Secretary shall 
provide for the publication of full-incentive 
quality benchmarks (determined under para-
graph (4)(C)) sufficiently in advance of a fiscal 
year so that hospitals may make such changes 
as are required to meet full-incentive quality 
benchmarks applicable during the fiscal year in-
volved, and in no case shall the publication of 
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the full-incentive quality benchmark be later 
than two years before the start of the fiscal 
year involved. 
‘‘(3) DETERMINATION OF HOSPITAL PERFORM-
ANCE.— 
‘‘(A) METHODOLOGY
FOR
SCORES.—The 
Secretary shall evaluate the performance of 
each hospital for the purpose of determining 
performance-based payments under paragraph 
(2). Subject to subparagraph (B), the Secretary 
shall determine a set of performance scores for 
each such hospital based on the performance 
scoring methodology described in the report re-
ferred to in paragraph (2)(A)(ii). 
‘‘(B) CALCULATION OF SEPARATE SCORES 
BY
CLINICAL
CONDITION
OR
PERFORMANCE 
AREA.—The Secretary shall calculate composite 
performance scores separately for each specified 
clinical condition or performance area. The Sec-
retary may not calculate a single overall per-
formance score for each hospital. 
‘‘(C) CONSIDERATION
OF
RESULTS
AND 
IMPROVEMENT.—In 
calculating 
performance 
scores for each specified quality measure for 
each specified clinical condition or performance 
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area, the Secretary shall determine a score for 
both the performance level attained by the hos-
pital and the degree of improvement of the per-
formance of the hospital. The final score for 
each such measure shall be equal to the greater 
of such attainment or such degree of improve-
ment on the measure. 
‘‘(D) EQUAL
WEIGHT
FOR
INDIVIDUAL 
MEASURES.—In calculating a composite per-
formance score for each specified clinical condi-
tion or performance area, the Secretary shall 
weight equally the individual specified quality 
measures involved in assessing performance for 
such clinical condition or area. 
‘‘(E) REQUIREMENT
FOR
NOTICE
AND 
COMMENT RULEMAKING.—The Secretary shall 
describe in detail the methodology to be used to 
calculate performance scores under this sub-
paragraph by regulation, after notice of the pro-
posed regulation in the Federal Register and a 
period of not less than 60 days for public com-
ment thereon. 
‘‘(4) CALCULATION
OF
PERFORMANCE-BASED 
PAYMENT AMOUNT.— 
‘‘(A) METHODOLOGY.— 
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‘‘(i) REPORT PROPOSAL.—Subject to 
the succeeding provisions of this sub-
section, the Secretary shall calculate the 
amount of performance-based payment 
under paragraph (2) for a hospital by con-
verting performance scores of a hospital to 
a payment amount for that hospital using 
the methodology contained in the report 
referred to in paragraph (2)(A)(ii). 
‘‘(ii) REQUIREMENT FOR NOTICE AND 
COMMENT
RULEMAKING.—The Secretary 
shall describe in detail the methodology to 
be used to calculate the amount of per-
formance-based payment under paragraph 
(2) by regulation, after notice of the pro-
posed regulation in the Federal Register 
and a period of not less than 60 days for 
public comment thereon. 
‘‘(B) MINIMUM THRESHOLD.— 
‘‘(i) IN
GENERAL.—The Secretary 
shall establish a performance threshold for 
a fiscal year of zero for all specified clinical 
conditions or performance areas. 
‘‘(ii) PERFORMANCE
THRESHOLD.— 
No amount of performance-based payment 
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under paragraph (2) for a fiscal year may 
be made to a hospital unless the perform-
ance score of that hospital with respect a 
specified clinical condition or performance 
area during the preceding fiscal year ex-
ceeds the performance threshold estab-
lished under clause (i). 
‘‘(C) FULL-INCENTIVE
QUALITY
BENCH-
MARK.— 
‘‘(i) IN
GENERAL.—The Secretary 
shall determine for each fiscal year a per-
formance level for each clinical condition or 
performance area under a quality bench-
mark which, if met by a hospital, would 
qualify the hospital to receive 100 percent 
of the performance-based payment amount 
available under paragraph (2) for the asso-
ciated diagnosis-related groups. 
‘‘(ii) DETERMINATION OF LEVELS.— 
‘‘(I) INITIAL
LEVEL.—The per-
formance level referred to in clause (i) 
shall be initially set at a level that the 
Secretary determines that all hospitals 
can reasonably achieve. 
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‘‘(II) MODIFICATION
OF
LEV-
ELS.—The Secretary may revise the 
performance level set under subclause 
(I) to a higher level from time to time 
as hospital performance improves. 
‘‘(iii) CONSIDERATIONS
IN
SETTING 
LEVELS.—In determining such perform-
ance level, the Secretary shall take into ac-
count practical experience with specified 
quality measures involved, historical per-
formance levels, improvement rates, the 
opportunity for continued improvement, 
and the results of the review of bench-
marks conducted under paragraph (5). 
‘‘(5) REVIEW AND MODIFICATION OF BENCH-
MARKS.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
reevaluate a quality benchmark established 
under this subsection if the Secretary deter-
mines with respect to a fiscal year that a sig-
nificant proportion of hospitals failed to meet 
the benchmark. The Secretary shall determine 
whether extenuating circumstances, such as 
measure definition changes, prevented hospitals 
from meeting the benchmark. 
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‘‘(B) MODIFICATION FOR PERFORMANCE- 
BASED PAYMENTS.—The Secretary may make 
modifications to a benchmark described in sub-
paragraph (A), as applied to measure hospital 
performance in a fiscal year, and reassess such 
hospital performance in that fiscal year using 
such modified benchmark for purposes of calcu-
lating the amount of performance-based-pay-
ment under paragraph (2). 
‘‘(6) BUDGET NEUTRALITY FOR PAYMENTS.— 
‘‘(A) REQUIREMENT
FOR
BUDGET
NEU-
TRALITY.—The aggregate amount available for 
performance-based payments to hospitals under 
paragraph (2) with respect to a fiscal year may 
not exceed the aggregate amount of reductions 
described in subsection (g)(1) for the fiscal year 
and such performance-based payments shall be 
designed in a manner so that the aggregate of 
such payments for a fiscal year is equal to the 
aggregate amount of such reductions for the 
fiscal year. 
‘‘(B) METHOD
AND
TIMING.—Perform-
ance-based payments to hospitals under this 
subsection shall be made from the Federal Hos-
pital Insurance Trust Fund under section 1817. 
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Performance-based payments shall be made to a 
hospital under this subsection with respect to a 
fiscal year based on quality performance for the 
12-month period ending June 30th of the prior 
fiscal year. 
‘‘(7) PERFORMANCE-BASED
BONUS
PAYMENT 
FOR HIGHEST PERFORMING HOSPITALS.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
establish a program to reward those hospitals 
with high performance scores, as determined by 
the Secretary, in a fiscal year through the mak-
ing of performance-based bonus payments. 
‘‘(B) ADDITIONAL
PAYMENT.—Perform-
ance-based bonus payments made under the 
program established in subparagraph (A) in a 
fiscal year shall be in addition to performance- 
based payments made under paragraph (2) in 
that fiscal year. 
‘‘(C) 
DETERMINATION
OF
PAYMENT 
AMOUNT.—Performance-based bonus payments 
under the program established in subparagraph 
(A) shall be made in such amount as the Sec-
retary determines to be appropriate. 
‘‘(D) REQUIRED AGGREGATE AMOUNT OF 
PAYMENTS.—The Secretary shall make aggre-
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gate payments in a fiscal year under the per-
formance-based bonus payment program estab-
lished in subparagraph (A) in an amount equal 
to the difference between the aggregate amount 
of reductions under section 1886(d)(1)(F)(i) for 
the fiscal year involved and the aggregate 
amount of performance-based payments made 
under paragraph (2) for such fiscal year. 
‘‘(8) ADDITIONAL PERFORMANCE-BASED INCEN-
TIVE PAYMENTS.— 
‘‘(A) INDEPENDENT ACTUARIAL ESTIMATE 
OF SAVINGS.—With respect to each fiscal year 
beginning after fiscal year 2009, the Secretary 
shall enter into arrangements for the analysis 
by a qualified independent entity or organiza-
tion of the actuarial value of cost savings under 
part A attributable to the improvement in the 
delivery of inpatient hospital services by hos-
pitals by reason of this section. 
‘‘(B) 
PERFORMANCE-BASED
INCENTIVE 
PAYMENT FUND.— 
‘‘(i) IN
GENERAL.—Amounts identi-
fied as savings under subparagraph (A) for 
a fiscal year shall be available to the Sec-
retary to make performance-based pay-
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ments in addition to those available under 
paragraphs (2) and (7) as incentives to 
hospitals to continue to improve the quality 
of inpatient hospital services provided to 
patients. 
‘‘(ii) INCENTIVE
PAYMENTS.—Addi-
tional payments under clause (i) shall be 
made in such form, manner, and perio-
dicity as the Secretary may specify, and 
may include payments to physicians fur-
nishing physicians’ services as part of in-
patient hospital services based on the re-
sults of performance measures on quality 
of care furnished and volume of patients 
treated. 
‘‘(9) ALTERNATIVE PERFORMANCE MEASURE.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
evaluate the appropriateness of applying an al-
ternative method for the measurement of the 
quality of care provided by hospitals to individ-
uals who are entitled to benefits under part A 
and who are inpatients of the hospitals. 
‘‘(B) 
METHODOLOGY.—The 
alternative 
method under subparagraph (A) shall measure 
the extent to which such individuals are reliably 
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