I 
114TH CONGRESS 
1ST SESSION H. R. 3298 
To amend title XVIII of the Social Security Act to provide for value-based 
purchasing of post-acute care services under the Medicare program, and 
for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 29, 2015 
Mr. BRADY of Texas (for himself and Mr. KIND) introduced the following bill; 
which was referred to the Committee on Ways and Means, and in addi-
tion to the Committee on Energy and Commerce, for a period to be sub-
sequently determined by the Speaker, in each case for consideration of 
such provisions as fall within the jurisdiction of the committee concerned 
A BILL 
To amend title XVIII of the Social Security Act to provide 
for value-based purchasing of post-acute care services 
under the Medicare program, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Medicare Post-Acute 
Care Value-Based Purchasing Act of 2015’’. 
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SEC. 2. REPEAL OF MARKET BASKET CUTS FOR POST- 
ACUTE PROVIDERS. 
(a) SNFS.—Section 1888(e) of the Social Security 
Act (42 U.S.C. 1395yy(e)), as amended by section 411(a) 
of the Medicare Access and CHIP Reauthorization Act of 
2015, is amended— 
(1) in paragraph (5)(B)— 
(A) in clause (i), by striking ‘‘clauses (ii) 
and (iii)’’ and inserting ‘‘clause (ii)’’; 
(B) in clause (ii), by striking ‘‘subject to 
clause (iii),’’; and 
(C) by striking clause (iii); and 
(2) in paragraph (6)(A)(i), by striking ‘‘clauses 
(ii) and (iii) of paragraph (5)(B)’’ and inserting 
‘‘paragraph (5)(B)(ii)’’. 
(b) IRFS.—Section 1886(j) of the Social Security Act 
(42 U.S.C. 1395ww(j)), as amended by section 411(b) of 
the Medicare Access and CHIP Reauthorization Act of 
2015, is amended— 
(1) in paragraph (3)(C)— 
(A) in clause (i), by striking ‘‘clauses (ii) 
and (iii)’’ and inserting ‘‘clause (ii)’’; 
(B) in clause (ii), by striking ‘‘Subject to 
clause (iii), after’’ and inserting ‘‘After’’ ; and 
(C) by striking clause (iii); and 
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(2) in paragraph (7)(A)(i), by striking ‘‘sub-
paragraphs (C)(iii) and (D) of paragraph (3)’’ and 
inserting ‘‘paragraph (3)(D)’’. 
(c) HHAS.—Section 1895(b)(3)(B) of the Social Se-
curity Act (42 U.S.C. 1395fff(b)(3)(B)), as amended by 
section 411(c) of the Medicare Access and CHIP Reau-
thorization Act of 2015, is amended— 
(1) in clause (iii), by striking the last sentence; 
and 
(2) in clause (vi)(I), by striking ‘‘(except 
2018)’’. 
(d) LTCHS.—Section 1886(m)(3) of the Social Secu-
rity Act (42 U.S.C. 1395ww(m)(3)), as amended by sec-
tion 411(e) of the Medicare Access and CHIP Reauthor-
ization Act of 2015, is amended— 
(1) in subparagraph (A), by striking ‘‘Subject 
to subparagraph (C), in implementing’’ and insert-
ing ‘‘In implementing’’; and 
(2) by striking subparagraph (C). 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall be effective as if included in the enact-
ment of the Medicare Access and CHIP Reauthorization 
Act of 2015. 
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SEC. 3. POST-ACUTE CARE VALUE-BASED PURCHASING 
PROGRAM. 
(a) IN GENERAL.—Section 1899B of the Social Secu-
rity Act (42 U.S.C. 1395lll) is amended— 
(1) in the heading, by inserting ‘‘; POST- 
ACUTE CARE VALUE-BASED PURCHASING PRO-
GRAM’’ before the period at the end; and 
(2) by adding at the end the following new sub-
section: 
‘‘(n) POST-ACUTE CARE VALUE-BASED PURCHASING 
PROGRAM (PAC VBP PROGRAM).— 
‘‘(1) ESTABLISHMENT.— 
‘‘(A) IN
GENERAL.—Subject to the suc-
ceeding provisions of this subsection, the Sec-
retary shall establish a post-acute care value- 
based purchasing program (in this subsection 
referred to as the ‘PAC VBP Program’) under 
which value-based incentive payments are made 
in a payment year to PAC providers. 
‘‘(B) PROGRAM
IMPLEMENTATION.—The 
PAC VBP Program shall apply to payments for 
services furnished in payment years beginning 
on or after October 1, 2019. 
‘‘(C) TREATMENT
OF
NEW
PAC
PRO-
VIDERS.—In the case of a PAC provider that 
first begins participation in the program under 
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(d)(1)(A) for purposes of the PAC VBP Pro-
gram. 
‘‘(B) APPLICATION
ON
PROVIDER
AND 
AREA BASIS.—Such measure shall be applied 
separately— 
‘‘(i) for each PAC provider; and 
‘‘(ii) for all PAC providers, regardless 
of type, in each hospital service area or 
comparable area (as determined by the 
Secretary) in which an individual receives 
a service from any PAC provider involved 
under this title in such area. 
‘‘(3) PERFORMANCE STANDARDS.— 
‘‘(A) 
ESTABLISHMENT.—The 
Secretary 
shall establish performance standards consistent 
with this paragraph with respect to the measure 
applied under paragraph (2) for a performance 
period for a payment year. 
‘‘(B) HIGHER OF ACHIEVEMENT AND IM-
PROVEMENT.—The performance standards es-
tablished under subparagraph (A) shall include 
levels of achievement and improvement. In cal-
culating the performance score of a PAC pro-
vider (including an area) under paragraph (4), 
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the Secretary shall use the higher of either im-
provement or achievement. 
‘‘(C) TIMING.—The Secretary shall estab-
lish and announce the performance standards 
established under subparagraph (A) not later 
than 90 days before the beginning of the per-
formance period for the payment year involved. 
‘‘(4) PAC PERFORMANCE SCORES.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
develop a methodology for assessing the total 
performance of each PAC provider, and of each 
hospital service area or comparable area (as de-
termined by the Secretary, based on perform-
ance standards established under paragraph (3) 
with respect to the measure applied under para-
graph (2) for a performance period for a pay-
ment year. 
‘‘(B) COMPUTATION OF INDIVIDUAL, AREA, 
AND
COMPOSITE
PERFORMANCE
SCORES.— 
Using such methodology, the Secretary shall 
provide for— 
‘‘(i) an assessment, based on the 
measure 
applied 
under 
paragraph 
(2)(B)(i), for each individual PAC provider 
for each performance period; 
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‘‘(ii) an assessment, based on the 
measure 
applied 
under 
paragraph 
(2)(B)(ii), for all PAC providers in each 
area described in such paragraph for each 
performance period; and 
‘‘(iii) a composite assessment (in this 
subsection referred to as the ‘PAC com-
posite performance score’) for each PAC 
provider for each performance period equal 
to the sum of— 
‘‘(I) 55 percent of the perform-
ance score under clause (i) for the pe-
riod for that PAC provider; and 
‘‘(II) 45 percent of the perform-
ance score under clause (ii) for the 
period for all PAC providers located 
in the area in which the PAC provider 
is located. 
‘‘(C) RANKING
OF
PAC
PERFORMANCE 
SCORES.—The Secretary shall, for the perform-
ance period for each payment year for each type 
of PAC provider, rank the PAC composite per-
formance scores determined under subpara-
graph (B)(iii) from low to high. 
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‘‘(5) CALCULATION
OF
VALUE-BASED
INCEN-
TIVE PAYMENTS.— 
‘‘(A) IN
GENERAL.—With respect to a 
PAC provider, based on the ranking under 
paragraph (4)(C) for a performance period for 
a payment year, the Secretary shall increase the 
payment basis specified in subparagraph (B) 
otherwise applicable to such provider for serv-
ices furnished by such provider during such 
payment year by the value-based incentive pay-
ment percentage specified under subparagraph 
(C) for the provider and payment year. 
‘‘(B) 
PAYMENT
BASIS.—The 
payment 
basis specified in this subparagraph for a type 
of provider is as follows, as applied after the 
application of paragraph (6): 
‘‘(i) SKILLED NURSING FACILITIES.— 
For skilled nursing facilities, the adjusted 
Federal per diem rate under section 
1888(e)(4)(B). 
‘‘(ii) INPATIENT REHABILITATION FA-
CILITIES.—For inpatient rehabilitation fa-
cilities, the prospective per unit payment 
rate under section 1886(j)(3). 
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‘‘(iii) LONG-TERM CARE HOSPITALS.— 
For long-term care hospitals, the standard 
Federal rate under section 1886(m), or, if 
applicable, the applicable site neutral pay-
ment rate under paragraph (6) of such 
section. 
‘‘(iv) HOME HEALTH AGENCIES.—For 
home health agencies, the standard pro-
spective payment amount (or amounts) 
under section 1895(b)(3). 
‘‘(C) VALUE-BASED INCENTIVE PAYMENT 
PERCENTAGE.—The Secretary shall specify a 
value-based incentive payment percentage for 
each PAC provider for a payment year, which 
may include a zero percentage but not a per-
centage below zero. In specifying the value- 
based incentive payment percentage for each 
PAC provider for a payment year under this 
subparagraph, the Secretary shall ensure that— 
‘‘(i) such percentage is based on the 
ranking of PAC composite performance 
score of the provider under paragraph (4) 
for the performance period for the pay-
ment year; 
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‘‘(ii) the application of all such per-
centages for a type of PAC provider for a 
payment year results in an appropriate dis-
tribution of value-based incentive increases 
under subparagraph (A) such that— 
‘‘(I) PAC providers with the 
highest rankings under paragraph 
(4)(C) receive the highest value-based 
incentive payment percentages under 
this subparagraph; and 
‘‘(II) PAC providers with the 
lowest rankings under such paragraph 
receive the lowest value-based incen-
tive payment percentages under this 
subparagraph; and 
‘‘(iii) the total amount of value-based 
incentive increases under this paragraph 
for all PAC providers for each type of pro-
vider in such payment year shall be at 
least 50 percent, but not greater than 70 
percent, of the total amount of the reduc-
tions to payments for PAC providers of 
such type for such payment year under 
paragraph (6), as estimated by the Sec-
retary. 
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‘‘(6) FUNDING FOR VALUE-BASED INCENTIVE 
PAYMENTS.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
reduce the payment basis (as defined in para-
graph (5)(B)), not taking into account any in-
crease under paragraph (5), for each type of 
PAC provider for each payment year begin-
ning— 
‘‘(i) during fiscal year 2020 by 3 per-
cent; 
‘‘(ii) during fiscal year 2021 by 4 per-
cent; 
‘‘(iii) during fiscal year 2022 by 5 
percent; 
‘‘(iv) during fiscal year 2023 by 6 per-
cent; 
‘‘(v) during fiscal year 2024 by 7 per-
cent; and 
‘‘(vi) during or after fiscal year 2025 
by 8 percent. 
‘‘(B) IMPLEMENTATION.—The Secretary 
shall make such reductions for all PAC pro-
viders in the payment year involved, regardless 
of whether or not the PAC provider has been 
determined by the Secretary to have earned a 
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value-based incentive payment increase under 
paragraph (5) for such payment year. 
‘‘(7) ANNOUNCEMENT OF NET RESULT OF AD-
JUSTMENTS.—Under the PAC VBP Program, the 
Secretary shall, not later than 90 days prior to the 
payment year involved, inform each PAC provider of 
the adjustments to payments to the PAC provider 
for services furnished by such provider during the 
payment year under paragraphs (5) and (6). 
‘‘(8) NO
EFFECT
IN
SUBSEQUENT
FISCAL 
YEARS.—The value-based incentive payment increase 
under paragraph (5) and the payment reduction 
under paragraph (6) shall each apply only with re-
spect to the payment year involved, and the Sec-
retary shall not take into account such value-based 
incentive payment increase or payment reduction in 
making payments to a PAC provider under this title 
in a subsequent payment year. 
‘‘(9) PUBLIC REPORTING.— 
‘‘(A) PAC SPECIFIC
INFORMATION.—The 
Secretary shall make available to the public, by 
posting on the relevant Compare Medicare 
website (or a successor website) in an easily un-
derstandable format, information regarding the 
performance of individual PAC providers under 
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the PAC VBP Program, with respect to a pay-
ment year, including— 
‘‘(i) the PAC composite performance 
score of the PAC provider for such pay-
ment year; and 
‘‘(ii) the ranking of the PAC provider 
under paragraph (4)(C) for the perform-
ance period for such payment year. 
‘‘(B) 
AGGREGATE
INFORMATION.—The 
Secretary shall periodically post on the relevant 
websites referred to in subparagraph (A) aggre-
gate information on the PAC VBP Program for 
the types of providers, including— 
‘‘(i) the range of PAC composite per-
formance scores under paragraph (4)(B); 
and 
‘‘(ii) the number of PAC providers of 
each type receiving value-based incentive 
payment increases under paragraph (5) 
and the range and total amount of such 
value-based incentive payment increases. 
‘‘(10) LIMITATION ON REVIEW.—There shall be 
no administrative or judicial review under section 
1869, section 1878, or otherwise of the following: 
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‘‘(A) The establishment of the performance 
standards under paragraph (3) and the per-
formance period. 
‘‘(B) The methodology developed under 
paragraph (4) that is used to calculate PAC 
composite performance scores and the calcula-
tion of such scores. 
‘‘(C) The ranking determinations under 
paragraph (4)(C). 
‘‘(D) The methodology used to determine 
the value-based incentive payment percentages 
under paragraph (5). 
‘‘(E) The determination of the amount of 
funding available for such value-based incentive 
payments under paragraph (5)(C)(iii).’’. 
(b) CONFORMING AMENDMENTS.— 
(1) SNF PAYMENT.—Section 1888(e)(4) of the 
Social Security Act (42 U.S.C. 1395yy(e)(4)) is 
amended by adding at the end the following new 
subparagraph: 
‘‘(I) VALUE-BASED PURCHASING ADJUST-
MENT.—The adjusted Federal per diem rate 
under subparagraph (B) is subject to adjust-
ment under paragraphs (5) and (6) of section 
1899B(n).’’. 
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(2) INPATIENT REHABILITATION FACILITIES.— 
Section 1886(j)(3) of the Social Security Act (42 
U.S.C. 1395ww(j)(3)) is amended by adding at the 
end the following new subparagraph: 
‘‘(D) VALUE-BASED PURCHASING ADJUST-
MENT.—The prospective per unit payment rate 
under this paragraph is subject to adjustment 
under paragraphs (5) and (6) of section 
1899B(n).’’. 
(3) LONG-TERM
CARE
HOSPITALS.—Section 
1886(m) of the Social Security Act (42 U.S.C. 
1395ww(m)) is amended by adding at the end the 
following new paragraph: 
‘‘(7) 
VALUE-BASED
PURCHASING
ADJUST-
MENT.—The standard Federal rate under this sub-
section, or, if applicable, the applicable site neutral 
payment rate under paragraph (6), is subject to ad-
justment under paragraphs (5) and (6) of section 
1899B(n).’’. 
(4) 
HOME
HEALTH
AGENCIES.—Section 
1895(b)(3) of the Social Security Act (42 U.S.C. 
1395fff(b)(3)) is amended by adding at the end the 
following new subparagraph: 
‘‘(D) VALUE-BASED PURCHASING ADJUST-
MENT.—The standard prospective payment 
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amount (or amounts) under this paragraph is 
subject to adjustment under paragraphs (5) 
and (6) of section 1899B(n).’’. 
SEC. 4. SUNSETTING OF SKILLED NURSING FACILITY 
VALUE-BASED PURCHASING (SNF VBP) PRO-
GRAM. 
Section 1888(h)(1)(B) of the Social Security Act (42 
U.S.C. 1395yy(h)(1)(B)) is amended— 
(1) in the heading, by inserting ‘‘AND TO END 
IN FISCAL YEAR 2025’’ after ‘‘FISCAL YEAR 2019’’; 
and 
(2) by inserting ‘‘and before October 1, 2025’’ 
after ‘‘2018’’. 
Æ 
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