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•AMDT. NO. 2786 
PART III—ENCOURAGING DEVELOPMENT OF 
NEW PATIENT CARE MODELS 
SEC. 3021. ESTABLISHMENT OF CENTER FOR MEDICARE 
AND MEDICAID INNOVATION WITHIN CMS. 
(a) IN GENERAL.—Title XI of the Social Security Act 
is amended by inserting after section 1115 the following 
new section: 
‘‘CENTER FOR MEDICARE AND MEDICAID INNOVATION 
‘‘SEC. 1115A. (a) CENTER
FOR MEDICARE
AND 
MEDICAID INNOVATION ESTABLISHED.— 
‘‘(1) IN GENERAL.—There is created within the 
Centers for Medicare & Medicaid Services a Center 
for Medicare and Medicaid Innovation (in this sec-
tion referred to as the ‘CMI’) to carry out the duties 
described in this section. The purpose of the CMI is 
to test innovative payment and service delivery mod-
els to reduce program expenditures under the appli-
cable titles while preserving or enhancing the quality 
of care furnished to individuals under such titles. In 
selecting such models, the Secretary shall give pref-
erence to models that also improve the coordination, 
quality, and efficiency of health care services fur-
nished to applicable individuals defined in paragraph 
(4)(A). 
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•AMDT. NO. 2786 
‘‘(2) DEADLINE.—The Secretary shall ensure 
that the CMI is carrying out the duties described in 
this section by not later than January 1, 2011. 
‘‘(3) CONSULTATION.—In carrying out the du-
ties under this section, the CMI shall consult rep-
resentatives of relevant Federal agencies, and clin-
ical and analytical experts with expertise in medicine 
and health care management. The CMI shall use 
open door forums or other mechanisms to seek input 
from interested parties. 
‘‘(4) DEFINITIONS.—In this section: 
‘‘(A) APPLICABLE INDIVIDUAL.—The term 
‘applicable individual’ means— 
‘‘(i) an individual who is entitled to, 
or enrolled for, benefits under part A of 
title XVIII or enrolled for benefits under 
part B of such title; 
‘‘(ii) an individual who is eligible for 
medical assistance under title XIX, under 
a State plan or waiver; or 
‘‘(iii) an individual who meets the cri-
teria of both clauses (i) and (ii). 
‘‘(B) APPLICABLE TITLE.—The term ‘ap-
plicable title’ means title XVIII, title XIX, or 
both. 
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•AMDT. NO. 2786 
‘‘(b) TESTING OF MODELS (PHASE I).— 
‘‘(1) IN GENERAL.—The CMI shall test pay-
ment and service delivery models in accordance with 
selection criteria under paragraph (2) to determine 
the effect of applying such models under the applica-
ble title (as defined in subsection (a)(4)(B)) on pro-
gram expenditures under such titles and the quality 
of care received by individuals receiving benefits 
under such title. 
‘‘(2) SELECTION OF MODELS TO BE TESTED.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
select models to be tested from models where 
the Secretary determines that there is evidence 
that the model addresses a defined population 
for which there are deficits in care leading to 
poor clinical outcomes or potentially avoidable 
expenditures. The models selected under the 
preceding sentence may include the models de-
scribed in subparagraph (B). 
‘‘(B) OPPORTUNITIES.—The models de-
scribed in this subparagraph are the following 
models: 
‘‘(i) Promoting broad payment and 
practice reform in primary care, including 
patient-centered medical home models for 
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•AMDT. NO. 2786 
high-need applicable individuals, medical 
homes that address women’s unique health 
care needs, and models that transition pri-
mary care practices away from fee-for-serv-
ice based reimbursement and toward com-
prehensive payment or salary-based pay-
ment. 
‘‘(ii) Contracting directly with groups 
of providers of services and suppliers to 
promote innovative care delivery models, 
such as through risk-based comprehensive 
payment or salary-based payment. 
‘‘(iii) Utilizing geriatric assessments 
and comprehensive care plans to coordinate 
the care (including through interdiscipli-
nary teams) of applicable individuals with 
multiple chronic conditions and at least 
one of the following: 
‘‘(I) An inability to perform 2 or 
more activities of daily living. 
‘‘(II) Cognitive impairment, in-
cluding dementia. 
‘‘(iv) Promote care coordination be-
tween providers of services and suppliers 
that transition health care providers away 
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•AMDT. NO. 2786 
from fee-for-service based reimbursement 
and toward salary-based payment. 
‘‘(v) Supporting care coordination for 
chronically-ill applicable individuals at high 
risk of hospitalization through a health in-
formation technology-enabled provider net-
work that includes care coordinators, a 
chronic disease registry, and home tele- 
health technology. 
‘‘(vi) Varying payment to physicians 
who order advanced diagnostic imaging 
services 
(as 
defined 
in 
section 
1834(e)(1)(B)) according to the physi-
cian’s adherence to appropriateness criteria 
for the ordering of such services, as deter-
mined in consultation with physician spe-
cialty groups and other relevant stake-
holders. 
‘‘(vii) Utilizing medication therapy 
management services, such as those de-
scribed in section 935 of the Public Health 
Service Act. 
‘‘(viii) Establishing community-based 
health teams to support small-practice 
medical homes by assisting the primary 
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•AMDT. NO. 2786 
care practitioner in chronic care manage-
ment, including patient self-management, 
activities. 
‘‘(ix) Assisting applicable individuals 
in making informed health care choices by 
paying providers of services and suppliers 
for using patient decision-support tools, in-
cluding tools that meet the standards de-
veloped 
and 
identified 
under 
section 
936(c)(2)(A) of the Public Health Service 
Act, that improve applicable individual and 
caregiver understanding of medical treat-
ment options. 
‘‘(x) Allowing States to test and 
evaluate fully integrating care for dual eli-
gible individuals in the State, including the 
management and oversight of all funds 
under the applicable titles with respect to 
such individuals. 
‘‘(xi) Allowing States to test and 
evaluate systems of all-payer payment re-
form for the medical care of residents of 
the State, including dual eligible individ-
uals. 
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•AMDT. NO. 2786 
‘‘(xii) Aligning nationally recognized, 
evidence-based guidelines of cancer care 
with payment incentives under title XVIII 
in the areas of treatment planning and fol-
low-up care planning for applicable individ-
uals described in clause (i) or (iii) of sub-
section (a)(4)(A) with cancer, including the 
identification of gaps in applicable quality 
measures. 
‘‘(xiii) 
Improving 
post-acute 
care 
through continuing care hospitals that 
offer inpatient rehabilitation, long-term 
care hospitals, and home health or skilled 
nursing care during an inpatient stay and 
the 30 days immediately following dis-
charge. 
‘‘(xiv) Funding home health providers 
who offer chronic care management serv-
ices to applicable individuals in cooperation 
with interdisciplinary teams. 
‘‘(xv) Promoting improved quality and 
reduced cost by developing a collaborative 
of high-quality, low-cost health care insti-
tutions that is responsible for— 
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•AMDT. NO. 2786 
‘‘(I) 
developing, 
documenting, 
and disseminating best practices and 
proven care methods; 
‘‘(II) implementing such best 
practices and proven care methods 
within such institutions to dem-
onstrate 
further 
improvements 
in 
quality and efficiency; and 
‘‘(III) providing assistance to 
other health care institutions on how 
best to employ such best practices and 
proven care methods to improve 
health care quality and lower costs. 
‘‘(xvi) Facilitate inpatient care, in-
cluding intensive care, of hospitalized ap-
plicable individuals at their local hospital 
through the use of electronic monitoring by 
specialists, including intensivists and crit-
ical care specialists, based at integrated 
health systems. 
‘‘(xvii) Promoting greater efficiencies 
and timely access to outpatient services 
(such as outpatient physical therapy serv-
ices) through models that do not require a 
physician or other health professional to 
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•AMDT. NO. 2786 
refer the service or be involved in estab-
lishing the plan of care for the service, 
when such service is furnished by a health 
professional who has the authority to fur-
nish the service under existing State law. 
‘‘(xviii) Establishing comprehensive 
payments to Healthcare Innovation Zones, 
consisting of groups of providers that in-
clude a teaching hospital, physicians, and 
other clinical entities, that, through their 
structure, operations, and joint-activity de-
liver a full spectrum of integrated and 
comprehensive health care services to ap-
plicable individuals while also incorporating 
innovative methods for the clinical training 
of future health care professionals. 
‘‘(C) ADDITIONAL FACTORS FOR CONSID-
ERATION.—In selecting models for testing 
under subparagraph (A), the CMI may consider 
the following additional factors: 
‘‘(i) Whether the model includes a 
regular process for monitoring and updat-
ing patient care plans in a manner that is 
consistent with the needs and preferences 
of applicable individuals. 
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•AMDT. NO. 2786 
‘‘(ii) Whether the model places the ap-
plicable individual, including family mem-
bers and other informal caregivers of the 
applicable individual, at the center of the 
care team of the applicable individual. 
‘‘(iii) Whether the model provides for 
in-person contact with applicable individ-
uals. 
‘‘(iv) Whether the model utilizes tech-
nology, such as electronic health records 
and patient-based remote monitoring sys-
tems, to coordinate care over time and 
across settings. 
‘‘(v) Whether the model provides for 
the maintenance of a close relationship be-
tween care coordinators, primary care 
practitioners, specialist physicians, commu-
nity-based organizations, and other pro-
viders of services and suppliers. 
‘‘(vi) Whether the model relies on a 
team-based approach to interventions, such 
as comprehensive care assessments, care 
planning, and self-management coaching. 
‘‘(vii) Whether, under the model, pro-
viders of services and suppliers are able to 
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•AMDT. NO. 2786 
share information with patients, caregivers, 
and other providers of services and sup-
pliers on a real time basis. 
‘‘(3) BUDGET NEUTRALITY.— 
‘‘(A) INITIAL
PERIOD.—The Secretary 
shall not require, as a condition for testing a 
model under paragraph (1), that the design of 
such model ensure that such model is budget 
neutral initially with respect to expenditures 
under the applicable title. 
‘‘(B) TERMINATION OR MODIFICATION.— 
The Secretary shall terminate or modify the de-
sign and implementation of a model unless the 
Secretary determines (and the Chief Actuary of 
the Centers for Medicare & Medicaid Services, 
with respect to program spending under the ap-
plicable title, certifies), after testing has begun, 
that the model is expected to— 
‘‘(i) improve the quality of care (as 
determined by the Administrator of the 
Centers for Medicare & Medicaid Services) 
without increasing spending under the ap-
plicable title; 
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•AMDT. NO. 2786 
‘‘(ii) reduce spending under the appli-
cable title without reducing the quality of 
care; or 
‘‘(iii) improve the quality of care and 
reduce spending. 
Such termination may occur at any time after 
such testing has begun and before completion of 
the testing. 
‘‘(4) EVALUATION.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
conduct an evaluation of each model tested 
under this subsection. Such evaluation shall in-
clude an analysis of— 
‘‘(i) the quality of care furnished 
under the model, including the measure-
ment of patient-level outcomes and patient- 
centeredness criteria determined appro-
priate by the Secretary; and 
‘‘(ii) the changes in spending under 
the applicable titles by reason of the 
model. 
‘‘(B) INFORMATION.—The Secretary shall 
make the results of each evaluation under this 
paragraph available to the public in a timely 
fashion and may establish requirements for 
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•AMDT. NO. 2786 
States and other entities participating in the 
testing of models under this section to collect 
and report information that the Secretary de-
termines is necessary to monitor and evaluate 
such models. 
‘‘(c) EXPANSION OF MODELS (PHASE II).—Taking 
into account the evaluation under subsection (b)(4), the 
Secretary may, through rulemaking, expand (including im-
plementation on a nationwide basis) the duration and the 
scope of a model that is being tested under subsection (b) 
or a demonstration project under section 1866C, to the 
extent determined appropriate by the Secretary, if— 
‘‘(1) the Secretary determines that such expan-
sion is expected to— 
‘‘(A) reduce spending under applicable title 
without reducing the quality of care; or 
‘‘(B) improve the quality of care and re-
duce spending; and 
‘‘(2) the Chief Actuary of the Centers for Medi-
care & Medicaid Services certifies that such expan-
sion would reduce program spending under applica-
ble titles. 
‘‘(d) IMPLEMENTATION.— 
‘‘(1) WAIVER AUTHORITY.—The Secretary may 
waive such requirements of titles XI and XVIII and 
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•AMDT. NO. 2786 
of 
sections 
1902(a)(1), 
1902(a)(13), 
and 
1903(m)(2)(A)(iii) as may be necessary solely for 
purposes of carrying out this section with respect to 
testing models described in subsection (b). 
‘‘(2) LIMITATIONS ON REVIEW.—There shall be 
no administrative or judicial review under section 
1869, section 1878, or otherwise of— 
‘‘(A) the selection of models for testing or 
expansion under this section; 
‘‘(B) the selection of organizations, sites, 
or participants to test those models selected; 
‘‘(C) the elements, parameters, scope, and 
duration of such models for testing or dissemi-
nation; 
‘‘(D) determinations regarding budget neu-
trality under subsection (b)(3); 
‘‘(E) the termination or modification of the 
design and implementation of a model under 
subsection (b)(3)(B); and 
‘‘(F) determinations about expansion of 
the duration and scope of a model under sub-
section (c), including the determination that a 
model is not expected to meet criteria described 
in paragraph (1) or (2) of such subsection. 
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•AMDT. NO. 2786 
‘‘(3) ADMINISTRATION.—Chapter 35 of title 44, 
United States Code, shall not apply to the testing 
and evaluation of models or expansion of such mod-
els under this section. 
‘‘(e) APPLICATION TO CHIP.—The Center may carry 
out activities under this section with respect to title XXI 
in the same manner as provided under this section with 
respect to the program under the applicable titles. 
‘‘(f) FUNDING.— 
‘‘(1) IN
GENERAL.—There are appropriated, 
from amounts in the Treasury not otherwise appro-
priated— 
‘‘(A) $5,000,000 for the design, implemen-
tation, and evaluation of models under sub-
section (b) for fiscal year 2010; 
‘‘(B) $10,000,000,000 for the activities 
initiated under this section for the period of fis-
cal years 2011 through 2019; and 
‘‘(C) the amount described in subpara-
graph (B) for the activities initiated under this 
section for each subsequent 10-year fiscal pe-
riod (beginning with the 10-year fiscal period 
beginning with fiscal year 2020). 
Amounts appropriated under the preceding sentence 
shall remain available until expended. 
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•AMDT. NO. 2786 
‘‘(2) 
USE
OF
CERTAIN
FUNDS.—Out 
of 
amounts appropriated under subparagraphs (B) and 
(C) of paragraph (1), not less than $25,000,000 
shall be made available each such fiscal year to de-
sign, implement, and evaluate models under sub-
section (b). 
‘‘(g) REPORT TO CONGRESS.—Beginning in 2012, 
and not less than once every other year thereafter, the 
Secretary shall submit to Congress a report on activities 
under this section. Each such report shall describe the 
models tested under subsection (b), including the number 
of individuals described in subsection (a)(4)(A)(i) and of 
individuals described in subsection (a)(4)(A)(ii) partici-
pating in such models and payments made under applica-
ble titles for services on behalf of such individuals, any 
models chosen for expansion under subsection (c), and the 
results from evaluations under subsection (b)(4). In addi-
tion, each such report shall provide such recommendations 
as the Secretary determines are appropriate for legislative 
action to facilitate the development and expansion of suc-
cessful payment models.’’. 
(b) MEDICAID CONFORMING AMENDMENT.—Section 
1902(a) of the Social Security Act (42 U.S.C. 1396a(a)), 
as amended by section 8002(b), is amended— 
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•AMDT. NO. 2786 
(1) in paragraph (81), by striking ‘‘and’’ at the 
end; 
(2) in paragraph (82), by striking the period at 
the end and inserting ‘‘; and’’; and 
(3) by inserting after paragraph (82) the fol-
lowing new paragraph: 
‘‘(83) provide for implementation of the pay-
ment models specified by the Secretary under section 
1115A(c) for implementation on a nationwide basis 
unless the State demonstrates to the satisfaction of 
the Secretary that implementation would not be ad-
ministratively feasible or appropriate to the health 
care delivery system of the State.’’. 
(c) REVISIONS TO HEALTH CARE QUALITY DEM-
ONSTRATION PROGRAM.—Subsections (b) and (f) of sec-
tion 1866C of the Social Security Act (42 U.S.C. 1395cc– 
3) are amended by striking ‘‘5-year’’ each place it appears. 
SEC. 3022. MEDICARE SHARED SAVINGS PROGRAM. 
Title XVIII of the Social Security Act (42 U.S.C. 
1395 et seq.) is amended by adding at the end the fol-
lowing new section: 
‘‘SHARED SAVINGS PROGRAM 
‘‘SEC. 1899. (a) ESTABLISHMENT.— 
‘‘(1) IN GENERAL.—Not later than January 1, 
2012, the Secretary shall establish a shared savings 
program (in this section referred to as the ‘pro-
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•AMDT. NO. 2786 
gram’) that promotes accountability for a patient 
population and coordinates items and services under 
parts A and B, and encourages investment in infra-
structure and redesigned care processes for high 
quality and efficient service delivery. Under such 
program— 
‘‘(A) groups of providers of services and 
suppliers meeting criteria specified by the Sec-
retary may work together to manage and co-
ordinate care for Medicare fee-for-service bene-
ficiaries through an accountable care organiza-
tion (referred to in this section as an ‘ACO’); 
and 
‘‘(B) ACOs that meet quality performance 
standards established by the Secretary are eligi-
ble to receive payments for shared savings 
under subsection (d)(2). 
‘‘(b) ELIGIBLE ACOS.— 
‘‘(1) IN GENERAL.—Subject to the succeeding 
provisions of this subsection, as determined appro-
priate by the Secretary, the following groups of pro-
viders of services and suppliers which have estab-
lished a mechanism for shared governance are eligi-
ble to participate as ACOs under the program under 
this section: 
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•AMDT. NO. 2786 
‘‘(A) ACO professionals in group practice 
arrangements. 
‘‘(B) Networks of individual practices of 
ACO professionals. 
‘‘(C) Partnerships or joint venture ar-
rangements between hospitals and ACO profes-
sionals. 
‘‘(D) Hospitals employing ACO profes-
sionals. 
‘‘(E) Such other groups of providers of 
services and suppliers as the Secretary deter-
mines appropriate. 
‘‘(2) REQUIREMENTS.—An ACO shall meet the 
following requirements: 
‘‘(A) The ACO shall be willing to become 
accountable for the quality, cost, and overall 
care of the Medicare fee-for-service beneficiaries 
assigned to it. 
‘‘(B) The ACO shall enter into an agree-
ment with the Secretary to participate in the 
program for not less than a 3-year period (re-
ferred to in this section as the ‘agreement pe-
riod’). 
‘‘(C) The ACO shall have a formal legal 
structure that would allow the organization to 
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•AMDT. NO. 2786 
receive and distribute payments for shared sav-
ings under subsection (d)(2) to participating 
providers of services and suppliers. 
‘‘(D) The ACO shall include primary care 
ACO professionals that are sufficient for the 
number of Medicare fee-for-service beneficiaries 
assigned to the ACO under subsection (c). At a 
minimum, the ACO shall have at least 5,000 
such beneficiaries assigned to it under sub-
section (c) in order to be eligible to participate 
in the ACO program. 
‘‘(E) The ACO shall provide the Secretary 
with such information regarding ACO profes-
sionals participating in the ACO as the Sec-
retary determines necessary to support the as-
signment of Medicare fee-for-service bene-
ficiaries to an ACO, the implementation of 
quality and other reporting requirements under 
paragraph (3), and the determination of pay-
ments for shared savings under subsection 
(d)(2). 
‘‘(F) The ACO shall have in place a leader-
ship and management structure that includes 
clinical and administrative systems. 
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•AMDT. NO. 2786 
‘‘(G) The ACO shall define processes to 
promote evidence-based medicine and patient 
engagement, report on quality and cost meas-
ures, and coordinate care, such as through the 
use of telehealth, remote patient monitoring, 
and other such enabling technologies. 
‘‘(H) The ACO shall demonstrate to the 
Secretary that it meets patient-centeredness cri-
teria specified by the Secretary, such as the use 
of patient and caregiver assessments or the use 
of individualized care plans. 
‘‘(3) QUALITY
AND
OTHER
REPORTING
RE-
QUIREMENTS.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
determine appropriate measures to assess the 
quality of care furnished by the ACO, such as 
measures of— 
‘‘(i) clinical processes and outcomes; 
‘‘(ii) patient and, where practicable, 
caregiver experience of care; and 
‘‘(iii) utilization (such as rates of hos-
pital admissions for ambulatory care sen-
sitive conditions). 
‘‘(B) 
REPORTING
REQUIREMENTS.—An 
ACO shall submit data in a form and manner 
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•AMDT. NO. 2786 
specified by the Secretary on measures the Sec-
retary determines necessary for the ACO to re-
port in order to evaluate the quality of care fur-
nished by the ACO. Such data may include care 
transitions across health care settings, including 
hospital discharge planning and post-hospital 
discharge follow-up by ACO professionals, as 
the Secretary determines appropriate. 
‘‘(C) 
QUALITY
PERFORMANCE
STAND-
ARDS.—The Secretary shall establish quality 
performance standards to assess the quality of 
care furnished by ACOs. The Secretary shall 
seek to improve the quality of care furnished by 
ACOs over time by specifying higher standards, 
new measures, or both for purposes of assessing 
such quality of care. 
‘‘(D) 
OTHER
REPORTING
REQUIRE-
MENTS.—The Secretary may, as the Secretary 
determines appropriate, incorporate reporting 
requirements and incentive payments related to 
the 
physician 
quality 
reporting 
initiative 
(PQRI) under section 1848, including such re-
quirements and such payments related to elec-
tronic prescribing, electronic health records, 
and other similar initiatives under section 1848, 
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•AMDT. NO. 2786 
and may use alternative criteria than would 
otherwise apply under such section for deter-
mining whether to make such payments. The 
incentive payments described in the preceding 
sentence shall not be taken into consideration 
when calculating any payments otherwise made 
under subsection (d). 
‘‘(4) NO
DUPLICATION
IN
PARTICIPATION
IN 
SHARED SAVINGS PROGRAMS.—A provider of services 
or supplier that participates in any of the following 
shall not be eligible to participate in an ACO under 
this section: 
‘‘(A) A model tested or expanded under 
section 1115A that involves shared savings 
under this title, or any other program or dem-
onstration project that involves such shared 
savings. 
‘‘(B) The independence at home medical 
practice pilot program under section 1866E. 
‘‘(c) ASSIGNMENT OF MEDICARE FEE-FOR-SERVICE 
BENEFICIARIES TO ACOS.—The Secretary shall deter-
mine an appropriate method to assign Medicare fee-for- 
service beneficiaries to an ACO based on their utilization 
of primary care services provided under this title by an 
ACO professional described in subsection (h)(1)(A). 
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•AMDT. NO. 2786 
‘‘(d) PAYMENTS AND TREATMENT OF SAVINGS.— 
‘‘(1) PAYMENTS.— 
‘‘(A) IN GENERAL.—Under the program, 
subject to paragraph (3), payments shall con-
tinue to be made to providers of services and 
suppliers participating in an ACO under the 
original Medicare fee-for-service program under 
parts A and B in the same manner as they 
would otherwise be made except that a partici-
pating ACO is eligible to receive payment for 
shared savings under paragraph (2) if— 
‘‘(i) the ACO meets quality perform-
ance standards established by the Sec-
retary under subsection (b)(3); and 
‘‘(ii) the ACO meets the requirement 
under subparagraph (B)(i). 
‘‘(B) SAVINGS REQUIREMENT AND BENCH-
MARK.— 
‘‘(i) DETERMINING SAVINGS.—In each 
year of the agreement period, an ACO 
shall be eligible to receive payment for 
shared savings under paragraph (2) only if 
the estimated average per capita Medicare 
expenditures under the ACO for Medicare 
fee-for-service beneficiaries for parts A and 
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•AMDT. NO. 2786 
B services, adjusted for beneficiary charac-
teristics, is at least the percent specified by 
the Secretary below the applicable bench-
mark under clause (ii). The Secretary shall 
determine the appropriate percent de-
scribed in the preceding sentence to ac-
count for normal variation in expenditures 
under this title, based upon the number of 
Medicare fee-for-service beneficiaries as-
signed to an ACO. 
‘‘(ii) 
ESTABLISH
AND
UPDATE 
BENCHMARK.—The Secretary shall esti-
mate a benchmark for each agreement pe-
riod for each ACO using the most recent 
available 3 years of per-beneficiary expend-
itures for parts A and B services for Medi-
care fee-for-service beneficiaries assigned 
to the ACO. Such benchmark shall be ad-
justed for beneficiary characteristics and 
such other factors as the Secretary deter-
mines appropriate and updated by the pro-
jected absolute amount of growth in na-
tional per capita expenditures for parts A 
and B services under the original Medicare 
fee-for-service program, as estimated by 
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•AMDT. NO. 2786 
the Secretary. Such benchmark shall be 
reset at the start of each agreement pe-
riod. 
‘‘(2) PAYMENTS FOR SHARED SAVINGS.—Sub-
ject to performance with respect to the quality per-
formance standards established by the Secretary 
under subsection (b)(3), if an ACO meets the re-
quirements under paragraph (1), a percent (as de-
termined appropriate by the Secretary) of the dif-
ference between such estimated average per capita 
Medicare expenditures in a year, adjusted for bene-
ficiary characteristics, under the ACO and such 
benchmark for the ACO may be paid to the ACO as 
shared savings and the remainder of such difference 
shall be retained by the program under this title. 
The Secretary shall establish limits on the total 
amount of shared savings that may be paid to an 
ACO under this paragraph. 
‘‘(3) MONITORING AVOIDANCE OF AT-RISK PA-
TIENTS.—If the Secretary determines that an ACO 
has taken steps to avoid patients at risk in order to 
reduce the likelihood of increasing costs to the ACO 
the Secretary may impose an appropriate sanction 
on the ACO, including termination from the pro-
gram. 
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•AMDT. NO. 2786 
‘‘(4) TERMINATION.—The Secretary may termi-
nate an agreement with an ACO if it does not meet 
the quality performance standards established by the 
Secretary under subsection (b)(3). 
‘‘(e) ADMINISTRATION.—Chapter 35 of title 44, 
United States Code, shall not apply to the program. 
‘‘(f) WAIVER AUTHORITY.—The Secretary may waive 
such requirements of sections 1128A and 1128B and title 
XVIII of this Act as may be necessary to carry out the 
provisions of this section. 
‘‘(g) LIMITATIONS ON REVIEW.—There shall be no 
administrative or judicial review under section 1869, sec-
tion 1878, or otherwise of— 
‘‘(1) the specification of criteria under sub-
section (a)(1)(B); 
‘‘(2) the assessment of the quality of care fur-
nished by an ACO and the establishment of perform-
ance standards under subsection (b)(3); 
‘‘(3) the assignment of Medicare fee-for-service 
beneficiaries to an ACO under subsection (c); 
‘‘(4) the determination of whether an ACO is 
eligible for shared savings under subsection (d)(2) 
and the amount of such shared savings, including 
the determination of the estimated average per cap-
ita Medicare expenditures under the ACO for Medi-
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•AMDT. NO. 2786 
care fee-for-service beneficiaries assigned to the ACO 
and the average benchmark for the ACO under sub-
section (d)(1)(B); 
‘‘(5) the percent of shared savings specified by 
the Secretary under subsection (d)(2) and any limit 
on the total amount of shared savings established by 
the Secretary under such subsection; and 
‘‘(6) the termination of an ACO under sub-
section (d)(4). 
‘‘(h) DEFINITIONS.—In this section: 
‘‘(1) ACO PROFESSIONAL.—The term ‘ACO 
professional’ means— 
‘‘(A) a physician (as defined in section 
1861(r)(1)); and 
‘‘(B) a practitioner described in section 
1842(b)(18)(C)(i). 
‘‘(2) HOSPITAL.—The term ‘hospital’ means a 
subsection (d) hospital (as defined in section 
1886(d)(1)(B)). 
‘‘(3) 
MEDICARE
FEE-FOR-SERVICE
BENE-
FICIARY.—The term ‘Medicare fee-for-service bene-
ficiary’ means an individual who is enrolled in the 
original Medicare fee-for-service program under 
parts A and B and is not enrolled in an MA plan 
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•AMDT. NO. 2786 
under part C, an eligible organization under section 
1876, or a PACE program under section 1894.’’. 
SEC. 3023. NATIONAL PILOT PROGRAM ON PAYMENT BUN-
DLING. 
Title XVIII of the Social Security Act, as amended 
by section 3021, is amended by inserting after section 
1886C the following new section: 
‘‘NATIONAL PILOT PROGRAM ON PAYMENT BUNDLING 
‘‘SEC. 1866D. (a) IMPLEMENTATION.— 
‘‘(1) IN GENERAL.—The Secretary shall estab-
lish a pilot program for integrated care during an 
episode of care provided to an applicable beneficiary 
around a hospitalization in order to improve the co-
ordination, quality, and efficiency of health care 
services under this title. 
‘‘(2) DEFINITIONS.—In this section: 
‘‘(A) 
APPLICABLE
BENEFICIARY.—The 
term ‘applicable beneficiary’ means an indi-
vidual who— 
‘‘(i) is entitled to, or enrolled for, ben-
efits under part A and enrolled for benefits 
under part B of such title, but not enrolled 
under part C or a PACE program under 
section 1894; and 
‘‘(ii) is admitted to a hospital for an 
applicable condition. 
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•AMDT. NO. 2786 
‘‘(B) APPLICABLE CONDITION.—The term 
‘applicable condition’ means 1 or more of 8 con-
ditions selected by the Secretary. In selecting 
conditions under the preceding sentence, the 
Secretary shall take into consideration the fol-
lowing factors: 
‘‘(i) Whether the conditions selected 
include a mix of chronic and acute condi-
tions. 
‘‘(ii) Whether the conditions selected 
include a mix of surgical and medical con-
ditions. 
‘‘(iii) Whether a condition is one for 
which there is evidence of an opportunity 
for providers of services and suppliers to 
improve the quality of care furnished while 
reducing total expenditures under this 
title. 
‘‘(iv) Whether a condition has signifi-
cant variation in— 
‘‘(I) the number of readmissions; 
and 
‘‘(II) the amount of expenditures 
for post-acute care spending under 
this title. 
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•AMDT. NO. 2786 
‘‘(v) Whether a condition is high-vol-
ume and has high post-acute care expendi-
tures under this title. 
‘‘(vi) Which conditions the Secretary 
determines are most amenable to bundling 
across the spectrum of care given practice 
patterns under this title. 
‘‘(C) APPLICABLE
SERVICES.—The term 
‘applicable services’ means the following: 
‘‘(i) Acute care inpatient services. 
‘‘(ii) Physicians’ services delivered in 
and outside of an acute care hospital set-
ting. 
‘‘(iii) Outpatient hospital services, in-
cluding emergency department services. 
‘‘(iv) Post-acute care services, includ-
ing home health services, skilled nursing 
services, inpatient rehabilitation services, 
and inpatient hospital services furnished by 
a long-term care hospital. 
‘‘(v) Other services the Secretary de-
termines appropriate. 
‘‘(D) EPISODE OF CARE.— 
‘‘(i) IN GENERAL.—Subject to clause 
(ii), the term ‘episode of care’ means, with 
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•AMDT. NO. 2786 
respect to an applicable condition and an 
applicable beneficiary, the period that in-
cludes— 
‘‘(I) the 3 days prior to the ad-
mission of the applicable beneficiary 
to a hospital for the applicable condi-
tion; 
‘‘(II) the length of stay of the ap-
plicable beneficiary in such hospital; 
and 
‘‘(III) the 30 days following the 
discharge of the applicable beneficiary 
from such hospital. 
‘‘(ii) ESTABLISHMENT OF PERIOD BY 
THE SECRETARY.—The Secretary, as ap-
propriate, may establish a period (other 
than the period described in clause (i)) for 
an episode of care under the pilot program. 
‘‘(E) PHYSICIANS’ SERVICES.—The term 
‘physicians’ services’ has the meaning given 
such term in section 1861(q). 
‘‘(F) PILOT
PROGRAM.—The term ‘pilot 
program’ means the pilot program under this 
section. 
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•AMDT. NO. 2786 
‘‘(G) PROVIDER OF SERVICES.—The term 
‘provider of services’ has the meaning given 
such term in section 1861(u). 
‘‘(H) READMISSION.—The term ‘readmis-
sion’ has the meaning given such term in sec-
tion 1886(q)(5)(E). 
‘‘(I) SUPPLIER.—The term ‘supplier’ has 
the meaning given such term in section 
1861(d). 
‘‘(3) DEADLINE
FOR
IMPLEMENTATION.—The 
Secretary shall establish the pilot program not later 
than January 1, 2013. 
‘‘(b) DEVELOPMENTAL PHASE.— 
‘‘(1) DETERMINATION
OF
PATIENT
ASSESS-
MENT INSTRUMENT.—The Secretary shall determine 
which patient assessment instrument (such as the 
Continuity Assessment Record and Evaluation 
(CARE) tool) shall be used under the pilot program 
to evaluate the applicable condition of an applicable 
beneficiary for purposes of determining the most 
clinically appropriate site for the provision of post- 
acute care to the applicable beneficiary. 
‘‘(2) DEVELOPMENT
OF
QUALITY
MEASURES 
FOR AN EPISODE OF CARE AND FOR POST-ACUTE 
CARE.— 
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•AMDT. NO. 2786 
‘‘(A) IN GENERAL.—The Secretary, in con-
sultation with the Agency for Healthcare Re-
search and Quality and the entity with a con-
tract under section 1890(a) of the Social Secu-
rity Act, shall develop quality measures for use 
in the pilot program— 
‘‘(i) for episodes of care; and 
‘‘(ii) for post-acute care. 
‘‘(B) SITE-NEUTRAL
POST-ACUTE
CARE 
QUALITY
MEASURES.—Any quality measures 
developed under subparagraph (A)(ii) shall be 
site-neutral. 
‘‘(C) COORDINATION WITH QUALITY MEAS-
URE DEVELOPMENT AND ENDORSEMENT PRO-
CEDURES.—The Secretary shall ensure that the 
development of quality measures under sub-
paragraph (A) is done in a manner that is con-
sistent with the measures developed and en-
dorsed under section 1890 and 1890A that are 
applicable to all post-acute care settings. 
‘‘(c) DETAILS.— 
‘‘(1) DURATION.— 
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), the pilot program shall be conducted 
for a period of 5 years. 
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•AMDT. NO. 2786 
‘‘(B) EXTENSION.—The Secretary may ex-
tend the duration of the pilot program for pro-
viders of services and suppliers participating in 
the pilot program as of the day before the end 
of the 5-year period described in subparagraph 
(A), for a period determined appropriate by the 
Secretary, if the Secretary determines that such 
extension will result in improving or not reduc-
ing the quality of patient care and reducing 
spending under this title. 
‘‘(2) PARTICIPATING PROVIDERS OF SERVICES 
AND SUPPLIERS.— 
‘‘(A) IN GENERAL.—An entity comprised 
of providers of services and suppliers, including 
a hospital, a physician group, a skilled nursing 
facility, and a home health agency, who are oth-
erwise participating under this title, may sub-
mit an application to the Secretary to provide 
applicable services to applicable individuals 
under this section. 
‘‘(B) 
REQUIREMENTS.—The 
Secretary 
shall develop requirements for entities to par-
ticipate in the pilot program under this section. 
Such requirements shall ensure that applicable 
beneficiaries have an adequate choice of pro-
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•AMDT. NO. 2786 
viders of services and suppliers under the pilot 
program. 
‘‘(3) PAYMENT METHODOLOGY.— 
‘‘(A) IN GENERAL.— 
‘‘(i) ESTABLISHMENT
OF
PAYMENT 
METHODS.—The Secretary shall develop 
payment methods for the pilot program for 
entities participating in the pilot program. 
Such payment methods may include bun-
dled payments and bids from entities for 
episodes of care. The Secretary shall make 
payments to the entity for services covered 
under this section. 
‘‘(ii) NO
ADDITIONAL
PROGRAM
EX-
PENDITURES.—Payments under this sec-
tion for applicable items and services under 
this title (including payment for services 
described in subparagraph (B)) for appli-
cable beneficiaries for a year shall be es-
tablished in a manner that does not result 
in spending more for such entity for such 
beneficiaries than would otherwise be ex-
pended for such entity for such bene-
ficiaries for such year if the pilot program 
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•AMDT. NO. 2786 
were not implemented, as estimated by the 
Secretary. 
‘‘(B) INCLUSION OF CERTAIN SERVICES.— 
A payment methodology tested under the pilot 
program shall include payment for the fur-
nishing of applicable services and other appro-
priate services, such as care coordination, medi-
cation reconciliation, discharge planning, transi-
tional care services, and other patient-centered 
activities as determined appropriate by the Sec-
retary. 
‘‘(C) BUNDLED PAYMENTS.— 
‘‘(i) IN
GENERAL.—A bundled pay-
ment under the pilot program shall— 
‘‘(I) be comprehensive, covering 
the costs of applicable services and 
other appropriate services furnished to 
an individual during an episode of 
care (as determined by the Secretary); 
and 
‘‘(II) be made to the entity which 
is participating in the pilot program. 
‘‘(ii) REQUIREMENT
FOR
PROVISION 
OF APPLICABLE SERVICES AND OTHER AP-
PROPRIATE SERVICES.—Applicable services 
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•AMDT. NO. 2786 
and other appropriate services for which 
payment is made under this subparagraph 
shall be furnished or directed by the entity 
which is participating in the pilot program. 
‘‘(D) PAYMENT
FOR
POST-ACUTE
CARE 
SERVICES AFTER THE EPISODE OF CARE.—The 
Secretary shall establish procedures, in the case 
where an applicable beneficiary requires contin-
ued post-acute care services after the last day 
of the episode of care, under which payment for 
such services shall be made. 
‘‘(4) QUALITY MEASURES.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
establish quality measures (including quality 
measures of process, outcome, and structure) 
related to care provided by entities participating 
in the pilot program. Quality measures estab-
lished under the preceding sentence shall in-
clude measures of the following: 
‘‘(i) Functional status improvement. 
‘‘(ii) Reducing rates of avoidable hos-
pital readmissions. 
‘‘(iii) Rates of discharge to the com-
munity. 
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•AMDT. NO. 2786 
‘‘(iv) Rates of admission to an emer-
gency room after a hospitalization. 
‘‘(v) Incidence of health care acquired 
infections. 
‘‘(vi) Efficiency measures. 
‘‘(vii) 
Measures 
of 
patient- 
centeredness of care. 
‘‘(viii) Measures of patient perception 
of care. 
‘‘(ix) Other measures, including meas-
ures of patient outcomes, determined ap-
propriate by the Secretary. 
‘‘(B) REPORTING
ON
QUALITY
MEAS-
URES.— 
‘‘(i) IN GENERAL.—A entity shall sub-
mit data to the Secretary on quality meas-
ures established under subparagraph (A) 
during each year of the pilot program (in 
a form and manner, subject to clause (iii), 
specified by the Secretary). 
‘‘(ii) SUBMISSION OF DATA THROUGH 
ELECTRONIC
HEALTH
RECORD.—To the 
extent practicable, the Secretary shall 
specify that data on measures be sub-
mitted under clause (i) through the use of 
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•AMDT. NO. 2786 
an qualified electronic health record (as de-
fined in section 3000(13) of the Public 
Health Service Act (42 U.S.C. 300jj– 
11(13)) in a manner specified by the Sec-
retary. 
‘‘(d) WAIVER.—The Secretary may waive such provi-
sions of this title and title XI as may be necessary to carry 
out the pilot program. 
‘‘(e) INDEPENDENT EVALUATION AND REPORTS ON 
PILOT PROGRAM.— 
‘‘(1) INDEPENDENT
EVALUATION.—The Sec-
retary shall conduct an independent evaluation of 
the pilot program, including the extent to which the 
pilot program has— 
‘‘(A) improved quality measures estab-
lished under subsection (c)(4)(A); 
‘‘(B) improved health outcomes; 
‘‘(C) improved applicable beneficiary access 
to care; and 
‘‘(D) reduced spending under this title. 
‘‘(2) REPORTS.— 
‘‘(A) INTERIM REPORT.—Not later than 2 
years after the implementation of the pilot pro-
gram, the Secretary shall submit to Congress a 
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•AMDT. NO. 2786 
report on the initial results of the independent 
evaluation conducted under paragraph (1). 
‘‘(B) FINAL REPORT.—Not later than 3 
years after the implementation of the pilot pro-
gram, the Secretary shall submit to Congress a 
report on the final results of the independent 
evaluation conducted under paragraph (1). 
‘‘(f) CONSULTATION.—The Secretary shall consult 
with representatives of small rural hospitals, including 
critical 
access 
hospitals 
(as 
defined 
in 
section 
1861(mm)(1)), regarding their participation in the pilot 
program. Such consultation shall include consideration of 
innovative methods of implementing bundled payments in 
hospitals described in the preceding sentence, taking into 
consideration any difficulties in doing so as a result of the 
low volume of services provided by such hospitals. 
‘‘(g) IMPLEMENTATION PLAN.— 
‘‘(1) IN GENERAL.—Not later than January 1, 
2016, the Secretary shall submit a plan for the im-
plementation of an expansion of the pilot program if 
the Secretary determines that such expansion will 
result in improving or not reducing the quality of 
patient care and reducing spending under this title. 
‘‘(h) ADMINISTRATION.—Chapter 35 of title 44, 
United States Code, shall not apply to the selection, test-
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•AMDT. NO. 2786 
ing, and evaluation of models or the expansion of such 
models under this section.’’. 
SEC. 3024. INDEPENDENCE AT HOME DEMONSTRATION 
PROGRAM. 
Title XVIII of the Social Security Act is amended by 
inserting after section 1866D, as inserted by section 3023, 
the following new section: 
‘‘INDEPENDENCE AT HOME MEDICAL PRACTICE 
DEMONSTRATION PROGRAM 
‘‘SEC. 1866D. (a) ESTABLISHMENT.— 
‘‘(1) IN GENERAL.—The Secretary shall con-
duct a demonstration program (in this section re-
ferred to as the ‘demonstration program’) to test a 
payment incentive and service delivery model that 
utilizes physician and nurse practitioner directed 
home-based primary care teams designed to reduce 
expenditures and improve health outcomes in the 
provision of items and services under this title to ap-
plicable beneficiaries (as defined in subsection (d)). 
‘‘(2) REQUIREMENT.—The demonstration pro-
gram shall test whether a model described in para-
graph (1), which is accountable for providing com-
prehensive, coordinated, continuous, and accessible 
care to high-need populations at home and coordi-
nating health care across all treatment settings, re-
sults in— 
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•AMDT. NO. 2786 
‘‘(A) reducing preventable hospitalizations; 
‘‘(B) preventing hospital readmissions; 
‘‘(C) reducing emergency room visits; 
‘‘(D) improving health outcomes commen-
surate with the beneficiaries’ stage of chronic 
illness; 
‘‘(E) improving the efficiency of care, such 
as by reducing duplicative diagnostic and lab-
oratory tests; 
‘‘(F) reducing the cost of health care serv-
ices covered under this title; and 
‘‘(G) achieving beneficiary and family care-
giver satisfaction. 
‘‘(b) INDEPENDENCE
AT HOME MEDICAL PRAC-
TICE.— 
‘‘(1) INDEPENDENCE AT HOME MEDICAL PRAC-
TICE DEFINED.—In this section: 
‘‘(A) IN GENERAL.—The term ‘independ-
ence at home medical practice’ means a legal 
entity that— 
‘‘(i) is comprised of an individual phy-
sician or nurse practitioner or group of 
physicians and nurse practitioners that 
provides care as part of a team that in-
cludes physicians, nurses, physician assist-
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•AMDT. NO. 2786 
ants, pharmacists, and other health and 
social services staff as appropriate who 
have experience providing home-based pri-
mary care to applicable beneficiaries, make 
in-home visits, and are available 24 hours 
per day, 7 days per week to carry out 
plans of care that are tailored to the indi-
vidual beneficiary’s chronic conditions and 
designed to achieve the results in sub-
section (a); 
‘‘(ii) is organized at least in part for 
the purpose of providing physicians’ serv-
ices; 
‘‘(iii) has documented experience in 
providing home-based primary care serv-
ices to high-cost chronically ill bene-
ficiaries, as determined appropriate by the 
Secretary; 
‘‘(iv) furnishes services to at least 200 
applicable beneficiaries (as defined in sub-
section (d)) during each year of the dem-
onstration program; 
‘‘(v) has entered into an agreement 
with the Secretary; 
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•AMDT. NO. 2786 
‘‘(vi) uses electronic health informa-
tion systems, remote monitoring, and mo-
bile diagnostic technology; and 
‘‘(vii) meets such other criteria as the 
Secretary determines to be appropriate to 
participate in the demonstration program. 
The entity shall report on quality measures (in 
such form, manner, and frequency as specified 
by the Secretary, which may be for the group, 
for providers of services and suppliers, or both) 
and report to the Secretary (in a form, manner, 
and frequency as specified by the Secretary) 
such data as the Secretary determines appro-
priate to monitor and evaluate the demonstra-
tion program. 
‘‘(B) PHYSICIAN.—The term ‘physician’ in-
cludes, except as the Secretary may otherwise 
provide, any individual who furnishes services 
for which payment may be made as physicians’ 
services and has the medical training or experi-
ence to fulfill the physician’s role described in 
subparagraph (A)(i). 
‘‘(2) PARTICIPATION OF NURSE PRACTITIONERS 
AND PHYSICIAN ASSISTANTS.—Nothing in this sec-
tion shall be construed to prevent a nurse practi-
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•AMDT. NO. 2786 
tioner or physician assistant from participating in, 
or leading, a home-based primary care team as part 
of an independence at home medical practice if— 
‘‘(A) all the requirements of this section 
are met; 
‘‘(B) the nurse practitioner or physician 
assistant, as the case may be, is acting con-
sistent with State law; and 
‘‘(C) the nurse practitioner or physician 
assistant has the medical training or experience 
to fulfill the nurse practitioner or physician as-
sistant role described in paragraph (1)(A)(i). 
‘‘(3) INCLUSION OF PROVIDERS AND PRACTI-
TIONERS.—Nothing in this subsection shall be con-
strued as preventing an independence at home med-
ical practice from including a provider of services or 
a participating practitioner described in section 
1842(b)(18)(C) that is affiliated with the practice 
under an arrangement structured so that such pro-
vider of services or practitioner participates in the 
demonstration program and shares in any savings 
under the demonstration program. 
‘‘(4) QUALITY
AND
PERFORMANCE
STAND-
ARDS.—The Secretary shall develop quality perform-
ance standards for independence at home medical 
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•AMDT. NO. 2786 
practices participating in the demonstration pro-
gram. 
‘‘(c) PAYMENT METHODOLOGY.— 
‘‘(1) ESTABLISHMENT
OF
TARGET
SPENDING 
LEVEL.—The Secretary shall establish an estimated 
annual spending target, for the amount the Sec-
retary estimates would have been spent in the ab-
sence of the demonstration, for items and services 
covered under parts A and B furnished to applicable 
beneficiaries for each qualifying independence at 
home medical practice under this section. Such 
spending targets shall be determined on a per capita 
basis. Such spending targets shall include a risk cor-
ridor that takes into account normal variation in ex-
penditures for items and services covered under 
parts A and B furnished to such beneficiaries with 
the size of the corridor being related to the number 
of applicable beneficiaries furnished services by each 
independence at home medical practice. The spend-
ing targets may also be adjusted for other factors as 
the Secretary determines appropriate. 
‘‘(2) INCENTIVE
PAYMENTS.—Subject to per-
formance on quality measures, a qualifying inde-
pendence at home medical practice is eligible to re-
ceive an incentive payment under this section if ac-
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•AMDT. NO. 2786 
tual expenditures for a year for the applicable bene-
ficiaries it enrolls are less than the estimated spend-
ing target established under paragraph (1) for such 
year. An incentive payment for such year shall be 
equal to a portion (as determined by the Secretary) 
of the amount by which actual expenditures (includ-
ing incentive payments under this paragraph) for 
applicable beneficiaries under parts A and B for 
such year are estimated to be less than 5 percent 
less than the estimated spending target for such 
year, as determined under paragraph (1). 
‘‘(d) APPLICABLE BENEFICIARIES.— 
‘‘(1) DEFINITION.—In this section, the term 
‘applicable beneficiary’ means, with respect to a 
qualifying independence at home medical practice, 
an individual who the practice has determined— 
‘‘(A) is entitled to benefits under part A 
and enrolled for benefits under part B; 
‘‘(B) is not enrolled in a Medicare Advan-
tage plan under part C or a PACE program 
under section 1894; 
‘‘(C) has 2 or more chronic illnesses, such 
as congestive heart failure, diabetes, other de-
mentias designated by the Secretary, chronic 
obstructive pulmonary disease, ischemic heart 
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•AMDT. NO. 2786 
disease, 
stroke, 
Alzheimer’s 
Disease 
and 
neurodegenerative diseases, and other diseases 
and conditions designated by the Secretary 
which result in high costs under this title; 
‘‘(D) within the past 12 months has had a 
nonelective hospital admission; 
‘‘(E) within the past 12 months has re-
ceived acute or subacute rehabilitation services; 
‘‘(F) has 2 or more functional depend-
encies requiring the assistance of another per-
son (such as bathing, dressing, toileting, walk-
ing, or feeding); and 
‘‘(G) meets such other criteria as the Sec-
retary determines appropriate. 
‘‘(2) PATIENT
ELECTION
TO
PARTICIPATE.— 
The Secretary shall determine an appropriate meth-
od of ensuring that applicable beneficiaries have 
agreed to enroll in an independence at home medical 
practice under the demonstration program. Enroll-
ment in the demonstration program shall be vol-
untary. 
‘‘(3) BENEFICIARY
ACCESS
TO
SERVICES.— 
Nothing in this section shall be construed as encour-
aging physicians or nurse practitioners to limit ap-
plicable beneficiary access to services covered under 
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•AMDT. NO. 2786 
this title and applicable beneficiaries shall not be re-
quired to relinquish access to any benefit under this 
title as a condition of receiving services from an 
independence at home medical practice. 
‘‘(e) IMPLEMENTATION.— 
‘‘(1) STARTING DATE.—The demonstration pro-
gram shall begin no later than January 1, 2012. An 
agreement with an independence at home medical 
practice under the demonstration program may 
cover not more than a 3-year period. 
‘‘(2) NO
PHYSICIAN
DUPLICATION
IN
DEM-
ONSTRATION PARTICIPATION.—The Secretary shall 
not pay an independence at home medical practice 
under this section that participates in section 1899. 
‘‘(3) NO BENEFICIARY DUPLICATION IN DEM-
ONSTRATION PARTICIPATION.—The Secretary shall 
ensure that no applicable beneficiary enrolled in an 
independence at home medical practice under this 
section is participating in the programs under sec-
tion 1899. 
‘‘(4) PREFERENCE.—In approving an independ-
ence at home medical practice, the Secretary shall 
give preference to practices that are— 
‘‘(A) located in high-cost areas of the 
country; 
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•AMDT. NO. 2786 
‘‘(B) have experience in furnishing health 
care services to applicable beneficiaries in the 
home; and 
‘‘(C) use electronic medical records, health 
information technology, and individualized plans 
of care. 
‘‘(5) LIMITATION ON NUMBER OF PRACTICES.— 
In selecting qualified independence at home medical 
practices to participate under the demonstration pro-
gram, the Secretary shall limit the number of such 
practices so that the number of applicable bene-
ficiaries that may participate in the demonstration 
program does not exceed 10,000. 
‘‘(6) WAIVER.—The Secretary may waive such 
provisions of this title and title XI as the Secretary 
determines necessary in order to implement the dem-
onstration program. 
‘‘(7) ADMINISTRATION.—Chapter 35 of title 44, 
United States Code, shall not apply to this section. 
‘‘(f) EVALUATION AND MONITORING.— 
‘‘(1) IN GENERAL.—The Secretary shall evalu-
ate each independence at home medical practice 
under the demonstration program to assess whether 
the practice achieved the results described in sub-
section (a). 
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•AMDT. NO. 2786 
‘‘(2) 
MONITORING
APPLICABLE
BENE-
FICIARIES.—The Secretary may monitor data on ex-
penditures and quality of services under this title 
after an applicable beneficiary discontinues receiving 
services under this title through a qualifying inde-
pendence at home medical practice. 
‘‘(g) REPORTS TO CONGRESS.—The Secretary shall 
conduct an independent evaluation of the demonstration 
program and submit to Congress a final report, including 
best practices under the demonstration program. Such re-
port shall include an analysis of the demonstration pro-
gram on coordination of care, expenditures under this 
title, applicable beneficiary access to services, and the 
quality of health care services provided to applicable bene-
ficiaries. 
‘‘(h) FUNDING.—For purposes of administering and 
carrying out the demonstration program, other than for 
payments for items and services furnished under this title 
and incentive payments under subsection (c), in addition 
to funds otherwise appropriated, there shall be transferred 
to the Secretary for the Center for Medicare & Medicaid 
Services Program Management Account from the Federal 
Hospital Insurance Trust Fund under section 1817 and 
the Federal Supplementary Medical Insurance Trust 
Fund under section 1841 (in proportions determined ap-
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•AMDT. NO. 2786 
propriate by the Secretary) $5,000,000 for each of fiscal 
years 2010 through 2015. Amounts transferred under this 
subsection for a fiscal year shall be available until ex-
pended. 
‘‘(i) TERMINATION.— 
‘‘(1) MANDATORY
TERMINATION.—The Sec-
retary shall terminate an agreement with an inde-
pendence at home medical practice if— 
‘‘(A) the Secretary estimates or determines 
that such practice will not receive an incentive 
payment for the second of 2 consecutive years 
under the demonstration program; or 
‘‘(B) such practice fails to meet quality 
standards during any year of the demonstration 
program. 
‘‘(2) PERMISSIVE
TERMINATION.—The Sec-
retary may terminate an agreement with an inde-
pendence at home medical practice for such other 
reasons determined appropriate by the Secretary.’’. 
SEC. 3025. HOSPITAL READMISSIONS REDUCTION PRO-
GRAM. 
(a) IN GENERAL.—Section 1886 of the Social Secu-
rity Act (42 U.S.C. 1395ww), as amended by sections 
3001 and 3008, is amended by adding at the end the fol-
lowing new subsection: 
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•AMDT. NO. 2786 
‘‘(q) HOSPITAL READMISSIONS REDUCTION PRO-
GRAM.— 
‘‘(1) IN GENERAL.—With respect to payment 
for discharges from an applicable hospital (as de-
fined in paragraph (5)(C)) occurring during a fiscal 
year beginning on or after October 1, 2012, in order 
to account for excess readmissions in the hospital, 
the Secretary shall reduce the payments that would 
otherwise be made to such hospital under subsection 
(d) (or section 1814(b)(3), as the case may be) for 
such a discharge by an amount equal to the product 
of— 
‘‘(A) the base operating DRG payment 
amount (as defined in paragraph (2)) for the 
discharge; and 
‘‘(B) the adjustment factor (described in 
paragraph (3)(A)) for the hospital for the fiscal 
year. 
‘‘(2) BASE OPERATING DRG PAYMENT AMOUNT 
DEFINED.— 
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (B), in this subsection, the term 
‘base operating DRG payment amount’ means, 
with respect to a hospital for a fiscal year— 
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•AMDT. NO. 2786 
‘‘(i) the payment amount that would 
otherwise be made under subsection (d) 
(determined without regard to subsection 
(o)) for a discharge if this subsection did 
not apply; reduced by 
‘‘(ii) any portion of such payment 
amount that is attributable to payments 
under paragraphs (5)(A), (5)(B), (5)(F), 
and (12) of subsection (d). 
‘‘(B) SPECIAL RULES FOR CERTAIN HOS-
PITALS.— 
‘‘(i) SOLE
COMMUNITY
HOSPITALS 
AND
MEDICARE-DEPENDENT, 
SMALL 
RURAL HOSPITALS.—In the case of a medi-
care-dependent, small rural hospital (with 
respect to discharges occurring during fis-
cal years 2012 and 2013) or a sole com-
munity hospital, in applying subparagraph 
(A)(i), the payment amount that would 
otherwise be made under subsection (d) 
shall be determined without regard to sub-
paragraphs (I) and (L) of subsection 
(b)(3) and subparagraphs (D) and (G) of 
subsection (d)(5). 
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•AMDT. NO. 2786 
‘‘(ii) HOSPITALS
PAID
UNDER
SEC-
TION 1814.—In the case of a hospital that 
is paid under section 1814(b)(3), the Sec-
retary may exempt such hospitals provided 
that States paid under such section submit 
an annual report to the Secretary describ-
ing how a similar program in the State for 
a 
participating 
hospital 
or 
hospitals 
achieves or surpasses the measured results 
in terms of patient health outcomes and 
cost savings established herein with respect 
to this section. 
‘‘(3) ADJUSTMENT FACTOR.— 
‘‘(A) IN GENERAL.—For purposes of para-
graph (1), the adjustment factor under this 
paragraph for an applicable hospital for a fiscal 
year is equal to the greater of— 
‘‘(i) the ratio described in subpara-
graph (B) for the hospital for the applica-
ble period (as defined in paragraph (5)(D)) 
for such fiscal year; or 
‘‘(ii) the floor adjustment factor speci-
fied in subparagraph (C). 
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•AMDT. NO. 2786 
‘‘(B) RATIO.—The ratio described in this 
subparagraph for a hospital for an applicable 
period is equal to 1 minus the ratio of— 
‘‘(i) the aggregate payments for ex-
cess readmissions (as defined in paragraph 
(4)(A)) with respect to an applicable hos-
pital for the applicable period; and 
‘‘(ii) the aggregate payments for all 
discharges 
(as 
defined 
in 
paragraph 
(4)(B)) with respect to such applicable 
hospital for such applicable period. 
‘‘(C) FLOOR ADJUSTMENT FACTOR.—For 
purposes of subparagraph (A), the floor adjust-
ment factor specified in this subparagraph 
for— 
‘‘(i) fiscal year 2013 is 0.99; 
‘‘(ii) fiscal year 2014 is 0.98; or 
‘‘(iii) fiscal year 2015 and subsequent 
fiscal years is 0.97. 
‘‘(4) AGGREGATE PAYMENTS, EXCESS READMIS-
SION RATIO DEFINED.—For purposes of this sub-
section: 
‘‘(A) AGGREGATE PAYMENTS FOR EXCESS 
READMISSIONS.—The term ‘aggregate payments 
for excess readmissions’ means, for a hospital 
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•AMDT. NO. 2786 
for an applicable period, the sum, for applicable 
conditions (as defined in paragraph (5)(A)), of 
the product, for each applicable condition, of— 
‘‘(i) the base operating DRG payment 
amount for such hospital for such applica-
ble period for such condition; 
‘‘(ii) the number of admissions for 
such condition for such hospital for such 
applicable period; and 
‘‘(iii) the excess readmissions ratio (as 
defined in subparagraph (C)) for such hos-
pital for such applicable period minus 1. 
‘‘(B) AGGREGATE PAYMENTS FOR ALL DIS-
CHARGES.—The term ‘aggregate payments for 
all discharges’ means, for a hospital for an ap-
plicable period, the sum of the base operating 
DRG payment amounts for all discharges for 
all conditions from such hospital for such appli-
cable period. 
‘‘(C) EXCESS READMISSION RATIO.— 
‘‘(i) IN GENERAL.—Subject to clause 
(ii), the term ‘excess readmissions ratio’ 
means, with respect to an applicable condi-
tion for a hospital for an applicable period, 
the ratio (but not less than 1.0) of— 
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•AMDT. NO. 2786 
‘‘(I) the risk adjusted readmis-
sions based on actual readmissions, as 
determined consistent with a readmis-
sion measure methodology that has 
been 
endorsed 
under 
paragraph 
(5)(A)(ii)(I), for an applicable hospital 
for such condition with respect to 
such applicable period; to 
‘‘(II) the risk adjusted expected 
readmissions 
(as 
determined 
con-
sistent with such a methodology) for 
such hospital for such condition with 
respect to such applicable period. 
‘‘(ii) EXCLUSION
OF
CERTAIN
RE-
ADMISSIONS.—For purposes of clause (i), 
with respect to a hospital, excess readmis-
sions shall not include readmissions for an 
applicable condition for which there are 
fewer than a minimum number (as deter-
mined by the Secretary) of discharges for 
such applicable condition for the applicable 
period and such hospital. 
‘‘(5) DEFINITIONS.—For purposes of this sub-
section: 
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•AMDT. NO. 2786 
‘‘(A) APPLICABLE CONDITION.—The term 
‘applicable condition’ means, subject to sub-
paragraph (B), a condition or procedure se-
lected by the Secretary among conditions and 
procedures for which— 
‘‘(i) readmissions (as defined in sub-
paragraph (E)) that represent conditions 
or procedures that are high volume or high 
expenditures under this title (or other cri-
teria specified by the Secretary); and 
‘‘(ii) measures of such readmissions— 
‘‘(I) have been endorsed by the 
entity with a contract under section 
1890(a); and 
‘‘(II) such endorsed measures 
have exclusions for readmissions that 
are unrelated to the prior discharge 
(such as a planned readmission or 
transfer to another applicable hos-
pital). 
‘‘(B) EXPANSION OF APPLICABLE CONDI-
TIONS.—Beginning with fiscal year 2015, the 
Secretary shall, to the extent practicable, ex-
pand the applicable conditions beyond the 3 
conditions for which measures have been en-
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•AMDT. NO. 2786 
dorsed as described in subparagraph (A)(ii)(I) 
as of the date of the enactment of this sub-
section to the additional 4 conditions that have 
been identified by the Medicare Payment Advi-
sory Commission in its report to Congress in 
June 2007 and to other conditions and proce-
dures as determined appropriate by the Sec-
retary. In expanding such applicable conditions, 
the Secretary shall seek the endorsement de-
scribed in subparagraph (A)(ii)(I) but may 
apply such measures without such an endorse-
ment in the case of a specified area or medical 
topic determined appropriate by the Secretary 
for which a feasible and practical measure has 
not been endorsed by the entity with a contract 
under section 1890(a) as long as due consider-
ation is given to measures that have been en-
dorsed or adopted by a consensus organization 
identified by the Secretary. 
‘‘(C) APPLICABLE
HOSPITAL.—The term 
‘applicable hospital’ means a subsection (d) hos-
pital or a hospital that is paid under section 
1814(b)(3), as the case may be. 
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•AMDT. NO. 2786 
‘‘(D) APPLICABLE PERIOD.—The term ‘ap-
plicable period’ means, with respect to a fiscal 
year, such period as the Secretary shall specify. 
‘‘(E) READMISSION.—The term ‘readmis-
sion’ means, in the case of an individual who is 
discharged from an applicable hospital, the ad-
mission of the individual to the same or another 
applicable hospital within a time period speci-
fied by the Secretary from the date of such dis-
charge. Insofar as the discharge relates to an 
applicable condition for which there is an en-
dorsed measure described in subparagraph 
(A)(ii)(I), such time period (such as 30 days) 
shall be consistent with the time period speci-
fied for such measure. 
‘‘(6) REPORTING HOSPITAL SPECIFIC INFORMA-
TION.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
make information available to the public re-
garding readmission rates of each subsection 
(d) hospital under the program. 
‘‘(B) OPPORTUNITY TO REVIEW AND SUB-
MIT CORRECTIONS.—The Secretary shall ensure 
that a subsection (d) hospital has the oppor-
tunity to review, and submit corrections for, the 
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•AMDT. NO. 2786 
information to be made public with respect to 
the hospital under subparagraph (A) prior to 
such information being made public. 
‘‘(C) WEBSITE.—Such information shall be 
posted on the Hospital Compare Internet 
website in an easily understandable format. 
‘‘(7) LIMITATIONS ON REVIEW.—There shall be 
no administrative or judicial review under section 
1869, section 1878, or otherwise of the following: 
‘‘(A) The determination of base operating 
DRG payment amounts. 
‘‘(B) The methodology for determining the 
adjustment factor under paragraph (3), includ-
ing excess readmissions ratio under paragraph 
(4)(C), aggregate payments for excess readmis-
sions under paragraph (4)(A), and aggregate 
payments for all discharges under paragraph 
(4)(B), and applicable periods and applicable 
conditions under paragraph (5). 
‘‘(C) The measures of readmissions as de-
scribed in paragraph (5)(A)(ii). 
‘‘(8) 
READMISSION
RATES
FOR
ALL
PA-
TIENTS.— 
‘‘(A) CALCULATION
OF
READMISSION.— 
The Secretary shall calculate readmission rates 
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•AMDT. NO. 2786 
for all patients (as defined in subparagraph 
(D)) for a specified hospital (as defined in sub-
paragraph (D)(ii)) for an applicable condition 
(as defined in paragraph (5)(B)) and other con-
ditions deemed appropriate by the Secretary for 
an applicable period (as defined in paragraph 
(5)(D)) in the same manner as used to cal-
culate such readmission rates for hospitals with 
respect to this title and posted on the CMS 
Hospital Compare website. 
‘‘(B) POSTING OF HOSPITAL SPECIFIC ALL 
PATIENT READMISSION RATES.—The Secretary 
shall make information on all patient readmis-
sion rates calculated under subparagraph (A) 
available on the CMS Hospital Compare website 
in a form and manner determined appropriate 
by the Secretary. The Secretary may also make 
other information determined appropriate by 
the Secretary available on such website. 
‘‘(C) HOSPITAL SUBMISSION OF ALL PA-
TIENT DATA.— 
‘‘(i) Except as provided for in clause 
(ii), each specified hospital (as defined in 
subparagraph (D)(ii)) shall submit to the 
Secretary, in a form, manner and time 
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•AMDT. NO. 2786 
specified by the Secretary, data and infor-
mation determined necessary by the Sec-
retary for the Secretary to calculate the all 
patient readmission rates described in sub-
paragraph (A). 
‘‘(ii) Instead of a specified hospital 
submitting to the Secretary the data and 
information described in clause (i), such 
data and information may be submitted to 
the Secretary, on behalf of such a specified 
hospital, by a state or an entity determined 
appropriate by the Secretary. 
‘‘(D) DEFINITIONS.—For purposes of this 
paragraph: 
‘‘(i) The term ‘all patients’ means pa-
tients who are treated on an inpatient 
basis and discharged from a specified hos-
pital (as defined in clause (ii)). 
‘‘(ii) The term ‘specified hospital’ 
means a subsection (d) hospital, hospitals 
described in clauses (i) through (v) of sub-
section (d)(1)(B) and, as determined fea-
sible and appropriate by the Secretary, 
other hospitals not otherwise described in 
this subparagraph.’’. 
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•AMDT. NO. 2786 
(b) QUALITY IMPROVEMENT.—Part S of title III of 
the Public Health Service Act, as amended by section 
3015, is further amended by adding at the end the fol-
lowing: 
‘‘SEC. 399KK. QUALITY IMPROVEMENT PROGRAM FOR HOS-
PITALS WITH A HIGH SEVERITY ADJUSTED 
READMISSION RATE. 
‘‘(a) ESTABLISHMENT.— 
‘‘(1) IN
GENERAL.—Not later than 2 years 
after the date of enactment of this section, the Sec-
retary shall make available a program for eligible 
hospitals to improve their readmission rates through 
the use of patient safety organizations (as defined in 
section 921(4)). 
‘‘(2) ELIGIBLE
HOSPITAL
DEFINED.—In this 
subsection, the term ‘eligible hospital’ means a hos-
pital that the Secretary determines has a high rate 
of risk adjusted readmissions for the conditions de-
scribed in section 1886(q)(8)(A) of the Social Secu-
rity Act and has not taken appropriate steps to re-
duce such readmissions and improve patient safety 
as evidenced through historically high rates of re-
admissions, as determined by the Secretary. 
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•AMDT. NO. 2786 
‘‘(3) RISK ADJUSTMENT.—The Secretary shall 
utilize appropriate risk adjustment measures to de-
termine eligible hospitals. 
‘‘(b) REPORT TO THE SECRETARY.—As determined 
appropriate by the Secretary, eligible hospitals and patient 
safety organizations working with those hospitals shall re-
port to the Secretary on the processes employed by the 
hospital to improve readmission rates and the impact of 
such processes on readmission rates.’’. 
SEC. 3026. COMMUNITY-BASED CARE TRANSITIONS PRO-
GRAM. 
(a) IN GENERAL.—The Secretary shall establish a 
Community-Based Care Transitions Program under which 
the Secretary provides funding to eligible entities that fur-
nish improved care transition services to high-risk Medi-
care beneficiaries. 
(b) DEFINITIONS.—In this section: 
(1) ELIGIBLE ENTITY.—The term ‘‘eligible enti-
ty’’ means the following: 
(A) 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))) identified by 
the Secretary as having a high readmission 
rate, such as under section 1886(q) of the So-
cial Security Act, as added by section 3025. 
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•AMDT. NO. 2786 
(B) An appropriate community-based orga-
nization that provides care transition services 
under this section across a continuum of care 
through arrangements with subsection (d) hos-
pitals (as so defined) to furnish the services de-
scribed in subsection (c)(2)(B)(i) and whose 
governing body includes sufficient representa-
tion of multiple health care stakeholders (in-
cluding consumers). 
(2) HIGH-RISK MEDICARE BENEFICIARY.—The 
term ‘‘high-risk Medicare beneficiary’’ means a 
Medicare beneficiary who has attained a minimum 
hierarchical condition category score, as determined 
by the Secretary, based on a diagnosis of multiple 
chronic conditions or other risk factors associated 
with a hospital readmission or substandard transi-
tion into post-hospitalization care, which may in-
clude 1 or more of the following: 
(A) Cognitive impairment. 
(B) Depression. 
(C) A history of multiple readmissions. 
(D) Any other chronic disease or risk fac-
tor as determined by the Secretary. 
(3) 
MEDICARE
BENEFICIARY.—The 
term 
‘‘Medicare beneficiary’’ means an individual who is 
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•AMDT. NO. 2786 
entitled to benefits under part A of title XVIII of 
the Social Security Act (42 U.S.C. 1395 et seq.) and 
enrolled under part B of such title, but not enrolled 
under part C of such title. 
(4) PROGRAM.—The term ‘‘program’’ means 
the program conducted under this section. 
(5) READMISSION.—The term ‘‘readmission’’ 
has the meaning given such term in section 
1886(q)(5)(E) of the Social Security Act, as added 
by section 3025. 
(6) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of Health and Human Services. 
(c) REQUIREMENTS.— 
(1) DURATION.— 
(A) IN GENERAL.—The program shall be 
conducted for a 5-year period, beginning Janu-
ary 1, 2011. 
(B) EXPANSION.—The Secretary may ex-
pand the duration and the scope of the pro-
gram, to the extent determined appropriate by 
the Secretary, if the Secretary determines (and 
the Chief Actuary of the Centers for Medicare 
& Medicaid Services, with respect to spending 
under this title, certifies) that such expansion 
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•AMDT. NO. 2786 
would reduce spending under this title without 
reducing quality. 
(2) APPLICATION; PARTICIPATION.— 
(A) IN GENERAL.— 
(i) APPLICATION.—An eligible entity 
seeking to participate in the program shall 
submit an application to the Secretary at 
such time, in such manner, and containing 
such information as the Secretary may re-
quire. 
(ii) PARTNERSHIP.—If an eligible en-
tity is a hospital, such hospital shall enter 
into a partnership with a community-based 
organization to participate in the program. 
(B) INTERVENTION
PROPOSAL.—Subject 
to subparagraph (C), an application submitted 
under subparagraph (A)(i) shall include a de-
tailed proposal for at least 1 care transition 
intervention, which may include the following: 
(i) Initiating care transition services 
for a high-risk Medicare beneficiary not 
later than 24 hours prior to the discharge 
of the beneficiary from the eligible entity. 
(ii) Arranging timely post-discharge 
follow-up services to the high-risk Medicare 
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•AMDT. NO. 2786 
beneficiary to provide the beneficiary (and, 
as appropriate, the primary caregiver of 
the beneficiary) with information regarding 
responding to symptoms that may indicate 
additional health problems or a deterio-
rating condition. 
(iii) Providing the high-risk Medicare 
beneficiary (and, as appropriate, the pri-
mary caregiver of the beneficiary) with as-
sistance to ensure productive and timely 
interactions between patients and post- 
acute and outpatient providers. 
(iv) Assessing and actively engaging 
with a high-risk Medicare beneficiary (and, 
as appropriate, the primary caregiver of 
the beneficiary) through the provision of 
self-management support and relevant in-
formation that is specific to the bene-
ficiary’s condition. 
(v) Conducting comprehensive medica-
tion review and management (including, if 
appropriate, counseling and self-manage-
ment support). 
(C) LIMITATION.—A care transition inter-
vention proposed under subparagraph (B) may 
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•AMDT. NO. 2786 
not include payment for services required under 
the discharge planning process described in sec-
tion 1861(ee) of the Social Security Act (42 
U.S.C. 1395x(ee)). 
(3) SELECTION.—In selecting eligible entities to 
participate in the program, the Secretary shall give 
priority to eligible entities that— 
(A) participate in a program administered 
by the Administration on Aging to provide con-
current care transitions interventions with mul-
tiple hospitals and practitioners; or 
(B) provide services to medically under-
served populations, small communities, and 
rural areas. 
(d) IMPLEMENTATION.—Notwithstanding any other 
provision of law, the Secretary may implement the provi-
sions of this section by program instruction or otherwise. 
(e) WAIVER AUTHORITY.—The Secretary may waive 
such requirements of titles XI and XVIII of the Social 
Security Act as may be necessary to carry out the pro-
gram. 
(f) FUNDING.—For purposes of carrying out this sec-
tion, the Secretary of Health and Human Services shall 
provide for the transfer, from the Federal Hospital Insur-
ance Trust Fund under section 1817 of the Social Secu-
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•AMDT. NO. 2786 
rity Act (42 U.S.C. 1395i) and the Federal Supple-
mentary Medical Insurance Trust Fund under section 
1841 of such Act (42 U.S.C. 1395t), in such proportion 
as the Secretary determines appropriate, of $500,000,000, 
to the Centers for Medicare & Medicaid Services Program 
Management Account for the period of fiscal years 2011 
through 2015. Amounts transferred under the preceding 
sentence shall remain available until expended. 
SEC. 3027. EXTENSION OF GAINSHARING DEMONSTRATION. 
(a) IN GENERAL.—Subsection (d)(3) of section 5007 
of the Deficit Reduction Act of 2005 (Public Law 109– 
171) is amended by inserting ‘‘(or September 30, 2011, 
in the case of a demonstration project in operation as of 
October 1, 2008)’’ after ‘‘December 31, 2009’’. 
(b) FUNDING.— 
(1) IN
GENERAL.—Subsection (f)(1) of such 
section is amended by inserting ‘‘and for fiscal year 
2010, $1,600,000,’’ after ‘‘$6,000,000,’’. 
(2) AVAILABILITY.—Subsection (f)(2) of such 
section is amended by striking ‘‘2010’’ and inserting 
‘‘2014 or until expended’’. 
(c) REPORTS.— 
(1) QUALITY
IMPROVEMENT
AND
SAVINGS.— 
Subsection (e)(3) of such section is amended by 
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•AMDT. NO. 2786 
striking ‘‘December 1, 2008’’ and inserting ‘‘March 
31, 2011’’. 
(2) FINAL REPORT.—Subsection (e)(4) of such 
section is amended by striking ‘‘May 1, 2010’’ and 
inserting ‘‘March 31, 2013’’. 
Subtitle B—Improving Medicare 
for Patients and Providers 
PART I—ENSURING BENEFICIARY ACCESS TO 
PHYSICIAN CARE AND OTHER SERVICES 
SEC. 3101. INCREASE IN THE PHYSICIAN PAYMENT UPDATE. 
Section 1848(d) of the Social Security Act (42 U.S.C. 
1395w–4(d)) is amended by adding at the end the fol-
lowing new paragraph: 
‘‘(10) UPDATE FOR 2010.— 
‘‘(A) IN GENERAL.—Subject to paragraphs 
(7)(B), (8)(B), and (9)(B), in lieu of the update 
to the single conversion factor established in 
paragraph (1)(C) that would otherwise apply 
for 2010, the update to the single conversion 
factor shall be 0.5 percent. 
‘‘(B) NO
EFFECT
ON
COMPUTATION
OF 
CONVERSION
FACTOR
FOR
2011
AND
SUBSE-
QUENT
YEARS.—The conversion factor under 
this subsection shall be computed under para-
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•AMDT. NO. 2786 
graph (1)(A) for 2011 and subsequent years as 
if subparagraph (A) had never applied.’’. 
SEC. 3102. EXTENSION OF THE WORK GEOGRAPHIC INDEX 
FLOOR AND REVISIONS TO THE PRACTICE 
EXPENSE GEOGRAPHIC ADJUSTMENT UNDER 
THE MEDICARE PHYSICIAN FEE SCHEDULE. 
(a) 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 ‘‘before Janu-
ary 1, 2010’’ and inserting ‘‘before January 1, 2011’’. 
(b) PRACTICE EXPENSE GEOGRAPHIC ADJUSTMENT 
FOR 2010 AND SUBSEQUENT YEARS.—Section 1848(e)(1) 
of the Social Security Act (42 U.S.C. 1395w4(e)(1)) is 
amended— 
(1) in subparagraph (A), by striking ‘‘and (G)’’ 
and inserting ‘‘(G), and (H)’’; and 
(2) by adding at the end the following new sub-
paragraph: 
‘‘(H) PRACTICE
EXPENSE
GEOGRAPHIC 
ADJUSTMENT
FOR
2010
AND
SUBSEQUENT 
YEARS.— 
‘‘(i) FOR 2010.—Subject to clause (iii), 
for services furnished during 2010, the em-
ployee wage and rent portions of the prac-
tice expense geographic index described in 
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•AMDT. NO. 2786 
subparagraph (A)(i) shall reflect 3⁄4 of the 
difference between the relative costs of em-
ployee wages and rents in each of the dif-
ferent fee schedule areas and the national 
average of such employee wages and rents. 
‘‘(ii) FOR
2011.—Subject to clause 
(iii), for services furnished during 2011, 
the employee wage and rent portions of the 
practice expense geographic index de-
scribed in subparagraph (A)(i) shall reflect 
1⁄2 of the difference between the relative 
costs of employee wages and rents in each 
of the different fee schedule areas and the 
national average of such employee wages 
and rents. 
‘‘(iii) HOLD HARMLESS.—The practice 
expense portion of the geographic adjust-
ment factor applied in a fee schedule area 
for services furnished in 2010 or 2011 
shall not, as a result of the application of 
clause (i) or (ii), be reduced below the 
practice expense portion of the geographic 
adjustment factor under subparagraph 
(A)(i) (as calculated prior to the applica-
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•AMDT. NO. 2786 
tion of such clause (i) or (ii), respectively) 
for such area for such year. 
‘‘(iv) ANALYSIS.—The Secretary shall 
analyze current methods of establishing 
practice expense geographic adjustments 
under subparagraph (A)(i) and evaluate 
data that fairly and reliably establishes 
distinctions in the costs of operating a 
medical practice in the different fee sched-
ule areas. Such analysis shall include an 
evaluation of the following: 
‘‘(I) The feasibility of using ac-
tual data or reliable survey data devel-
oped by medical organizations on the 
costs of operating a medical practice, 
including office rents and non-physi-
cian staff wages, in different fee 
schedule areas. 
‘‘(II) The office expense portion 
of the practice expense geographic ad-
justment described in subparagraph 
(A)(i), including the extent to which 
types of office expenses are deter-
mined in local markets instead of na-
tional markets. 
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•AMDT. NO. 2786 
‘‘(III) The weights assigned to 
each of the categories within the prac-
tice expense geographic adjustment 
described in subparagraph (A)(i). 
‘‘(v) REVISION FOR 2012 AND SUBSE-
QUENT YEARS.—As a result of the analysis 
described in clause (iv), the Secretary 
shall, not later than January 1, 2012, 
make appropriate adjustments to the prac-
tice expense geographic adjustment de-
scribed in subparagraph (A)(i) to ensure 
accurate geographic adjustments across fee 
schedule areas, including— 
‘‘(I) basing the office rents com-
ponent and its weight on office ex-
penses that vary among fee schedule 
areas; and 
‘‘(II) considering a representative 
range of professional and non-profes-
sional personnel employed in a med-
ical office based on the use of the 
American Community Survey data or 
other reliable data for wage adjust-
ments. 
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•AMDT. NO. 2786 
Such adjustments shall be made without 
regard to adjustments made pursuant to 
clauses (i) and (ii) and shall be made in a 
budget neutral manner.’’. 
SEC. 3103. EXTENSION OF EXCEPTIONS PROCESS FOR 
MEDICARE THERAPY CAPS. 
Section 1833(g)(5) of the Social Security Act (42 
U.S.C. 1395l(g)(5)) is amended by striking ‘‘December 
31, 2009’’ and inserting ‘‘December 31, 2010’’. 
SEC. 3104. EXTENSION OF PAYMENT FOR TECHNICAL COM-
PONENT OF CERTAIN PHYSICIAN PATHOL-
OGY SERVICES. 
Section 542(c) of the Medicare, Medicaid, and 
SCHIP Benefits Improvement and Protection Act of 2000 
(as enacted into law by section 1(a)(6) of Public Law 106– 
554), as amended by section 732 of the Medicare Prescrip-
tion Drug, Improvement, and Modernization Act of 2003 
(42 U.S.C. 1395w–4 note), section 104 of division B of 
the Tax Relief and Health Care Act of 2006 (42 U.S.C. 
1395w–4 note), section 104 of the Medicare, Medicaid, 
and SCHIP Extension Act of 2007 (Public Law 110– 
173), and section 136 of the Medicare Improvements for 
Patients and Providers Act of 2008 (Public Law 110– 
275), is amended by striking ‘‘and 2009’’ and inserting 
‘‘2009, and 2010’’. 
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•AMDT. NO. 2786 
SEC. 3106. EXTENSION OF CERTAIN PAYMENT RULES FOR 
LONG-TERM CARE HOSPITAL SERVICES AND 
OF MORATORIUM ON THE ESTABLISHMENT 
OF CERTAIN HOSPITALS AND FACILITIES. 
(a) EXTENSION OF CERTAIN PAYMENT RULES.— 
Section 114(c) of the Medicare, Medicaid, and SCHIP Ex-
tension Act of 2007 (42 U.S.C. 1395ww note), as amend-
ed by section 4302(a) of the American Recovery and Rein-
vestment Act (Public Law 111–5), is further amended by 
striking ‘‘3-year period’’ each place it appears and insert-
ing ‘‘4-year period’’. 
(b) 
EXTENSION
OF
MORATORIUM.—Section 
114(d)(1) of such Act (42 U.S.C. 1395ww note), in the 
matter preceding subparagraph (A), is amended by strik-
ing ‘‘3-year period’’ and inserting ‘‘4-year period’’. 
SEC. 3107. EXTENSION OF PHYSICIAN FEE SCHEDULE MEN-
TAL HEALTH ADD-ON. 
Section 138(a)(1) of the Medicare Improvements for 
Patients and Providers Act of 2008 (Public Law 110–275) 
is amended by striking ‘‘December 31, 2009’’ and insert-
ing ‘‘December 31, 2010’’. 
SEC. 3108. PERMITTING PHYSICIAN ASSISTANTS TO ORDER 
POST-HOSPITAL EXTENDED CARE SERVICES. 
(a) ORDERING POST-HOSPITAL EXTENDED CARE 
SERVICES.— 
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•AMDT. NO. 2786 
(1) IN GENERAL.—Section 1814(a)(2) of the 
Social Security Act (42 U.S.C. 1395f(a)(2)), in the 
matter preceding subparagraph (A), is amended by 
striking ‘‘or clinical nurse specialist’’ and inserting 
‘‘, a clinical nurse specialist, or a physician assistant 
(as those terms are defined in section 1861(aa)(5))’’ 
after ‘‘nurse practitioner’’. 
(2) 
CONFORMING
AMENDMENT.—Section 
1814(a) of the Social Security Act (42 U.S.C. 
1395f(a)) is amended, in the second sentence, by 
striking ‘‘or clinical nurse specialist’’ and inserting 
‘‘clinical nurse specialist, or physician assistant’’ 
after ‘‘nurse practitioner,’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to items and services furnished on 
or after January 1, 2011. 
SEC. 3109. EXEMPTION OF CERTAIN PHARMACIES FROM 
ACCREDITATION REQUIREMENTS. 
(a) IN GENERAL.—Section 1834(a)(20) of the Social 
Security Act (42 U.S.C. 1395m(a)(20)), as added by sec-
tion 154(b)(1)(A) of the Medicare Improvements for Pa-
tients and Providers Act of 2008 (Public Law 100–275), 
is amended— 
(1) in subparagraph (F)(i)— 
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•AMDT. NO. 2786 
(A) by inserting ‘‘and subparagraph (G)’’ 
after ‘‘clause (ii)’’; and 
(B) by inserting ‘‘, except that the Sec-
retary shall not require a pharmacy to have 
submitted to the Secretary such evidence of ac-
creditation prior to January 1, 2011’’ before 
the semicolon at the end; and 
(2) by adding at the end the following new sub-
paragraph: 
‘‘(G) APPLICATION OF ACCREDITATION RE-
QUIREMENT TO CERTAIN PHARMACIES.— 
‘‘(i) IN
GENERAL.—With respect to 
items and services furnished on or after 
January 1, 2011, in implementing quality 
standards under this paragraph— 
‘‘(I) subject to subclause (II), in 
applying such standards and the ac-
creditation requirement of subpara-
graph (F)(i) with respect to phar-
macies described in clause (ii) fur-
nishing such items and services, such 
standards and accreditation require-
ment shall not apply to such phar-
macies; and 
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•AMDT. NO. 2786 
‘‘(II) the Secretary may apply to 
such pharmacies an alternative ac-
creditation requirement established by 
the Secretary if the Secretary deter-
mines such alternative accreditation 
requirement is more appropriate for 
such pharmacies. 
‘‘(ii) 
PHARMACIES
DESCRIBED.—A 
pharmacy described in this clause is a 
pharmacy that meets each of the following 
criteria: 
‘‘(I) The total billings by the 
pharmacy for such items and services 
under this title are less than 5 percent 
of total pharmacy sales, as determined 
based on the average total pharmacy 
sales for the previous 3 calendar 
years, 3 fiscal years, or other yearly 
period specified by the Secretary. 
‘‘(II) The pharmacy has been en-
rolled under section 1866(j) as a sup-
plier of durable medical equipment, 
prosthetics, orthotics, and supplies, 
has been issued (which may include 
the renewal of) a provider number for 
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•AMDT. NO. 2786 
at least 5 years, and for which a final 
adverse action (as defined in section 
424.57(a) of title 42, Code of Federal 
Regulations) has not been imposed in 
the past 5 years. 
‘‘(III) The pharmacy submits to 
the Secretary an attestation, in a 
form and manner, and at a time, 
specified by the Secretary, that the 
pharmacy meets the criteria described 
in subclauses (I) and (II). Such attes-
tation shall be subject to section 1001 
of title 18, United States Code. 
‘‘(IV) The pharmacy agrees to 
submit materials as requested by the 
Secretary, or during the course of an 
audit conducted on a random sample 
of pharmacies selected annually, to 
verify that the pharmacy meets the 
criteria described in subclauses (I) 
and (II). Materials submitted under 
the preceding sentence shall include a 
certification by an accountant on be-
half of the pharmacy or the submis-
sion of tax returns filed by the phar-
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•AMDT. NO. 2786 
macy during the relevant periods, as 
requested by the Secretary.’’. 
(b) ADMINISTRATION.—Notwithstanding any other 
provision of law, the Secretary may implement the amend-
ments made by subsection (a) by program instruction or 
otherwise. 
(c) RULE OF CONSTRUCTION.—Nothing in the provi-
sions of or amendments made by this section shall be con-
strued as affecting the application of an accreditation re-
quirement for pharmacies to qualify for bidding in a com-
petitive acquisition area under section 1847 of the Social 
Security Act (42 U.S.C. 1395w–3). 
SEC. 3110. PART B SPECIAL ENROLLMENT PERIOD FOR DIS-
ABLED TRICARE BENEFICIARIES. 
(a) IN GENERAL.— 
(1) IN GENERAL.—Section 1837 of the Social 
Security Act (42 U.S.C. 1395p) is amended by add-
ing at the end the following new subsection: 
‘‘(l)(1) In the case of any individual who is a covered 
beneficiary (as defined in section 1072(5) of title 10, 
United States Code) at the time the individual is entitled 
to part A under section 226(b) or section 226A and who 
is eligible to enroll but who has elected not to enroll (or 
to be deemed enrolled) during the individual’s initial en-
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•AMDT. NO. 2786 
rollment period, there shall be a special enrollment period 
described in paragraph (2). 
‘‘(2) The special enrollment period described in this 
paragraph, with respect to an individual, is the 12-month 
period beginning on the day after the last day of the initial 
enrollment period of the individual or, if later, the 12- 
month period beginning with the month the individual is 
notified of enrollment under this section. 
‘‘(3) In the case of an individual who enrolls during 
the special enrollment period provided under paragraph 
(1), the coverage period under this part shall begin on the 
first day of the month in which the individual enrolls, or, 
at the option of the individual, the first month after the 
end of the individual’s initial enrollment period. 
‘‘(4) An individual may only enroll during the special 
enrollment period provided under paragraph (1) one time 
during the individual’s lifetime. 
‘‘(5) The Secretary shall ensure that the materials 
relating to coverage under this part that are provided to 
an individual described in paragraph (1) prior to the indi-
vidual’s initial enrollment period contain information con-
cerning the impact of not enrolling under this part, includ-
ing the impact on health care benefits under the 
TRICARE program under chapter 55 of title 10, United 
States Code. 
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•AMDT. NO. 2786 
‘‘(6) The Secretary of Defense shall collaborate with 
the Secretary of Health and Human Services and the 
Commissioner of Social Security to provide for the accu-
rate identification of individuals described in paragraph 
(1). The Secretary of Defense shall provide such individ-
uals with notification with respect to this subsection. The 
Secretary of Defense shall collaborate with the Secretary 
of Health and Human Services and the Commissioner of 
Social Security to ensure appropriate follow up pursuant 
to any notification provided under the preceding sen-
tence.’’. 
(2) EFFECTIVE DATE.—The amendment made 
by paragraph (1) shall apply to elections made with 
respect to initial enrollment periods that end after 
the date of the enactment of this Act. 
(b) WAIVER OF INCREASE OF PREMIUM.—Section 
1839(b) of the Social Security Act (42 U.S.C. 1395r(b)) 
is amended by striking ‘‘section 1837(i)(4)’’ and inserting 
‘‘subsection (i)(4) or (l) of section 1837’’. 
SEC. 3111. PAYMENT FOR BONE DENSITY TESTS. 
(a) PAYMENT.— 
(1) IN GENERAL.—Section 1848 of the Social 
Security Act (42 U.S.C. 1395w–4) is amended— 
(A) in subsection (b)— 
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•AMDT. NO. 2786 
(i) in paragraph (4)(B), by inserting 
‘‘, and for 2010 and 2011, dual-energy x- 
ray absorptiometry services (as described 
in paragraph (6))’’ before the period at the 
end; and 
(ii) by adding at the end the following 
new paragraph: 
‘‘(6) TREATMENT OF BONE MASS SCANS.—For 
dual-energy x-ray absorptiometry services (identified 
in 2006 by HCPCS codes 76075 and 76077 (and 
any succeeding codes)) furnished during 2010 and 
2011, instead of the payment amount that would 
otherwise be determined under this section for such 
years, the payment amount shall be equal to 70 per-
cent of the product of— 
‘‘(A) the relative value for the service (as 
determined in subsection (c)(2)) for 2006; 
‘‘(B) the conversion factor (established 
under subsection (d)) for 2006; and 
‘‘(C) the geographic adjustment factor (es-
tablished under subsection (e)(2)) for the serv-
ice for the fee schedule area for 2010 and 2011, 
respectively.’’; and 
(B) in subsection (c)(2)(B)(iv)— 
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•AMDT. NO. 2786 
(i) in subclause (II), by striking 
‘‘and’’ at the end; 
(ii) in subclause (III), by striking the 
period at the end and inserting ‘‘; and’’; 
and 
(iii) by adding at the end the fol-
lowing new subclause: 
‘‘(IV) subsection (b)(6) shall not 
be taken into account in applying 
clause (ii)(II) for 2010 or 2011.’’. 
(2) IMPLEMENTATION.—Notwithstanding any 
other provision of law, the Secretary may implement 
the amendments made by paragraph (1) by program 
instruction or otherwise. 
(b) STUDY
AND REPORT
BY
THE INSTITUTE
OF 
MEDICINE.— 
(1) IN GENERAL.—The Secretary of Health and 
Human Services is authorized to enter into an 
agreement with the Institute of Medicine of the Na-
tional Academies to conduct a study on the ramifica-
tions of Medicare payment reductions for dual-en-
ergy x-ray absorptiometry (as described in section 
1848(b)(6) of the Social Security Act, as added by 
subsection (a)(1)) during 2007, 2008, and 2009 on 
beneficiary access to bone mass density tests. 
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•AMDT. NO. 2786 
(2) REPORT.—An agreement entered into under 
paragraph (1) shall provide for the Institute of Med-
icine to submit to the Secretary and to Congress a 
report containing the results of the study conducted 
under such paragraph. 
SEC. 3112. REVISION TO THE MEDICARE IMPROVEMENT 
FUND. 
Section 1898(b)(1)(A) of the Social Security Act (42 
U.S.C. 
1395iii) 
is 
amended 
by 
striking 
‘‘$22,290,000,000’’ and inserting ‘‘$0’’. 
SEC. 3113. TREATMENT OF CERTAIN COMPLEX DIAGNOSTIC 
LABORATORY TESTS. 
(a) DEMONSTRATION PROJECT.— 
(1) IN GENERAL.—The Secretary of Health and 
Human Services (in this section referred to as the 
‘‘Secretary’’) shall conduct a demonstration project 
under part B title XVIII of the Social Security Act 
under which separate payments are made under 
such part for complex diagnostic laboratory tests 
provided to individuals under such part. Under the 
demonstration project, the Secretary shall establish 
appropriate payment rates for such tests. 
(2) COVERED COMPLEX DIAGNOSTIC LABORA-
TORY
TEST
DEFINED.—In this section, the term 
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•AMDT. NO. 2786 
‘‘complex diagnostic laboratory test’’ means a diag-
nostic laboratory test— 
(A) that is an analysis of gene protein ex-
pression, topographic genotyping, or a cancer 
chemotherapy sensitivity assay; 
(B) that is determined by the Secretary to 
be a laboratory test for which there is not an 
alternative test having equivalent performance 
characteristics; 
(C) which is billed using a Health Care 
Procedure Coding System (HCPCS) code other 
than a not otherwise classified code under such 
Coding System; 
(D) which is approved or cleared by the 
Food and Drug Administration or is covered 
under title XVIII of the Social Security Act; 
and 
(E) is described in section 1861(s)(3) of 
the 
Social 
Security 
Act 
(42 
U.S.C. 
1395x(s)(3)). 
(3) SEPARATE
PAYMENT
DEFINED.—In this 
section, the term ‘‘separate payment’’ means direct 
payment to a laboratory (including a hospital-based 
or independent laboratory) that performs a complex 
diagnostic laboratory test with respect to a specimen 
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•AMDT. NO. 2786 
collected from an individual during a period in which 
the individual is a patient of a hospital if the test 
is performed after such period of hospitalization and 
if separate payment would not otherwise be made 
under title XVIII of the Social Security Act by rea-
son of sections 1862(a)(14) and 1866(a)(1)(H)(i) of 
the such Act (42 U.S.C. 1395y(a)(14); 42 U.S.C. 
1395cc(a)(1)(H)(i)). 
(b) DURATION.—Subject to subsection (c)(2), the 
Secretary shall conduct the demonstration project under 
this section for the 2-year period beginning on July 1, 
2011. 
(c) PAYMENTS AND LIMITATION.—Payments under 
the demonstration project under this section shall— 
(1) be made from the Federal Supplemental 
Medical Insurance Trust Fund under section 1841 
of the Social Security Act (42 U.S.C. 1395t); and 
(2) may not exceed $100,000,000. 
(d) REPORT.—Not later than 2 years after the com-
pletion of the demonstration project under this section, the 
Secretary shall submit to Congress a report on the project. 
Such report shall include— 
(1) an assessment of the impact of the dem-
onstration project on access to care, quality of care, 
health outcomes, and expenditures under title XVIII 
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•AMDT. NO. 2786 
of the Social Security Act (including any savings 
under such title); and 
(2) such recommendations as the Secretary de-
termines appropriate. 
(e) IMPLEMENTATION FUNDING.—For purposes of 
administering this section (including preparing and sub-
mitting the report under subsection (d)), the Secretary 
shall provide for the transfer, from the Federal Supple-
mental Medical Insurance Trust Fund under section 1841 
of the Social Security Act (42 U.S.C. 1395t), to the Cen-
ters for Medicare & Medicaid Services Program Manage-
ment Account, of $5,000,000. Amounts transferred under 
the preceding sentence shall remain available until ex-
pended. 
SEC. 3114. IMPROVED ACCESS FOR CERTIFIED NURSE-MID-
WIFE SERVICES. 
Section 1833(a)(1)(K) of the Social Security Act (42 
U.S.C. 1395l(a)(1)(K)) is amended by inserting ‘‘(or 100 
percent for services furnished on or after January 1, 
2011)’’ after ‘‘1992, 65 percent’’. 
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•AMDT. NO. 2786 
PART II—RURAL PROTECTIONS 
SEC. 3121. EXTENSION OF OUTPATIENT HOLD HARMLESS 
PROVISION. 
(a) IN GENERAL.—Section 1833(t)(7)(D)(i) of the 
Social Security Act (42 U.S.C. 1395l(t)(7)(D)(i)) is 
amended— 
(1) in subclause (II)— 
(A) in the first sentence, by striking 
‘‘2010’’and inserting ‘‘2011’’; and 
(B) in the second sentence, by striking ‘‘or 
2009’’ and inserting ‘‘, 2009, or 2010’’; and 
(2) in subclause (III), by striking ‘‘January 1, 
2010’’ and inserting ‘‘January 1, 2011’’. 
(b) PERMITTING ALL SOLE COMMUNITY HOSPITALS 
TO
BE
ELIGIBLE
FOR
HOLD
HARMLESS.—Section 
1833(t)(7)(D)(i)(III) of the Social Security Act (42 
U.S.C. 1395l(t)(7)(D)(i)(III)) is amended by adding at 
the end the following new sentence: ‘‘In the case of covered 
OPD services furnished on or after January 1, 2010, and 
before January 1, 2011, the preceding sentence shall be 
applied without regard to the 100-bed limitation.’’. 
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•AMDT. NO. 2786 
SEC. 3122. EXTENSION OF MEDICARE REASONABLE COSTS 
PAYMENTS FOR CERTAIN CLINICAL DIAG-
NOSTIC LABORATORY TESTS FURNISHED TO 
HOSPITAL PATIENTS IN CERTAIN RURAL 
AREAS. 
Section 416(b) of the Medicare Prescription Drug, 
Improvement, and Modernization Act of 2003 (42 U.S.C. 
1395l–4), as amended by section 105 of division B of the 
Tax Relief and Health Care Act of 2006 (42 U.S.C. 1395l 
note) and section 107 of the Medicare, Medicaid, and 
SCHIP Extension Act of 2007 (42 U.S.C. 1395l note), 
is amended by inserting ‘‘or during the 1-year period be-
ginning on July 1, 2010’’ before the period at the end. 
SEC. 3123. EXTENSION OF THE RURAL COMMUNITY HOS-
PITAL DEMONSTRATION PROGRAM. 
(a) ONE-YEAR EXTENSION.—Section 410A of the 
Medicare Prescription Drug, Improvement, and Mod-
ernization Act of 2003 (Public Law 108–173; 117 Stat. 
2272) is amended by adding at the end the following new 
subsection: 
‘‘(g) ONE-YEAR EXTENSION
OF DEMONSTRATION 
PROGRAM.— 
‘‘(1) IN GENERAL.—Subject to the succeeding 
provisions of this subsection, the Secretary shall con-
duct the demonstration program under this section 
for an additional 1-year period (in this section re-
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•AMDT. NO. 2786 
ferred to as the ‘1-year extension period’) that be-
gins on the date immediately following the last day 
of the initial 5-year period under subsection (a)(5). 
‘‘(2) 
EXPANSION
OF
DEMONSTRATION 
STATES.—Notwithstanding subsection (a)(2), during 
the 1-year extension period, the Secretary shall ex-
pand the number of States with low population den-
sities determined by the Secretary under such sub-
section to 20. In determining which States to include 
in such expansion, the Secretary shall use the same 
criteria and data that the Secretary used to deter-
mine the States under such subsection for purposes 
of the initial 5-year period. 
‘‘(3) INCREASE IN MAXIMUM NUMBER OF HOS-
PITALS
PARTICIPATING
IN
THE
DEMONSTRATION 
PROGRAM.—Notwithstanding subsection (a)(4), dur-
ing the 1-year extension period, not more than 30 
rural community hospitals may participate in the 
demonstration program under this section. 
‘‘(4) NO
AFFECT
ON
HOSPITALS
IN
DEM-
ONSTRATION PROGRAM ON DATE OF ENACTMENT.— 
In the case of a rural community hospital that is 
participating in the demonstration program under 
this section as of the last day of the initial 5-year 
period, the Secretary shall provide for the continued 
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•AMDT. NO. 2786 
participation of such rural community hospital in 
the demonstration program during the 1-year exten-
sion period unless the rural community hospital 
makes an election, in such form and manner as the 
Secretary may specify, to discontinue such participa-
tion.’’. 
(b) CONFORMING AMENDMENTS.—Subsection (a)(5) 
of section 410A of the Medicare Prescription Drug, Im-
provement, and Modernization Act of 2003 (Public Law 
108–173; 117 Stat. 2272) is amended by inserting ‘‘(in 
this section referred to as the ‘initial 5-year period’) and, 
as provided in subsection (g), for the 1-year extension pe-
riod’’ after ‘‘5-year period’’. 
(c) TECHNICAL AMENDMENTS.— 
(1) Subsection (b) of section 410A of the Medi-
care Prescription Drug, Improvement, and Mod-
ernization Act of 2003 (Public Law 108–173; 117 
Stat. 2272) is amended— 
(A) in paragraph (1)(B)(ii), by striking 
‘‘2)’’ and inserting ‘‘2))’’; and 
(B) in paragraph (2), by inserting ‘‘cost’’ 
before ‘‘reporting period’’ the first place such 
term appears in each of subparagraphs (A) and 
(B). 
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•AMDT. NO. 2786 
(A) in the matter preceding clause (i), by 
striking ‘‘October 1, 2011’’ and inserting ‘‘Oc-
tober 1, 2012’’; and 
(B) in clause (iv), by striking ‘‘through fis-
cal year 2011’’ and inserting ‘‘through fiscal 
year 2012’’. 
(2) PERMITTING HOSPITALS TO DECLINE RE-
CLASSIFICATION.—Section 13501(e)(2) of the Omni-
bus Budget Reconciliation Act of 1993 (42 U.S.C. 
1395ww note) is amended by striking ‘‘through fis-
cal year 2011’’ and inserting ‘‘through fiscal year 
2012’’. 
SEC. 3125. TEMPORARY IMPROVEMENTS TO THE MEDICARE 
INPATIENT 
HOSPITAL 
PAYMENT 
ADJUST-
MENT FOR LOW-VOLUME HOSPITALS. 
Section 1886(d)(12) of the Social Security Act (42 
U.S.C. 1395ww(d)(12)) is amended— 
(1) in subparagraph (A), by inserting ‘‘or (D)’’ 
after ‘‘subparagraph (B)’’; 
(2) in subparagraph (B), in the matter pre-
ceding clause (i), by striking ‘‘The Secretary’’ and 
inserting ‘‘For discharges occurring in fiscal years 
2005 through 2010 and for discharges occurring in 
fiscal year 2013 and subsequent fiscal years, the 
Secretary’’; 
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•AMDT. NO. 2786 
(3) in subparagraph (C)(i)— 
(A) by inserting ‘‘(or, with respect to fiscal 
years 2011 and 2012, 15 road miles)’’ after 
‘‘25 road miles’’; and 
(B) by inserting ‘‘(or, with respect to fiscal 
years 2011 and 2012, 1,500 discharges of indi-
viduals entitled to, or enrolled for, benefits 
under part A)’’ after ‘‘800 discharges’’; and 
(4) by adding at the end the following new sub-
paragraph: 
‘‘(D) TEMPORARY APPLICABLE PERCENT-
AGE
INCREASE.—For discharges occurring in 
fiscal years 2011 and 2012, the Secretary shall 
determine an applicable percentage increase for 
purposes of subparagraph (A) using a contin-
uous linear sliding scale ranging from 25 per-
cent for low-volume hospitals with 200 or fewer 
discharges of individuals entitled to, or enrolled 
for, benefits under part A in the fiscal year to 
0 percent for low-volume hospitals with greater 
than 1,500 discharges of such individuals in the 
fiscal year.’’. 
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•AMDT. NO. 2786 
SEC. 3126. IMPROVEMENTS TO THE DEMONSTRATION 
PROJECT ON COMMUNITY HEALTH INTEGRA-
TION MODELS IN CERTAIN RURAL COUNTIES. 
(a) REMOVAL OF LIMITATION ON NUMBER OF ELIGI-
BLE COUNTIES SELECTED.—Subsection (d)(3) of section 
123 of the Medicare Improvements for Patients and Pro-
viders Act of 2008 (42 U.S.C. 1395i–4 note) is amended 
by striking ‘‘not more than 6’’. 
(b) REMOVAL OF REFERENCES TO RURAL HEALTH 
CLINIC SERVICES AND INCLUSION OF PHYSICIANS’ SERV-
ICES
IN SCOPE
OF DEMONSTRATION PROJECT.—Such 
section 123 is amended— 
(1) in subsection (d)(4)(B)(i)(3), by striking 
subclause (III); and 
(2) in subsection (j)— 
(A) in paragraph (8), by striking subpara-
graph (B) and inserting the following: 
‘‘(B) Physicians’ services (as defined in 
section 1861(q) of the Social Security Act (42 
U.S.C. 1395x(q)).’’; 
(B) by striking paragraph (9); and 
(C) by redesignating paragraph (10) as 
paragraph (9). 
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•AMDT. NO. 2786 
SEC. 3127. MEDPAC STUDY ON ADEQUACY OF MEDICARE 
PAYMENTS FOR HEALTH CARE PROVIDERS 
SERVING IN RURAL AREAS. 
(a) STUDY.—The Medicare Payment Advisory Com-
mission shall conduct a study on the adequacy of pay-
ments for items and services furnished by providers of 
services and suppliers in rural areas under the Medicare 
program under title XVIII of the Social Security Act (42 
U.S.C. 1395 et seq.). Such study shall include an analysis 
of— 
(1) any adjustments in payments to providers 
of services and suppliers that furnish items and 
services in rural areas; 
(2) access by Medicare beneficiaries to items 
and services in rural areas; 
(3) the adequacy of payments to providers of 
services and suppliers that furnish items and serv-
ices in rural areas; and 
(4) the quality of care furnished in rural areas. 
(b) REPORT.—Not later than January 1, 2011, the 
Medicare Payment Advisory Commission shall submit to 
Congress a report containing the results of the study con-
ducted under subsection (a). Such report shall include rec-
ommendations on appropriate modifications to any adjust-
ments in payments to providers of services and suppliers 
that furnish items and services in rural areas, together 
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•AMDT. NO. 2786 
with recommendations for such legislation and administra-
tive action as the Medicare Payment Advisory Commission 
determines appropriate. 
SEC. 3128. TECHNICAL CORRECTION RELATED TO CRIT-
ICAL ACCESS HOSPITAL SERVICES. 
(a) IN GENERAL.—Subsections (g)(2)(A) and (l)(8) 
of section 1834 of the Social Security Act (42 U.S.C. 
1395m) are each amended by inserting ‘‘101 percent of’’ 
before ‘‘the reasonable costs’’. 
(b) EFFECTIVE DATE.—The amendments made by 
subsection (a) shall take effect as if included in the enact-
ment of section 405(a) of the Medicare Prescription Drug, 
Improvement, and Modernization Act of 2003 (Public Law 
108–173; 117 Stat. 2266). 
SEC. 3129. EXTENSION OF AND REVISIONS TO MEDICARE 
RURAL HOSPITAL FLEXIBILITY PROGRAM. 
(a) AUTHORIZATION.—Section 1820(j) of the Social 
Security Act (42 U.S.C. 1395i–4(j)) is amended— 
(1) by striking ‘‘2010, and for’’ and inserting 
‘‘2010, for’’; and 
(2) by inserting ‘‘and for making grants to all 
States under subsection (g), such sums as may be 
necessary in each of fiscal years 2011 and 2012, to 
remain available until expended’’ before the period 
at the end. 
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•AMDT. NO. 2786 
(b) USE OF FUNDS.—Section 1820(g)(3) of the So-
cial Security Act (42 U.S.C. 1395i–4(g)(3)) is amended— 
(1) in subparagraph (A), by inserting ‘‘and to 
assist such hospitals in participating in delivery sys-
tem reforms under the provisions of and amend-
ments made by the Patient Protection and Afford-
able Care Act, such as value-based purchasing pro-
grams, accountable care organizations under section 
1899, the National pilot program on payment bun-
dling under section 1866D, and other delivery sys-
tem reform programs determined appropriate by the 
Secretary’’ before the period at the end; and 
(2) in subparagraph (E)— 
(A) by striking ‘‘, and to offset’’ and in-
serting ‘‘, to offset’’; and 
(B) by inserting ‘‘and to participate in de-
livery system reforms under the provisions of 
and amendments made by the Patient Protec-
tion and Affordable Care Act, such as value- 
based purchasing programs, accountable care 
organizations under section 1899, the National 
pilot program on payment bundling under sec-
tion 1866D, and other delivery system reform 
programs determined appropriate by the Sec-
retary’’ before the period at the end. 
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•AMDT. NO. 2786 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to grants made on or after January 
1, 2010. 
PART III—IMPROVING PAYMENT ACCURACY 
SEC. 3131. PAYMENT ADJUSTMENTS FOR HOME HEALTH 
CARE. 
(a) REBASING HOME HEALTH PROSPECTIVE PAY-
MENT AMOUNT.— 
(1) IN GENERAL.—Section 1895(b)(3)(A) of the 
Social Security Act (42 U.S.C. 1395fff(b)(3)(A)) is 
amended— 
(A) in clause (i)(III), by striking ‘‘For pe-
riods’’ and inserting ‘‘Subject to clause (iii), for 
periods’’; and 
(B) by adding at the end the following new 
clause: 
‘‘(iii) ADJUSTMENT
FOR
2013
AND 
SUBSEQUENT YEARS.— 
‘‘(I) IN
GENERAL.—Subject to 
subclause (II), for 2013 and subse-
quent years, the amount (or amounts) 
that would otherwise be applicable 
under clause (i)(III) shall be adjusted 
by a percentage determined appro-
priate by the Secretary to reflect such 
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•AMDT. NO. 2786 
factors as changes in the number of 
visits in an episode, the mix of serv-
ices in an episode, the level of inten-
sity of services in an episode, the av-
erage cost of providing care per epi-
sode, and other factors that the Sec-
retary considers to be relevant. In 
conducting the analysis under the pre-
ceding sentence, the Secretary may 
consider differences between hospital- 
based and freestanding agencies, be-
tween for-profit and nonprofit agen-
cies, and between the resource costs of 
urban and rural agencies. Such ad-
justment shall be made before the up-
date under subparagraph (B) is ap-
plied for the year. 
‘‘(II) 
TRANSITION.—The 
Sec-
retary shall provide for a 4-year 
phase-in (in equal increments) of the 
adjustment under subclause (I), with 
such adjustment being fully imple-
mented for 2016. During each year of 
such phase-in, the amount of any ad-
justment under subclause (I) for the 
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•AMDT. NO. 2786 
year may not exceed 3.5 percent of 
the amount (or amounts) applicable 
under clause (i)(III) as of the date of 
enactment of the Patient Protection 
and Affordable Care Act.’’. 
(2) MEDPAC STUDY AND REPORT.— 
(A) STUDY.—The Medicare Payment Advi-
sory Commission shall conduct a study on the 
implementation of the amendments made by 
paragraph (1). Such study shall include an 
analysis of the impact of such amendments 
on— 
(i) access to care; 
(ii) quality outcomes; 
(iii) the number of home health agen-
cies; and 
(iv) rural agencies, urban agencies, 
for-profit agencies, and nonprofit agencies. 
(B) REPORT.—Not later than January 1, 
2015, the Medicare Payment Advisory Commis-
sion shall submit to Congress a report on the 
study conducted under subparagraph (A), to-
gether with recommendations for such legisla-
tion and administrative action as the Commis-
sion determines appropriate. 
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•AMDT. NO. 2786 
(b) PROGRAM-SPECIFIC
OUTLIER
CAP.—Section 
1895(b) of the Social Security Act (42 U.S.C. 1395fff(b)) 
is amended— 
(1) in paragraph (3)(C), by striking ‘‘the aggre-
gate’’ and all that follows through the period at the 
end and inserting ‘‘5 percent of the total payments 
estimated to be made based on the prospective pay-
ment system under this subsection for the period.’’; 
and 
(2) in paragraph (5)— 
(A) by striking ‘‘OUTLIERS.—The Sec-
retary’’ 
and 
inserting 
the 
following: 
‘‘OUTLIERS.— 
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), the Secretary’’; 
(B) in subparagraph (A), as added by sub-
paragraph (A), by striking ‘‘5 percent’’ and in-
serting ‘‘2.5 percent’’; and 
(C) by adding at the end the following new 
subparagraph: 
‘‘(B) PROGRAM SPECIFIC OUTLIER CAP.— 
The estimated total amount of additional pay-
ments or payment adjustments made under 
subparagraph (A) with respect to a home health 
agency for a year (beginning with 2011) may 
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•AMDT. NO. 2786 
not exceed an amount equal to 10 percent of 
the estimated total amount of payments made 
under this section (without regard to this para-
graph) with respect to the home health agency 
for the year.’’. 
(c) APPLICATION OF THE MEDICARE RURAL HOME 
HEALTH ADD-ON POLICY.—Section 421 of the Medicare 
Prescription Drug, Improvement, and Modernization Act 
of 2003 (Public Law 108–173; 117 Stat. 2283), as 
amended by section 5201(b) of the Deficit Reduction Act 
of 2005 (Public Law 109–171; 120 Stat. 46), is amend-
ed— 
(1) in the section heading, by striking ‘‘ONE- 
YEAR’’ and inserting ‘‘TEMPORARY’’; and 
(2) in subsection (a)— 
(A) by striking ‘‘, and episodes’’ and in-
serting ‘‘, episodes’’; 
(B) by inserting ‘‘and episodes and visits 
ending on or after April 1, 2010, and before 
January 1, 2016,’’ after ‘‘January 1, 2007,’’; 
and 
(C) by inserting ‘‘(or, in the case of epi-
sodes and visits ending on or after April 1, 
2010, and before January 1, 2016, 3 percent)’’ 
before the period at the end. 
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•AMDT. NO. 2786 
(d) STUDY AND REPORT ON THE DEVELOPMENT OF 
HOME HEALTH PAYMENT REFORMS IN ORDER TO EN-
SURE ACCESS TO CARE AND QUALITY SERVICES.— 
(1) IN GENERAL.—The Secretary of Health and 
Human Services (in this section referred to as the 
‘‘Secretary’’) shall conduct a study to evaluate the 
costs and quality of care among efficient home 
health agencies relative to other such agencies in 
providing ongoing access to care and in treating 
Medicare beneficiaries with varying severity levels of 
illness. Such study shall include an analysis of the 
following: 
(A) Methods to revise the home health pro-
spective payment system under section 1895 of 
the Social Security Act (42 U.S.C. 1395fff) to 
more accurately account for the costs related to 
patient severity of illness or to improving bene-
ficiary access to care, including— 
(i) payment adjustments for services 
that may be under- or over-valued; 
(ii) necessary changes to reflect the 
resource use relative to providing home 
health services to low-income Medicare 
beneficiaries or Medicare beneficiaries liv-
ing in medically underserved areas; 
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•AMDT. NO. 2786 
(iii) ways the outlier payment may be 
improved to more accurately reflect the 
cost of treating Medicare beneficiaries with 
high severity levels of illness; 
(iv) the role of quality of care incen-
tives and penalties in driving provider and 
patient behavior; 
(v) improvements in the application of 
a wage index; and 
(vi) other areas determined appro-
priate by the Secretary. 
(B) The validity and reliability of re-
sponses on the OASIS instrument with par-
ticular emphasis on questions that relate to 
higher payment under the home health prospec-
tive payment system and higher outcome scores 
under Home Care Compare. 
(C) Additional research or payment revi-
sions under the home health prospective pay-
ment system that may be necessary to set the 
payment rates for home health services based 
on costs of high-quality and efficient home 
health agencies or to improve Medicare bene-
ficiary access to care. 
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•AMDT. NO. 2786 
(D) A timetable for implementation of any 
appropriate changes based on the analysis of 
the matters described in subparagraphs (A), 
(B), and (C). 
(E) Other areas determined appropriate by 
the Secretary. 
(2) CONSIDERATIONS.—In conducting the study 
under paragraph (1), the Secretary shall consider 
whether certain factors should be used to measure 
patient severity of illness and access to care, such 
as— 
(A) population density and relative patient 
access to care; 
(B) variations in service costs for providing 
care to individuals who are dually eligible under 
the Medicare and Medicaid programs; 
(C) the presence of severe or chronic dis-
eases, as evidenced by multiple, discontinuous 
home health episodes; 
(D) poverty status, as evidenced by the re-
ceipt of Supplemental Security Income under 
title XVI of the Social Security Act; 
(E) the absence of caregivers; 
(F) language barriers; 
(G) atypical transportation costs; 
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•AMDT. NO. 2786 
(H) security costs; and 
(I) other factors determined appropriate by 
the Secretary. 
(3) REPORT.—Not later than March 1, 2011, 
the Secretary shall submit to Congress a report on 
the study conducted under paragraph (1), together 
with recommendations for such legislation and ad-
ministrative action as the Secretary determines ap-
propriate. 
(4) CONSULTATIONS.—In conducting the study 
under paragraph (1) and preparing the report under 
paragraph (3), the Secretary shall consult with— 
(A) stakeholders representing home health 
agencies; 
(B) groups representing Medicare bene-
ficiaries; 
(C) the Medicare Payment Advisory Com-
mission; 
(D) the Inspector General of the Depart-
ment of Health and Human Services; and 
(E) the Comptroller General of the United 
States. 
SEC. 3132. HOSPICE REFORM. 
(a) HOSPICE CARE PAYMENT REFORMS.— 
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•AMDT. NO. 2786 
(1) IN GENERAL.—Section 1814(i) of the Social 
Security Act (42 U.S.C. 1395f(i)), as amended by 
section 3004(c), is amended— 
(A) by redesignating paragraph (6) as 
paragraph (7); and 
(B) by inserting after paragraph (5) the 
following new paragraph: 
‘‘(6)(A) The Secretary shall collect additional 
data and information as the Secretary determines 
appropriate to revise payments for hospice care 
under this subsection pursuant to subparagraph (D) 
and for other purposes as determined appropriate by 
the Secretary. The Secretary shall begin to collect 
such data by not later than January 1, 2011. 
‘‘(B) The additional data and information to be 
collected under subparagraph (A) may include data 
and information on— 
‘‘(i) charges and payments; 
‘‘(ii) the number of days of hospice care 
which are attributable to individuals who are 
entitled to, or enrolled for, benefits under part 
A; and 
‘‘(iii) with respect to each type of service 
included in hospice care— 
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•AMDT. NO. 2786 
‘‘(I) the number of days of hospice 
care attributable to the type of service; 
‘‘(II) the cost of the type of service; 
and 
‘‘(III) the amount of payment for the 
type of service; 
‘‘(iv) charitable contributions and other 
revenue of the hospice program; 
‘‘(v) the number of hospice visits; 
‘‘(vi) the type of practitioner providing the 
visit; and 
‘‘(vii) the length of the visit and other 
basic information with respect to the visit. 
‘‘(C) The Secretary may collect the additional 
data and information under subparagraph (A) on 
cost reports, claims, or other mechanisms as the 
Secretary determines to be appropriate. 
‘‘(D)(i) Notwithstanding the preceding para-
graphs of this subsection, not earlier than October 
1, 2013, the Secretary shall, by regulation, imple-
ment revisions to the methodology for determining 
the payment rates for routine home care and other 
services included in hospice care under this part, as 
the Secretary determines to be appropriate. Such re-
visions may be based on an analysis of data and in-
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•AMDT. NO. 2786 
formation collected under subparagraph (A). Such 
revisions may include adjustments to per diem pay-
ments that reflect changes in resource intensity in 
providing such care and services during the course 
of the entire episode of hospice care. 
‘‘(ii) Revisions in payment implemented pursu-
ant to clause (i) shall result in the same estimated 
amount of aggregate expenditures under this title 
for hospice care furnished in the fiscal year in which 
such revisions in payment are implemented as would 
have been made under this title for such care in 
such fiscal year if such revisions had not been imple-
mented. 
‘‘(E) The Secretary shall consult with hospice 
programs and the Medicare Payment Advisory Com-
mission regarding the additional data and informa-
tion to be collected under subparagraph (A) and the 
payment revisions under subparagraph (D).’’. 
(2) 
CONFORMING
AMENDMENTS.—Section 
1814(i)(1)(C) of the Social Security Act (42 U.S.C. 
1395f(i)(1)(C)) is amended— 
(A) in clause (ii)— 
(i) in the matter preceding subclause 
(I), by inserting ‘‘(before the first fiscal 
year in which the payment revisions de-
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•AMDT. NO. 2786 
scribed in paragraph (6)(D) are imple-
mented)’’ after ‘‘subsequent fiscal year’’; 
and 
(ii) in subclause (VII), by inserting 
‘‘(before the first fiscal year in which the 
payment revisions described in paragraph 
(6)(D) are implemented), subject to clause 
(iv),’’ after ‘‘subsequent fiscal year’’; and 
(B) by adding at the end the following new 
clause: 
‘‘(iii) With respect to routine home 
care and other services included in hospice 
care furnished during fiscal years subse-
quent to the first fiscal year in which pay-
ment revisions described in paragraph 
(6)(D) are implemented, the payment rates 
for such care and services shall be the pay-
ment rates in effect under this clause dur-
ing the preceding fiscal year increased by, 
subject to clause (iv), the market basket 
percentage increase (as defined in section 
1886(b)(3)(B)(iii)) for the fiscal year.’’. 
(b) ADOPTION OF MEDPAC HOSPICE PROGRAM ELI-
GIBILITY RECERTIFICATION RECOMMENDATIONS.—Sec-
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•AMDT. NO. 2786 
tion 1814(a)(7) of the Social Security Act (42 U.S.C. 
1395f(a)(7)) is amended— 
(1) in subparagraph (B), by striking ‘‘and’’ at 
the end; and 
(2) by adding at the end the following new sub-
paragraph: 
‘‘(D) on and after January 1, 2011— 
‘‘(i) a hospice physician or nurse prac-
titioner has a face-to-face encounter with 
the individual to determine continued eligi-
bility of the individual for hospice care 
prior to the 180th-day recertification and 
each subsequent recertification under sub-
paragraph (A)(ii) and attests that such 
visit took place (in accordance with proce-
dures established by the Secretary); and 
‘‘(ii) in the case of hospice care pro-
vided an individual for more than 180 days 
by a hospice program for which the num-
ber of such cases for such program com-
prises more than a percent (specified by 
the Secretary) of the total number of such 
cases for all programs under this title, the 
hospice care provided to such individual is 
medically reviewed (in accordance with 
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•AMDT. NO. 2786 
procedures established by the Secretary); 
and’’. 
SEC. 3133. IMPROVEMENT TO MEDICARE DISPROPOR-
TIONATE SHARE HOSPITAL (DSH) PAYMENTS. 
Section 1886 of the Social Security Act (42 U.S.C. 
1395ww), as amended by sections 3001, 3008, and 3025, 
is amended— 
(1) in subsection (d)(5)(F)(i), by striking 
‘‘For’’ and inserting ‘‘Subject to subsection (r), for’’; 
and 
(2) by adding at the end the following new sub-
section: 
‘‘(r) ADJUSTMENTS
TO
MEDICARE
DSH PAY-
MENTS.— 
‘‘(1) 
EMPIRICALLY
JUSTIFIED
DSH
PAY-
MENTS.—For fiscal year 2015 and each subsequent 
fiscal year, instead of the amount of dispropor-
tionate share hospital payment that would otherwise 
be made under subsection (d)(5)(F) to a subsection 
(d) hospital for the fiscal year, the Secretary shall 
pay to the subsection (d) hospital 25 percent of such 
amount (which represents the empirically justified 
amount for such payment, as determined by the 
Medicare Payment Advisory Commission in its 
March 2007 Report to the Congress). 
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•AMDT. NO. 2786 
‘‘(2) ADDITIONAL
PAYMENT.—In addition to 
the payment made to a subsection (d) hospital under 
paragraph (1), for fiscal year 2015 and each subse-
quent fiscal year, the Secretary shall pay to such 
subsection (d) hospitals an additional amount equal 
to the product of the following factors: 
‘‘(A) FACTOR ONE.—A factor equal to the 
difference between— 
‘‘(i) the aggregate amount of pay-
ments that would be made to subsection 
(d) hospitals under subsection (d)(5)(F) if 
this subsection did not apply for such fis-
cal year (as estimated by the Secretary); 
and 
‘‘(ii) the aggregate amount of pay-
ments that are made to subsection (d) hos-
pitals under paragraph (1) for such fiscal 
year (as so estimated). 
‘‘(B) FACTOR TWO.— 
‘‘(i) FISCAL
YEARS
2015, 2016, AND 
2017.—For each of fiscal years 2015, 2016, 
and 2017, a factor equal to 1 minus the 
percent change (divided by 100) in the per-
cent of individuals under the age of 65 who 
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•AMDT. NO. 2786 
are uninsured, as determined by comparing 
the percent of such individuals— 
‘‘(I) who are uninsured in 2012, 
the last year before coverage expan-
sion under the Patient Protection and 
Affordable Care Act (as calculated by 
the Secretary based on the most re-
cent estimates available from the Di-
rector of the Congressional Budget 
Office before a vote in either House 
on such Act that, if determined in the 
affirmative, would clear such Act for 
enrollment); and 
‘‘(II) who are uninsured in the 
most recent period for which data is 
available (as so calculated). 
‘‘(ii) 
2018 
AND
SUBSEQUENT 
YEARS.—For fiscal year 2018 and each 
subsequent fiscal year, a factor equal to 1 
minus the percent change (divided by 100) 
in the percent of individuals who are unin-
sured, as determined by comparing the 
percent of individuals— 
‘‘(I) who are uninsured in 2012 
(as estimated by the Secretary, based 
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•AMDT. NO. 2786 
on data from the Census Bureau or 
other sources the Secretary deter-
mines appropriate, and certified by 
the Chief Actuary of the Centers for 
Medicare & Medicaid Services); and 
‘‘(II) who are uninsured in the 
most recent period for which data is 
available (as so estimated and cer-
tified). 
‘‘(C) FACTOR THREE.—A factor equal to 
the percent, for each subsection (d) hospital, 
that represents the quotient of— 
‘‘(i) the amount of uncompensated 
care for such hospital for a period selected 
by the Secretary (as estimated by the Sec-
retary, based on appropriate data (includ-
ing, in the case where the Secretary deter-
mines that alternative data is available 
which is a better proxy for the costs of 
subsection (d) hospitals for treating the 
uninsured, the use of such alternative 
data)); and 
‘‘(ii) the aggregate amount of uncom-
pensated care for all subsection (d) hos-
pitals that receive a payment under this 
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•AMDT. NO. 2786 
subsection for such period (as so esti-
mated, based on such data). 
‘‘(3) LIMITATIONS ON REVIEW.—There shall be 
no administrative or judicial review under section 
1869, section 1878, or otherwise of the following: 
‘‘(A) Any estimate of the Secretary for 
purposes of determining the factors described in 
paragraph (2). 
‘‘(B) Any period selected by the Secretary 
for such purposes.’’. 
SEC. 3134. MISVALUED CODES UNDER THE PHYSICIAN FEE 
SCHEDULE. 
(a) IN GENERAL.—Section 1848(c)(2) of the Social 
Security Act (42 U.S.C. 1395w–4(c)(2)) is amended by 
adding at the end the following new subparagraphs: 
‘‘(K) POTENTIALLY MISVALUED CODES.— 
‘‘(i) IN
GENERAL.—The Secretary 
shall— 
‘‘(I) periodically identify services 
as being potentially misvalued using 
criteria specified in clause (ii); and 
‘‘(II) review and make appro-
priate adjustments to the relative val-
ues established under this paragraph 
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•AMDT. NO. 2786 
for services identified as being poten-
tially misvalued under subclause (I). 
‘‘(ii) 
IDENTIFICATION
OF
POTEN-
TIALLY MISVALUED CODES.—For purposes 
of identifying potentially misvalued services 
pursuant to clause (i)(I), the Secretary 
shall examine (as the Secretary determines 
to be appropriate) codes (and families of 
codes as appropriate) for which there has 
been the fastest growth; codes (and fami-
lies of codes as appropriate) that have ex-
perienced substantial changes in practice 
expenses; codes for new technologies or 
services within an appropriate period (such 
as 3 years) after the relative values are ini-
tially established for such codes; multiple 
codes that are frequently billed in conjunc-
tion with furnishing a single service; codes 
with low relative values, particularly those 
that are often billed multiple times for a 
single treatment; codes which have not 
been subject to review since the implemen-
tation of the RBRVS (the so-called ‘Har-
vard-valued codes’); and such other codes 
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•AMDT. NO. 2786 
determined to be appropriate by the Sec-
retary. 
‘‘(iii) REVIEW AND ADJUSTMENTS.— 
‘‘(I) The Secretary may use ex-
isting 
processes 
to 
receive 
rec-
ommendations on the review and ap-
propriate adjustment of potentially 
misvalued services described in clause 
(i)(II). 
‘‘(II) The Secretary may conduct 
surveys, other data collection activi-
ties, studies, or other analyses as the 
Secretary determines to be appro-
priate to facilitate the review and ap-
propriate adjustment described in 
clause (i)(II). 
‘‘(III) The Secretary may use 
analytic contractors to identify and 
analyze 
services 
identified 
under 
clause (i)(I), conduct surveys or col-
lect data, and make recommendations 
on the review and appropriate adjust-
ment of services described in clause 
(i)(II). 
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•AMDT. NO. 2786 
‘‘(IV) The Secretary may coordi-
nate the review and appropriate ad-
justment described in clause (i)(II) 
with the periodic review described in 
subparagraph (B). 
‘‘(V) As part of the review and 
adjustment described in clause (i)(II), 
including with respect to codes with 
low relative values described in clause 
(ii), the Secretary may make appro-
priate 
coding 
revisions 
(including 
using existing processes for consider-
ation of coding changes) which may 
include consolidation of individual 
services into bundled codes for pay-
ment under the fee schedule under 
subsection (b). 
‘‘(VI) The provisions of subpara-
graph (B)(ii)(II) shall apply to adjust-
ments to relative value units made 
pursuant to this subparagraph in the 
same manner as such provisions apply 
to adjustments under subparagraph 
(B)(ii)(II). 
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•AMDT. NO. 2786 
‘‘(L) 
VALIDATING
RELATIVE
VALUE 
UNITS.— 
‘‘(i) IN
GENERAL.—The Secretary 
shall establish a process to validate relative 
value units under the fee schedule under 
subsection (b). 
‘‘(ii) COMPONENTS
AND
ELEMENTS 
OF
WORK.—The process described in 
clause (i) may include validation of work 
elements (such as time, mental effort and 
professional judgment, technical skill and 
physical effort, and stress due to risk) in-
volved with furnishing a service and may 
include validation of the pre-, post-, and 
intra-service components of work. 
‘‘(iii) SCOPE OF CODES.—The valida-
tion of work relative value units shall in-
clude a sampling of codes for services that 
is the same as the codes listed under sub-
paragraph (K)(ii). 
‘‘(iv) METHODS.—The Secretary may 
conduct the validation under this subpara-
graph using methods described in sub-
clauses (I) through (V) of subparagraph 
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851 
•AMDT. NO. 2786 
(K)(iii) as the Secretary determines to be 
appropriate. 
‘‘(v) ADJUSTMENTS.—The Secretary 
shall make appropriate adjustments to the 
work relative value units under the fee 
schedule under subsection (b). The provi-
sions of subparagraph (B)(ii)(II) shall 
apply to adjustments to relative value units 
made pursuant to this subparagraph in the 
same manner as such provisions apply to 
adjustments 
under 
subparagraph 
(B)(ii)(II).’’. 
(b) IMPLEMENTATION.— 
(1) ADMINISTRATION.— 
(A) Chapter 35 of title 44, United States 
Code and the provisions of the Federal Advisory 
Committee Act (5 U.S.C. App.) shall not apply 
to this section or the amendment made by this 
section. 
(B) Notwithstanding any other provision of 
law, the Secretary may implement subpara-
graphs (K) and (L) of 1848(c)(2) of the Social 
Security Act, as added by subsection (a), by 
program instruction or otherwise. 
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852 
•AMDT. NO. 2786 
(C) Section 4505(d) of the Balanced 
Budget Act of 1997 is repealed. 
(D) Except for provisions related to con-
fidentiality of information, the provisions of the 
Federal Acquisition Regulation shall not apply 
to this section or the amendment made by this 
section. 
(2) FOCUSING
CMS
RESOURCES
ON
POTEN-
TIALLY
OVERVALUED
CODES.—Section 1868(a) of 
the Social Security Act (42 U.S.C. 1395ee(a)) is re-
pealed. 
SEC. 3135. MODIFICATION OF EQUIPMENT UTILIZATION 
FACTOR FOR ADVANCED IMAGING SERVICES. 
(a) ADJUSTMENT IN PRACTICE EXPENSE TO RE-
FLECT HIGHER PRESUMED UTILIZATION.—Section 1848 
of the Social Security Act (42 U.S.C. 1395w–4) is amend-
ed— 
(1) in subsection (b)(4)— 
(A) in subparagraph (B), by striking ‘‘sub-
paragraph (A)’’ and inserting ‘‘this paragraph’’; 
and 
(B) by adding at the end the following new 
subparagraph: 
‘‘(C) ADJUSTMENT IN PRACTICE EXPENSE 
TO
REFLECT
HIGHER
PRESUMED
UTILIZA-
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•AMDT. NO. 2786 
TION.—Consistent with the methodology for 
computing the number of practice expense rel-
ative value units under subsection (c)(2)(C)(ii) 
with respect to advanced diagnostic imaging 
services (as defined in section 1834(e)(1)(B)) 
furnished on or after January 1, 2010, the Sec-
retary shall adjust such number of units so it 
reflects— 
‘‘(i) in the case of services furnished 
on or after January 1, 2010, and before 
January 1, 2013, a 65 percent (rather 
than 50 percent) presumed rate of utiliza-
tion of imaging equipment; 
‘‘(ii) in the case of services furnished 
on or after January 1, 2013, and before 
January 1, 2014, a 70 percent (rather 
than 50 percent) presumed rate of utiliza-
tion of imaging equipment; and 
‘‘(iii) in the case of services furnished 
on or after January 1, 2014, a 75 percent 
(rather than 50 percent) presumed rate of 
utilization of imaging equipment.’’; and 
(2) in subsection (c)(2)(B)(v), by adding at the 
end the following new subclauses: 
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855 
•AMDT. NO. 2786 
VANCED DIAGNOSTIC IMAGING SERV-
ICES
FOR
2014
AND
SUBSEQUENT 
YEARS.—Effective for fee schedules 
established beginning with 2014, re-
duced expenditures attributable to the 
presumed rate of utilization of imag-
ing equipment of 75 percent under 
subsection (b)(4)(C)(iii) instead of a 
presumed rate of utilization of such 
equipment of 50 percent.’’. 
(b) ADJUSTMENT IN TECHNICAL COMPONENT ‘‘DIS-
COUNT’’ ON SINGLE-SESSION IMAGING TO CONSECUTIVE 
BODY PARTS.—Section 1848 of the Social Security Act 
(42 U.S.C. 1395w–4), as amended by subsection (a), is 
amended— 
(1) in subsection (b)(4), by adding at the end 
the following new subparagraph: 
‘‘(D) ADJUSTMENT IN TECHNICAL COMPO-
NENT DISCOUNT ON SINGLE-SESSION IMAGING 
INVOLVING
CONSECUTIVE
BODY
PARTS.—For 
services furnished on or after July 1, 2010, the 
Secretary shall increase the reduction in pay-
ments attributable to the multiple procedure 
payment reduction applicable to the technical 
component for imaging under the final rule 
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•AMDT. NO. 2786 
published by the Secretary in the Federal Reg-
ister on November 21, 2005 (part 405 of title 
42, Code of Federal Regulations) from 25 per-
cent to 50 percent.’’; and 
(2) in subsection (c)(2)(B)(v), by adding at the 
end the following new subclause: 
‘‘(VI) 
ADDITIONAL
REDUCED 
PAYMENT
FOR
MULTIPLE
IMAGING 
PROCEDURES.—Effective 
for 
fee 
schedules established beginning with 
2010 (but not applied for services fur-
nished prior to July 1, 2010), reduced 
expenditures attributable to the in-
crease in the multiple procedure pay-
ment reduction from 25 to 50 percent 
(as 
described 
in 
subsection 
(b)(4)(D)).’’. 
(c) ANALYSIS BY THE CHIEF ACTUARY OF THE CEN-
TERS FOR MEDICARE & MEDICAID SERVICES.—Not later 
than January 1, 2013, the Chief Actuary of the Centers 
for Medicare & Medicaid Services shall make publicly 
available an analysis of whether, for the period of 2010 
through 2019, the cumulative expenditure reductions 
under title XVIII of the Social Security Act that are at-
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•AMDT. NO. 2786 
tributable to the adjustments under the amendments made 
by this section are projected to exceed $3,000,000,000. 
SEC. 3136. REVISION OF PAYMENT FOR POWER-DRIVEN 
WHEELCHAIRS. 
(a) IN GENERAL.—Section 1834(a)(7)(A) of the So-
cial Security Act (42 U.S.C. 1395m(a)(7)(A)) is amend-
ed— 
(1) in clause (i)— 
(A) in subclause (II), by inserting ‘‘sub-
clause (III) and’’ after ‘‘Subject to’’; and 
(B) by adding at the end the following new 
subclause: 
‘‘(III) 
SPECIAL
RULE
FOR 
POWER-DRIVEN
WHEELCHAIRS.—For 
purposes of payment for power-driven 
wheelchairs, subclause (II) shall be 
applied by substituting ‘15 percent’ 
and ‘6 percent’ for ‘10 percent’ and 
‘7.5 percent’, respectively.’’; and 
(2) in clause (iii)— 
(A) in the heading, by inserting ‘‘COM-
PLEX, REHABILITATIVE’’ before ‘‘POWER-DRIV-
EN’’; and 
(B) by inserting ‘‘complex, rehabilitative’’ 
before ‘‘power-driven’’. 
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•AMDT. NO. 2786 
(b) 
TECHNICAL
AMENDMENT.—Section 
1834(a)(7)(C)(ii)(II) of the Social Security Act (42 U.S.C. 
1395m(a)(7)(C)(ii)(II)) is amended by striking ‘‘(A)(ii) 
or’’. 
(c) EFFECTIVE DATE.— 
(1) IN GENERAL.—Subject to paragraph (2), 
the amendments made by subsection (a) shall take 
effect on January 1, 2011, and shall apply to power- 
driven wheelchairs furnished on or after such date. 
(2) APPLICATION TO COMPETITIVE BIDDING.— 
The amendments made by subsection (a) shall not 
apply to payment made for items and services fur-
nished pursuant to contracts entered into under sec-
tion 1847 of the Social Security Act (42 U.S.C. 
1395w–3) prior to January 1, 2011, pursuant to the 
implementation of subsection (a)(1)(B)(i)(I) of such 
section 1847. 
SEC. 3137. HOSPITAL WAGE INDEX IMPROVEMENT. 
(a) EXTENSION OF SECTION 508 HOSPITAL RECLAS-
SIFICATIONS.— 
(1) IN
GENERAL.—Subsection (a) of section 
106 of division B of the Tax Relief and Health Care 
Act of 2006 (42 U.S.C. 1395 note), as amended by 
section 117 of the Medicare, Medicaid, and SCHIP 
Extension Act of 2007 (Public Law 110–173) and 
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859 
•AMDT. NO. 2786 
section 124 of the Medicare Improvements for Pa-
tients and Providers Act of 2008 (Public Law 110– 
275), is amended by striking ‘‘September 30, 2009’’ 
and inserting ‘‘September 30, 2010’’. 
(2) USE OF PARTICULAR WAGE INDEX IN FIS-
CAL YEAR 2010.—For purposes of implementation of 
the amendment made by this subsection during fis-
cal year 2010, the Secretary shall use the hospital 
wage index that was promulgated by the Secretary 
in the Federal Register on August 27, 2009 (74 
Fed. Reg. 43754), and any subsequent corrections. 
(b) PLAN FOR REFORMING THE MEDICARE HOS-
PITAL WAGE INDEX SYSTEM.— 
(1) IN GENERAL.—Not later than December 31, 
2011, the Secretary of Health and Human Services 
(in this section referred to as the ‘‘Secretary’’) shall 
submit to Congress a report that includes a plan to 
reform the hospital wage index system under section 
1886 of the Social Security Act. 
(2) DETAILS.—In developing the plan under 
paragraph (1), the Secretary shall take into account 
the goals for reforming such system set forth in the 
Medicare Payment Advisory Commission June 2007 
report entitled ‘‘Report to Congress: Promoting 
Greater Efficiency in Medicare’’, including estab-
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860 
•AMDT. NO. 2786 
lishing a new hospital compensation index system 
that— 
(A) uses Bureau of Labor Statistics data, 
or other data or methodologies, to calculate rel-
ative wages for each geographic area involved; 
(B) minimizes wage index adjustments be-
tween and within metropolitan statistical areas 
and statewide rural areas; 
(C) includes methods to minimize the vola-
tility of wage index adjustments that result 
from implementation of policy, while maintain-
ing budget neutrality in applying such adjust-
ments; 
(D) takes into account the effect that im-
plementation of the system would have on 
health care providers and on each region of the 
country; 
(E) addresses issues related to occupa-
tional mix, such as staffing practices and ratios, 
and any evidence on the effect on quality of 
care or patient safety as a result of the imple-
mentation of the system; and 
(F) provides for a transition. 
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•AMDT. NO. 2786 
(3) CONSULTATION.—In developing the plan 
under paragraph (1), the Secretary shall consult 
with relevant affected parties. 
(c) USE
OF PARTICULAR CRITERIA
FOR DETER-
MINING RECLASSIFICATIONS.—Notwithstanding any other 
provision of law, in making decisions on applications for 
reclassification of a subsection (d) hospital (as defined in 
paragraph (1)(B) of section 1886(d) of the Social Security 
Act (42 U.S.C. 1395ww(d)) for the purposes described in 
paragraph (10)(D)(v) of such section for fiscal year 2011 
and each subsequent fiscal year (until the first fiscal year 
beginning on or after the date that is 1 year after the 
Secretary of Health and Human Services submits the re-
port to Congress under subsection (b)), the Geographic 
Classification Review Board established under paragraph 
(10) of such section shall use the average hourly wage 
comparison criteria used in making such decisions as of 
September 30, 2008. The preceding sentence shall be ef-
fected in a budget neutral manner. 
SEC. 3138. TREATMENT OF CERTAIN CANCER HOSPITALS. 
Section 1833(t) of the Social Security Act (42 U.S.C. 
1395l(t)) is amended by adding at the end the following 
new paragraph: 
‘‘(18) AUTHORIZATION
OF
ADJUSTMENT
FOR 
CANCER HOSPITALS.— 
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862 
•AMDT. NO. 2786 
‘‘(A) STUDY.—The Secretary shall conduct 
a study to determine if, under the system under 
this subsection, costs incurred by hospitals de-
scribed in section 1886(d)(1)(B)(v) with respect 
to ambulatory payment classification groups ex-
ceed those costs incurred by other hospitals fur-
nishing services under this subsection (as deter-
mined appropriate by the Secretary). In con-
ducting the study under this subparagraph, the 
Secretary shall take into consideration the cost 
of drugs and biologicals incurred by such hos-
pitals. 
‘‘(B) AUTHORIZATION OF ADJUSTMENT.— 
Insofar as the Secretary determines under sub-
paragraph (A) that costs incurred by hospitals 
described in section 1886(d)(1)(B)(v) exceed 
those costs incurred by other hospitals fur-
nishing services under this subsection, the Sec-
retary shall provide for an appropriate adjust-
ment under paragraph (2)(E) to reflect those 
higher costs effective for services furnished on 
or after January 1, 2011.’’. 
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•AMDT. NO. 2786 
SEC. 3139. PAYMENT FOR BIOSIMILAR BIOLOGICAL PROD-
UCTS. 
(a) IN GENERAL.—Section 1847A of the Social Secu-
rity Act (42 U.S.C. 1395w–3a) is amended— 
(1) in subsection (b)— 
(A) in paragraph (1)— 
(i) in subparagraph (A), by striking 
‘‘or’’ at the end; 
(ii) in subparagraph (B), by striking 
the period at the end and inserting ‘‘; or’’; 
and 
(iii) by adding at the end the fol-
lowing new subparagraph: 
‘‘(C) in the case of a biosimilar biological 
product (as defined in subsection (c)(6)(H)), 
the amount determined under paragraph (8).’’; 
and 
(B) by adding at the end the following new 
paragraph: 
‘‘(8) BIOSIMILAR BIOLOGICAL PRODUCT.—The 
amount specified in this paragraph for a biosimilar 
biological product described in paragraph (1)(C) is 
the sum of— 
‘‘(A) the average sales price as determined 
using the methodology described under para-
graph (6) applied to a biosimilar biological 
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•AMDT. NO. 2786 
product for all National Drug Codes assigned to 
such product in the same manner as such para-
graph is applied to drugs described in such 
paragraph; and 
‘‘(B) 6 percent of the amount determined 
under paragraph (4) for the reference biological 
product (as defined in subsection (c)(6)(I)).’’; 
and 
(2) in subsection (c)(6), by adding at the end 
the following new subparagraph: 
‘‘(H) BIOSIMILAR BIOLOGICAL PRODUCT.— 
The term ‘biosimilar biological product’ means 
a biological product approved under an abbre-
viated application for a license of a biological 
product that relies in part on data or informa-
tion in an application for another biological 
product licensed under section 351 of the Pub-
lic Health Service Act. 
‘‘(I) REFERENCE BIOLOGICAL PRODUCT.— 
The term ‘reference biological product’ means 
the biological product licensed under such sec-
tion 351 that is referred to in the application 
described in subparagraph (H) of the biosimilar 
biological product.’’. 
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•AMDT. NO. 2786 
(b) EFFECTIVE DATE.—The amendments made by 
subsection (a) shall apply to payments for biosimilar bio-
logical products beginning with the first day of the second 
calendar quarter after enactment of legislation providing 
for a biosimilar pathway (as determined by the Secretary). 
SEC. 3140. MEDICARE HOSPICE CONCURRENT CARE DEM-
ONSTRATION PROGRAM. 
(a) ESTABLISHMENT.— 
(1) IN GENERAL.—The Secretary of Health and 
Human Services (in this section referred to as the 
‘‘Secretary’’) shall establish a Medicare Hospice 
Concurrent Care demonstration program at partici-
pating hospice programs under which Medicare 
beneficiaries are furnished, during the same period, 
hospice care and any other items or services covered 
under title XVIII of the Social Security Act (42 
U.S.C. 1395 et seq.) from funds otherwise paid 
under such title to such hospice programs. 
(2) DURATION.—The demonstration program 
under this section shall be conducted for a 3-year 
period. 
(3) SITES.—The Secretary shall select not more 
than 15 hospice programs at which the demonstra-
tion program under this section shall be conducted. 
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•AMDT. NO. 2786 
Such hospice programs shall be located in urban and 
rural areas. 
(b) INDEPENDENT EVALUATION AND REPORTS.— 
(1) INDEPENDENT
EVALUATION.—The Sec-
retary shall provide for the conduct of an inde-
pendent evaluation of the demonstration program 
under this section. Such independent evaluation 
shall determine whether the demonstration program 
has improved patient care, quality of life, and cost- 
effectiveness for Medicare beneficiaries participating 
in the demonstration program. 
(2) REPORTS.—The Secretary shall submit to 
Congress a report containing the results of the eval-
uation conducted under paragraph (1), together with 
such recommendations as the Secretary determines 
appropriate. 
(c) BUDGET NEUTRALITY.—With respect to the 3- 
year period of the demonstration program under this sec-
tion, the Secretary shall ensure that the aggregate expend-
itures under title XVIII for such period shall not exceed 
the aggregate expenditures that would have been expended 
under such title if the demonstration program under this 
section had not been implemented. 
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