erated by a national therapy outcomes database 
system under paragraph (4) of such subsection, 
the Secretary finds that the services furnished 
by the covered provider to individuals under 
this part during the previous year resulted in— 
‘‘(i) a greater number of instances of 
functional improvement of such individuals 
than indicated by the value generated 
under paragraph (4)(A)(i) of such sub-
section; or 
‘‘(ii) if the number of instances of 
functional improvement of individuals is 
the same as that indicated by the value 
generated under paragraph (4)(A)(i) of 
such subsection, more efficient utilization 
of such services than indicated by the value 
generated under paragraph (4)(A)(ii) of 
such subsection. 
‘‘(B) LOW QUALITY CARE.—The Secretary 
shall determine that a covered provider of cov-
ered outpatient therapy services furnishes low 
quality care with respect to services furnished 
during a year if, based on a comparison of the 
Q & E measures submitted by such covered pro-
vider under paragraph (1)(A) of subsection (n) 
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with the appropriate values generated by a na-
tional therapy outcomes database under para-
graph (4) of such subsection, the Secretary 
finds that the services furnished by the covered 
provider to individuals under this part during 
the previous year resulted in— 
‘‘(i) a fewer number of instances of 
functional improvement of such individuals 
than indicated by value generated under 
paragraph (4)(A)(i) of such subsection; or 
‘‘(ii) if the number of instances of 
functional improvement of individuals is 
the same as that indicated by the value 
generated under paragraph (4)(A)(i) of 
such subsection, less efficient utilization of 
such services than indicated by the value 
generated under paragraph (4)(A)(ii) of 
such subsection. 
‘‘(3) RESULTS-BASED PAYMENTS.— 
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), additional payments under para-
graph (1)(B)(i) and reductions in payment 
under paragraph (1)(B)(ii) for covered out-
patient therapy services furnished by a covered 
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provider during a year shall be specified by the 
Secretary. 
‘‘(B) LIMITATIONS.—For purposes of sub-
paragraph (A), neither an additional payment 
under paragraph (1)(B)(i) for services involved 
nor a reduction in payment under paragraph 
(1)(B)(ii) for services involved, may exceed an 
amount that is 10 percent of the applicable fee 
schedule amount (as defined in subsection 
(k)(3)) for such respective services. 
‘‘(C) CONSTRUCTION.—An additional pay-
ment under paragraph (1)(B)(i) and a reduc-
tion in payment under paragraph (1)(B)(ii) 
shall apply only with respect to the year in-
volved, and the Secretary shall not take into ac-
count such bonus or reduction in computing the 
amount of a payment determined under sub-
section (k)(1)(B) for a subsequent year. 
‘‘(4) TRANSITIONAL
PROGRAM
FOR
EXEMPT 
COVERED
PROVIDERS
OF
COVERED
OUTPATIENT 
THERAPY SERVICES.— 
‘‘(A) IN GENERAL.—For purposes of sec-
tion 1833(g)(5) and not later than July 1, 
2007, the Secretary shall establish and imple-
ment a program to identify for any date during 
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the period described in subparagraph (B) cov-
ered providers of covered outpatient therapy 
services that are exempt providers on such date 
and to make available to the public the names 
of such exempt providers in accordance with 
this paragraph. 
‘‘(B) PERIOD OF PROGRAM DESCRIBED.— 
For purposes of subparagraph (A), the period 
described in this subparagraph is the period be-
ginning on the date on which the Secretary im-
plements the program under such subparagraph 
(A) (but not sooner than January 1, 2007) and 
ending on the date on which the Secretary im-
plements the value-based purchasing program 
under paragraph (1). 
‘‘(C) IDENTIFICATION
OF
EXEMPT
PRO-
VIDERS.—For purposes of subparagraph (A), a 
covered provider of covered outpatient therapy 
services may be identified as an exempt pro-
vider on a date if during the 90-day period im-
mediately preceding such date the covered pro-
vider— 
‘‘(i) participates in the collection of Q 
& E performance information described in 
subsection (n)(1)(B) for covered outpatient 
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therapy services, with respect to individ-
uals under this part to whom such covered 
provider furnishes services; 
‘‘(ii) submits to the Secretary, by not 
later than a date or dates specified by the 
Secretary, the information collected under 
clause (i) to be included in a national ther-
apy outcomes database provided for under 
subsection (n)(4); 
‘‘(iii) makes assurances satisfactory to 
the Secretary that Q & E performance in-
formation 
described 
in 
subsection 
(n)(1)(B) on functional outcomes for such 
services have been documented with re-
spect to at least 70 percent of the individ-
uals under this part to whom such covered 
provider furnishes services; and 
‘‘(iv) agrees to use the information 
collected from the Q & E measures to the 
greatest extent practicable in reaching clin-
ical decisions with respect to covered out-
patient therapy services furnished to indi-
viduals under this part. 
Such 90-day period may include dates before 
the period described in subparagraph (B). 
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