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for selection of a qualified standard setting and cer-
tification organization— 
(A) to establish standards, consistent with 
this section, for medical practices to qualify as 
medical homes or as HIT-enhanced medical 
homes; and 
(B) to provide for the review and certifi-
cation of medical practices as meeting such 
standards. 
(2) BASIC STANDARDS FOR MEDICAL HOMES.— 
For purposes of this subsection, the term ‘‘medical 
home’’ means a physician-directed practice that has 
been certified, under paragraph (1), as meeting the 
following standards: 
(A) ACCESS
AND
COMMUNICATION
WITH 
PATIENTS.—The practice applies standards for 
access to care and communication with partici-
pating beneficiaries. 
(B) MANAGING
PATIENT
INFORMATION 
AND USING INFORMATION IN MANAGEMENT TO 
SUPPORT
PATIENT
CARE.—The practice has 
readily accessible, clinically useful information 
on participating beneficiaries that enables the 
practice to treat such beneficiaries comprehen-
sively and systematically. 
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(C) MANAGING AND COORDINATING CARE 
ACCORDING TO INDIVIDUAL NEEDS.—The prac-
tice maintains continuous relationships with 
participating beneficiaries by implementing evi-
dence-based guidelines and applying them to 
the identified needs of individual beneficiaries 
over time and with the intensity needed by such 
beneficiaries. 
(D) PROVIDING ONGOING ASSISTANCE AND 
ENCOURAGEMENT
IN
PATIENT
SELF-MANAGE-
MENT.—The practice— 
(i) collaborates with participating 
beneficiaries to pursue their goals for opti-
mal achievable health; and 
(ii) assesses patient-specific barriers 
to communication and conducts activities 
to support patient self-management. 
(E) RESOURCES TO MANAGE CARE.—The 
practice has in place the resources and proc-
esses necessary to achieve improvements in the 
management and coordination of care for par-
ticipating beneficiaries. 
(F) 
MONITORING
PERFORMANCE.—The 
practice monitors its clinical process and per-
formance (including outcome measures) in 
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HR 3162 PCS
meeting the applicable standards under this 
subsection and provides information in a form 
and manner specified by the Secretary with re-
spect to such process and performance. 
(3) ADDITIONAL
STANDARDS
FOR
HIT-EN-
HANCED MEDICAL HOME.—For purposes of this sub-
section, the term ‘‘HIT-enhanced medical home’’ 
means a medical home that has been certified, under 
paragraph (1), as using a health information tech-
nology system that includes at least the following 
elements: 
(A) 
ELECTRONIC
HEALTH
RECORD 
(EHR).—The system uses, for participating 
beneficiaries, an electronic health record that 
meets the following standards: 
(i) The record— 
(I) has the capability of inter-
operability with secure data acquisi-
tion from health information tech-
nology systems of other health care 
providers in the area served by the 
home; or 
(II) the capability to securely ac-
quire clinical data delivered by such 
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HR 3162 PCS
other health care providers to a secure 
common data source. 
(ii) The record protects the privacy 
and security of health information. 
(iii) The record has the capability to 
acquire, manage, and display all the types 
of clinical information commonly relevant 
to services furnished by the medical home, 
such as complete medical records, radio-
graphic image retrieval, and clinical labora-
tory information. 
(iv) The record is integrated with de-
cision support capacities that facilitate the 
use of evidence-based medicine and clinical 
decision support tools to guide decision- 
making at the point-of-care based on pa-
tient-specific factors. 
(B) E-PRESCRIBING.—The system sup-
ports e-prescribing and computerized physician 
order entry. 
(C) OUTCOME MEASUREMENT.—The sys-
tem supports the secure, confidential provision 
of clinical process and outcome measures ap-
proved by the National Quality Forum to the 
Secretary for use in confidential manner for 
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HR 3162 PCS
provider feedback and peer review and for out-
comes and clinical effectiveness research. 
(D) PATIENT
EDUCATION
CAPABILITY.— 
The system actively facilitates participating 
beneficiaries engaging in the management of 
their own health through education and support 
systems and tools for shared decision-making. 
(E) SUPPORT OF BASIC STANDARDS.—The 
elements of such system, such as the electronic 
health record, email communications, patient 
registries, and clinical-decision support tools, 
are integrated in a manner to better achieve the 
basic standards specified in paragraph (2) for a 
medical home. 
(4) USE OF DATA.—The Secretary shall use the 
data submitted under paragraph (1)(F) in a con-
fidential manner for feedback and peer review for 
medical homes and for outcomes and clinical effec-
tiveness research. After the first two years of the ex-
panded project, these data may be used for adjust-
ment in the monthly medical home care management 
fee under subsection (d)(2)(E). 
(d) MONTHLY MEDICAL HOME CARE MANAGEMENT 
FEE.— 
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(1) IN GENERAL.—Under the expanded project, 
the Secretary shall provide for payment to the per-
sonal physician of each participating beneficiary of a 
monthly medical home care management fee. 
(2) AMOUNT OF PAYMENT.—In determining the 
amount of such fee, the Secretary shall consider the 
following: 
(A) OPERATING
EXPENSES.—The addi-
tional practice expenses for the delivery of serv-
ices through a medical home, taking into ac-
count the additional expenses for an HIT-en-
hanced medical home. Such expenses include 
costs associated with— 
(i) structural expenses, such as equip-
ment, maintenance, and training costs; 
(ii) enhanced access and communica-
tion functions; 
(iii) population management and reg-
istry functions; 
(iv) patient medical data and referral 
tracking functions; 
(v) provision of evidence-based care; 
(vi) implementation and maintenance 
of health information technology; 
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(vii) reporting on performance and 
improvement conditions; and 
(viii) patient education and patient 
decision support, including print and elec-
tronic patient education materials. 
(B) ADDED VALUE SERVICES.—The value 
of additional physician work, such as aug-
mented care plan oversight, expanded e-mail 
and telephonic consultations, extended patient 
medical data review (including data stored and 
transmitted electronically), and physician super-
vision of enhanced self management education, 
and expanded follow-up accomplished by non- 
physician personnel, in a medical home that is 
not adequately taken into account in the estab-
lishment of the physician fee schedule under 
section 1848 of the Social Security Act. 
(C) RISK ADJUSTMENT.—The development 
of an appropriate risk adjustment mechanism 
to account for the varying costs of medical 
homes based upon characteristics of partici-
pating beneficiaries. 
(D) HIT ADJUSTMENT.—Variation of the 
fee based on the extensiveness of use of the 
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HR 3162 PCS
health information technology in the medical 
home. 
(E) 
PERFORMANCE-BASED.—After 
the 
first two years of the expanded project, an ad-
justment of the fee based on performance of the 
medical home in achieving quality or outcomes 
standards. 
(3) PERSONAL PHYSICIAN DEFINED.—For pur-
poses of this subsection, the term ‘‘personal physi-
cian’’ means, with respect to a participating Medi-
care beneficiary, a physician (as defined in section 
1861(r)(1) of the Social Security Act (42 U.S.C. 
1395x(r)(1)) who provides accessible, continuous, co-
ordinated, and comprehensive care for the bene-
ficiary as part of a medical practice that is a quali-
fied medical home. Such a physician may be a spe-
cialist for a beneficiary requiring ongoing care for a 
chronic condition or multiple chronic conditions 
(such as severe asthma, complex diabetes, cardio-
vascular disease, rheumatologic disorder) or for a 
beneficiary with a prolonged illness. 
(e) FUNDING.— 
(1) USE
OF
CURRENT
PROJECT
FUNDING.— 
Funds otherwise applied to the demonstration under 
section 204 of the Medicare Improvement and Ex-
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HR 3162 PCS
tension Act of 2006 (division B of Public Law 109– 
432) shall be available to carry out the expanded 
project. 
(2) ADDITIONAL
FUNDING
FROM
SMI
TRUST 
FUND.— 
(A) IN
GENERAL.—In addition to the 
funds provided under paragraph (1), there shall 
be available, from the Federal Supplementary 
Medical Insurance Trust Fund (under section 
1841 of the Social Security Act), the amount of 
$500,000,000 to carry out the expanded 
project, including payments to of monthly med-
ical home care management fees under sub-
section (d), reductions in coinsurance for par-
ticipating 
beneficiaries 
under 
subsection 
(b)(4)(B), and funds for the design, implemen-
tation, and evaluation of the expanded project. 
(B) MONITORING EXPENDITURES; EARLY 
TERMINATION.—The Secretary shall monitor 
the expenditures under the expanded project 
and may terminate the project early in order 
that expenditures not exceed the amount of 
funding provided for the project under subpara-
graph (A). 
(f) EVALUATIONS AND REPORTS.— 
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