632 
•AMDT. NO. 2786 
‘‘(C) VALUE-BASED INCENTIVE PAYMENT 
PERCENTAGE.— 
‘‘(i) IN
GENERAL.—The Secretary 
shall specify a value-based incentive pay-
ment percentage for a hospital for a fiscal 
year. 
‘‘(ii) REQUIREMENTS.—In specifying 
the value-based incentive payment percent-
age for each hospital for a fiscal year 
under clause (i), the Secretary shall ensure 
that— 
‘‘(I) such percentage is based on 
the hospital performance score of the 
hospital under paragraph (5); and 
‘‘(II) the total amount of value- 
based incentive payments under this 
paragraph to all hospitals in such fis-
cal year is equal to the total amount 
available for value-based incentive 
payments for such fiscal year under 
paragraph (7)(A), as estimated by the 
Secretary. 
‘‘(7) FUNDING FOR VALUE-BASED INCENTIVE 
PAYMENTS.— 
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•AMDT. NO. 2786 
‘‘(A) AMOUNT.—The total amount avail-
able for value-based incentive payments under 
paragraph (6) for all hospitals for a fiscal year 
shall be equal to the total amount of reduced 
payments for all hospitals under subparagraph 
(B) for such fiscal year, as estimated by the 
Secretary. 
‘‘(B) ADJUSTMENT TO PAYMENTS.— 
‘‘(i) IN
GENERAL.—The Secretary 
shall reduce the base operating DRG pay-
ment amount (as defined in subparagraph 
(D)) for a hospital for each discharge in a 
fiscal year (beginning with fiscal year 
2013) by an amount equal to the applica-
ble percent (as defined in subparagraph 
(C)) of the base operating DRG payment 
amount for the discharge for the hospital 
for such fiscal year. The Secretary shall 
make such reductions for all hospitals in 
the fiscal year involved, regardless of 
whether or not the hospital has been deter-
mined by the Secretary to have earned a 
value-based incentive payment under para-
graph (6) for such fiscal year. 
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•AMDT. NO. 2786 
‘‘(ii) NO
EFFECT
ON
OTHER
PAY-
MENTS.—Payments described in items (aa) 
and (bb) of subparagraph (D)(i)(II) for a 
hospital shall be determined as if this sub-
section had not been enacted. 
‘‘(C) APPLICABLE
PERCENT
DEFINED.— 
For purposes of subparagraph (B), the term 
‘applicable percent’ means— 
‘‘(i) with respect to fiscal year 2013, 
1.0 percent; 
‘‘(ii) with respect to fiscal year 2014, 
1.25 percent; 
‘‘(iii) with respect to fiscal year 2015, 
1.5 percent; 
‘‘(iv) with respect to fiscal year 2016, 
1.75 percent; and 
‘‘(v) with respect to fiscal year 2017 
and succeeding fiscal years, 2 percent. 
‘‘(D) BASE
OPERATING
DRG
PAYMENT 
AMOUNT DEFINED.— 
‘‘(i) IN
GENERAL.—Except as pro-
vided in clause (ii), 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 sub-
section (d) (determined without re-
gard to subsection (q)) for a discharge 
if this subsection did not apply; re-
duced by 
‘‘(II) any portion of such pay-
ment amount that is attributable to— 
‘‘(aa) payments under para-
graphs (5)(A), (5)(B), (5)(F), 
and (12) of subsection (d); and 
‘‘(bb) such other payments 
under subsection (d) determined 
appropriate by the Secretary. 
‘‘(ii) SPECIAL
RULES
FOR
CERTAIN 
HOSPITALS.— 
‘‘(I) 
SOLE
COMMUNITY
HOS-
PITALS
AND
MEDICARE-DEPENDENT, 
SMALL
RURAL
HOSPITALS.—In the 
case of a medicare-dependent, small 
rural hospital (with respect to dis-
charges occurring during fiscal year 
2012 and 2013) or a sole community 
hospital, in applying subparagraph 
(A)(i), the payment amount that 
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•AMDT. NO. 2786 
would otherwise be made under sub-
section (d) shall be determined with-
out regard to subparagraphs (I) and 
(L) of subsection (b)(3) and subpara-
graphs (D) and (G) of subsection 
(d)(5). 
‘‘(II) HOSPITALS
PAID
UNDER 
SECTION 1814.—In the case of a hos-
pital that is paid under section 
1814(b)(3), the term ‘base operating 
DRG payment amount’ means the 
payment amount under such section. 
‘‘(8) ANNOUNCEMENT OF NET RESULT OF AD-
JUSTMENTS.—Under the Program, the Secretary 
shall, not later than 60 days prior to the fiscal year 
involved, inform each hospital of the adjustments to 
payments to the hospital for discharges occurring in 
such fiscal year under paragraphs (6) and (7)(B)(i). 
‘‘(9) NO
EFFECT
IN
SUBSEQUENT
FISCAL 
YEARS.—The value-based incentive payment under 
paragraph (6) and the payment reduction under 
paragraph (7)(B)(i) shall each apply only with re-
spect to the fiscal year involved, and the Secretary 
shall not take into account such value-based incen-
tive payment or payment reduction in making pay-
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•AMDT. NO. 2786 
ments to a hospital under this section in a subse-
quent fiscal year. 
‘‘(10) PUBLIC REPORTING.— 
‘‘(A) HOSPITAL SPECIFIC INFORMATION.— 
‘‘(i) IN
GENERAL.—The Secretary 
shall make information available to the 
public regarding the performance of indi-
vidual hospitals under the Program, in-
cluding— 
‘‘(I) the performance of the hos-
pital with respect to each measure 
that applies to the hospital; 
‘‘(II) the performance of the hos-
pital with respect to each condition or 
procedure; and 
‘‘(III) the hospital performance 
score assessing the total performance 
of the hospital. 
‘‘(ii) OPPORTUNITY TO REVIEW AND 
SUBMIT
CORRECTIONS.—The 
Secretary 
shall ensure that a hospital has the oppor-
tunity to review, and submit corrections 
for, the information to be made public with 
respect to the hospital under clause (i) 
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•AMDT. NO. 2786 
prior to such information being made pub-
lic. 
‘‘(iii) WEBSITE.—Such information 
shall be posted on the Hospital Compare 
Internet website in an easily understand-
able format. 
‘‘(B) 
AGGREGATE
INFORMATION.—The 
Secretary shall periodically post on the Hospital 
Compare Internet website aggregate informa-
tion on the Program, including— 
‘‘(i) the number of hospitals receiving 
value-based 
incentive 
payments 
under 
paragraph (6) and the range and total 
amount of such value-based incentive pay-
ments; and 
‘‘(ii) the number of hospitals receiving 
less than the maximum value-based incen-
tive payment available to the hospital for 
the fiscal year involved and the range and 
amount of such payments. 
‘‘(11) IMPLEMENTATION.— 
‘‘(A) APPEALS.—The Secretary shall es-
tablish a process by which hospitals may appeal 
the calculation of a hospital’s performance as-
sessment with respect to the performance 
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•AMDT. NO. 2786 
standards established under paragraph (3)(A) 
and the hospital performance score under para-
graph (5). The Secretary shall ensure that such 
process provides for resolution of such appeals 
in a timely manner. 
‘‘(B) LIMITATION ON REVIEW.—Except as 
provided in subparagraph (A), there shall be no 
administrative or judicial review under section 
1869, section 1878, or otherwise of the fol-
lowing: 
‘‘(i) The methodology used to deter-
mine the amount of the value-based incen-
tive payment under paragraph (6) and the 
determination of such amount. 
‘‘(ii) The determination of the amount 
of funding available for such value-based 
incentive 
payments 
under 
paragraph 
(7)(A) and the payment reduction under 
paragraph (7)(B)(i). 
‘‘(iii) The establishment of the per-
formance standards under paragraph (3) 
and the performance period under para-
graph (4). 
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•AMDT. NO. 2786 
‘‘(iv) The measures specified under 
subsection (b)(3)(B)(viii) and the measures 
selected under paragraph (2). 
‘‘(v) The methodology developed under 
paragraph (5) that is used to calculate 
hospital performance scores and the cal-
culation of such scores. 
‘‘(vi) 
The 
validation 
methodology 
specified in subsection (b)(3)(B)(viii)(XI). 
‘‘(C) CONSULTATION
WITH
SMALL
HOS-
PITALS.—The Secretary shall consult with small 
rural and urban hospitals on the application of 
the Program to such hospitals. 
‘‘(12) PROMULGATION OF REGULATIONS.—The 
Secretary shall promulgate regulations to carry out 
the Program, including the selection of measures 
under paragraph (2), the methodology developed 
under paragraph (5) that is used to calculate hos-
pital performance scores, and the methodology used 
to determine the amount of value-based incentive 
payments under paragraph (6).’’. 
(2) AMENDMENTS
FOR
REPORTING
OF
HOS-
PITAL
QUALITY
INFORMATION.—Section 
1886(b)(3)(B)(viii) of the Social Security Act (42 
U.S.C. 1395ww(b)(3)(B)(viii)) is amended— 
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•AMDT. NO. 2786 
(A) in subclause (II), by adding at the end 
the following sentence: ‘‘The Secretary may re-
quire hospitals to submit data on measures that 
are not used for the determination of value- 
based incentive payments under subsection 
(o).’’; 
(B) in subclause (V), by striking ‘‘begin-
ning with fiscal year 2008’’ and inserting ‘‘for 
fiscal years 2008 through 2012’’; 
(C) in subclause (VII), in the first sen-
tence, by striking ‘‘data submitted’’ and insert-
ing ‘‘information regarding measures sub-
mitted’’; and 
(D) by adding at the end the following new 
subclauses: 
‘‘(VIII) Effective for payments beginning with fiscal 
year 2013, with respect to quality measures for outcomes 
of care, the Secretary shall provide for such risk adjust-
ment as the Secretary determines to be appropriate to 
maintain incentives for hospitals to treat patients with se-
vere illnesses or conditions. 
‘‘(IX)(aa) Subject to item (bb), effective for payments 
beginning with fiscal year 2013, each measure specified 
by the Secretary under this clause shall be endorsed by 
the entity with a contract under section 1890(a). 
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•AMDT. NO. 2786 
‘‘(bb) In the case of a specified area or medical topic 
determined appropriate by the Secretary for which a fea-
sible and practical measure has not been endorsed by the 
entity with a contract under section 1890(a), the Sec-
retary may specify a measure that is not so endorsed as 
long as due consideration is given to measures that have 
been endorsed or adopted by a consensus organization 
identified by the Secretary. 
‘‘(X) To the extent practicable, the Secretary shall, 
with input from consensus organizations and other stake-
holders, take steps to ensure that the measures specified 
by the Secretary under this clause are coordinated and 
aligned with quality measures applicable to— 
‘‘(aa) physicians under section 1848(k); and 
‘‘(bb) other providers of services and suppliers 
under this title. 
‘‘(XI) The Secretary shall establish a process to vali-
date measures specified under this clause as appropriate. 
Such process shall include the auditing of a number of 
randomly selected hospitals sufficient to ensure validity of 
the reporting program under this clause as a whole and 
shall provide a hospital with an opportunity to appeal the 
validation of measures reported by such hospital.’’. 
(3) 
WEBSITE
IMPROVEMENTS.—Section 
1886(b)(3)(B) of the Social Security Act (42 U.S.C. 
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•AMDT. NO. 2786 
1395ww(b)(3)(B)), as amended by section 4102(b) 
of the HITECH Act (Public Law 111–5), is amend-
ed by adding at the end the following new clause: 
‘‘(x)(I) The Secretary shall develop standard Internet 
website reports tailored to meet the needs of various stake-
holders such as hospitals, patients, researchers, and pol-
icymakers. The Secretary shall seek input from such 
stakeholders in determining the type of information that 
is useful and the formats that best facilitate the use of 
the information. 
‘‘(II) The Secretary shall modify the Hospital Com-
pare Internet website to make the use and navigation of 
that website readily available to individuals accessing it.’’. 
(4) GAO STUDY AND REPORT.— 
(A) STUDY.—The Comptroller General of 
the United States shall conduct a study on the 
performance of the hospital value-based pur-
chasing program established under section 
1886(o) of the Social Security Act, as added by 
paragraph (1). Such study shall include an 
analysis of the impact of such program on— 
(i) the quality of care furnished to 
Medicare beneficiaries, including diverse 
Medicare beneficiary populations (such as 
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•AMDT. NO. 2786 
diverse in terms of race, ethnicity, and so-
cioeconomic status); 
(ii) expenditures under the Medicare 
program, including any reduced expendi-
tures under Part A of title XVIII of such 
Act that are attributable to the improve-
ment in the delivery of inpatient hospital 
services by reason of such hospital value- 
based purchasing program; 
(iii) the quality performance among 
safety net hospitals and any barriers such 
hospitals face in meeting the performance 
standards applicable under such hospital 
value-based purchasing program; and 
(iv) the quality performance among 
small rural and small urban hospitals and 
any barriers such hospitals face in meeting 
the 
performance 
standards 
applicable 
under such hospital value-based purchasing 
program. 
(B) REPORTS.— 
(i) INTERIM REPORT.—Not later than 
October 1, 2015, the Comptroller General 
of the United States shall submit to Con-
gress an interim report containing the re-
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•AMDT. NO. 2786 
sults of the study conducted under sub-
paragraph (A), together with recommenda-
tions for such legislation and administra-
tive action as the Comptroller General de-
termines appropriate. 
(ii) FINAL REPORT.—Not later than 
July 1, 2017, the Comptroller General of 
the United States shall submit to Congress 
a report containing the results of the study 
conducted under subparagraph (A), to-
gether with recommendations for such leg-
islation and administrative action as the 
Comptroller General determines appro-
priate. 
(5) HHS STUDY AND REPORT.— 
(A) STUDY.—The Secretary of Health and 
Human Services shall conduct a study on the 
performance of the hospital value-based pur-
chasing program established under section 
1886(o) of the Social Security Act, as added by 
paragraph (1). Such study shall include an 
analysis— 
(i) of ways to improve the hospital 
value-based purchasing program and ways 
to address any unintended consequences 
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•AMDT. NO. 2786 
that may occur as a result of such pro-
gram; 
(ii) of whether the hospital value- 
based purchasing program resulted in 
lower spending under the Medicare pro-
gram under title XVIII of such Act or 
other financial savings to hospitals; 
(iii) the appropriateness of the Medi-
care program sharing in any savings gen-
erated through the hospital value-based 
purchasing program; and 
(iv) any other area determined appro-
priate by the Secretary. 
(B) REPORT.—Not later than January 1, 
2016, the Secretary of Health and Human 
Services shall submit to Congress a report con-
taining the results of the study conducted under 
subparagraph (A), together with recommenda-
tions for such legislation and administrative ac-
tion as the Secretary determines appropriate. 
(b) VALUE-BASED PURCHASING DEMONSTRATION 
PROGRAMS.— 
(1) VALUE-BASED
PURCHASING
DEMONSTRA-
TION
PROGRAM
FOR
INPATIENT
CRITICAL
ACCESS 
HOSPITALS.— 
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•AMDT. NO. 2786 
(A) ESTABLISHMENT.— 
(i) IN GENERAL.—Not later than 2 
years after the date of enactment of this 
Act, the Secretary of Health and Human 
Services (in this subsection referred to as 
the ‘‘Secretary’’) shall establish a dem-
onstration program under which the Sec-
retary establishes a value-based purchasing 
program under the Medicare program 
under title XVIII of the Social Security 
Act for critical access hospitals (as defined 
in paragraph (1) of section 1861(mm) of 
such Act (42 U.S.C. 1395x(mm))) with re-
spect to inpatient critical access hospital 
services (as defined in paragraph (2) of 
such section) in order to test innovative 
methods of measuring and rewarding qual-
ity and efficient health care furnished by 
such hospitals. 
(ii) DURATION.—The demonstration 
program under this paragraph shall be 
conducted for a 3-year period. 
(iii) SITES.—The Secretary shall con-
duct the demonstration program under this 
paragraph at an appropriate number (as 
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•AMDT. NO. 2786 
determined by the Secretary) of critical ac-
cess hospitals. The Secretary shall ensure 
that such hospitals are representative of 
the spectrum of such hospitals that partici-
pate in the Medicare program. 
(B) WAIVER AUTHORITY.—The Secretary 
may waive such requirements of titles XI and 
XVIII of the Social Security Act as may be nec-
essary to carry out the demonstration program 
under this paragraph. 
(C) 
BUDGET
NEUTRALITY
REQUIRE-
MENT.—In conducting the demonstration pro-
gram under this section, the Secretary shall en-
sure that the aggregate payments made by the 
Secretary do not exceed the amount which the 
Secretary would have paid if the demonstration 
program under this section was not imple-
mented. 
(D) REPORT.—Not later than 18 months 
after the completion of the demonstration pro-
gram under this paragraph, the Secretary shall 
submit to Congress a report on the demonstra-
tion program together with— 
(i) recommendations on the establish-
ment of a permanent value-based pur-
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•AMDT. NO. 2786 
chasing program under the Medicare pro-
gram for critical access hospitals with re-
spect to inpatient critical access hospital 
services; and 
(ii) recommendations for such other 
legislation and administrative action as the 
Secretary determines appropriate. 
(2) VALUE-BASED
PURCHASING
DEMONSTRA-
TION PROGRAM FOR HOSPITALS EXCLUDED FROM 
HOSPITAL VALUE-BASED PURCHASING PROGRAM AS 
A RESULT OF INSUFFICIENT NUMBERS OF MEAS-
URES AND CASES.— 
(A) ESTABLISHMENT.— 
(i) IN GENERAL.—Not later than 2 
years after the date of enactment of this 
Act, the Secretary shall establish a dem-
onstration program under which the Sec-
retary establishes a value-based purchasing 
program under the Medicare program 
under title XVIII of the Social Security 
Act for applicable hospitals (as defined in 
clause (ii)) with respect to inpatient hos-
pital services (as defined in section 
1861(b) of the Social Security Act (42 
U.S.C. 1395x(b))) in order to test innova-
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•AMDT. NO. 2786 
tive methods of measuring and rewarding 
quality and efficient health care furnished 
by such hospitals. 
(ii) 
APPLICABLE
HOSPITAL
DE-
FINED.—For purposes of this paragraph, 
the term ‘‘applicable hospital’’ means a 
hospital described in subclause (III) or 
(IV) of section 1886(o)(1)(C)(ii) of the So-
cial Security Act, as added by subsection 
(a)(1). 
(iii) DURATION.—The demonstration 
program under this paragraph shall be 
conducted for a 3-year period. 
(iv) SITES.—The Secretary shall con-
duct the demonstration program under this 
paragraph at an appropriate number (as 
determined by the Secretary) of applicable 
hospitals. The Secretary shall ensure that 
such hospitals are representative of the 
spectrum of such hospitals that participate 
in the Medicare program. 
(B) WAIVER AUTHORITY.—The Secretary 
may waive such requirements of titles XI and 
XVIII of the Social Security Act as may be nec-
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•AMDT. NO. 2786 
essary to carry out the demonstration program 
under this paragraph. 
(C) 
BUDGET
NEUTRALITY
REQUIRE-
MENT.—In conducting the demonstration pro-
gram under this section, the Secretary shall en-
sure that the aggregate payments made by the 
Secretary do not exceed the amount which the 
Secretary would have paid if the demonstration 
program under this section was not imple-
mented. 
(D) REPORT.—Not later than 18 months 
after the completion of the demonstration pro-
gram under this paragraph, the Secretary shall 
submit to Congress a report on the demonstra-
tion program together with— 
(i) recommendations on the establish-
ment of a permanent value-based pur-
chasing program under the Medicare pro-
gram for applicable hospitals with respect 
to inpatient hospital services; and 
(ii) recommendations for such other 
legislation and administrative action as the 
Secretary determines appropriate. 
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•AMDT. NO. 2786 
SEC. 3002. IMPROVEMENTS TO THE PHYSICIAN QUALITY 
REPORTING SYSTEM. 
(a) EXTENSION.—Section 1848(m) of the Social Se-
curity Act (42 U.S.C. 1395w–4(m)) is amended— 
(1) in paragraph (1)— 
(A) in subparagraph (A), in the matter 
preceding clause (i), by striking ‘‘2010’’ and in-
serting ‘‘2014’’; and 
(B) in subparagraph (B)— 
(i) in clause (i), by striking ‘‘and’’ at 
the end; 
(ii) in clause (ii), by striking the pe-
riod at the end and inserting a semicolon; 
and 
(iii) by adding at the end the fol-
lowing new clauses: 
‘‘(iii) for 2011, 1.0 percent; and 
‘‘(iv) for 2012, 2013, and 2014, 0.5 
percent.’’; 
(2) in paragraph (3)— 
(A) in subparagraph (A), in the matter 
preceding clause (i), by inserting ‘‘(or, for pur-
poses of subsection (a)(8), for the quality re-
porting period for the year)’’ after ‘‘reporting 
period’’; and 
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•AMDT. NO. 2786 
(B) in subparagraph (C)(i), by inserting ‘‘, 
or, for purposes of subsection (a)(8), for a qual-
ity reporting period for the year’’ after ‘‘(a)(5), 
for a reporting period for a year’’; 
(3) in paragraph (5)(E)(iv), by striking ‘‘sub-
section (a)(5)(A)’’ and inserting ‘‘paragraphs (5)(A) 
and (8)(A) of subsection (a)’’; and 
(4) in paragraph (6)(C)— 
(A) in clause (i)(II), by striking ‘‘, 2009, 
2010, and 2011’’ and inserting ‘‘and subse-
quent years’’; and 
(B) in clause (iii)— 
(i) 
by 
inserting 
‘‘(a)(8)’’ 
after 
‘‘(a)(5)’’; and 
(ii) by striking ‘‘under subparagraph 
(D)(iii) of such subsection’’ and inserting 
‘‘under subsection (a)(5)(D)(iii) or the 
quality reporting period under subsection 
(a)(8)(D)(iii), respectively’’. 
(b) INCENTIVE PAYMENT ADJUSTMENT FOR QUAL-
ITY REPORTING.—Section 1848(a) of the Social Security 
Act (42 U.S.C. 1395w–4(a)) is amended by adding at the 
end the following new paragraph: 
‘‘(8) INCENTIVES FOR QUALITY REPORTING.— 
‘‘(A) ADJUSTMENT.— 
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•AMDT. NO. 2786 
‘‘(i) IN
GENERAL.—With respect to 
covered professional services furnished by 
an eligible professional during 2015 or any 
subsequent year, if the eligible professional 
does not satisfactorily submit data on qual-
ity measures for covered professional serv-
ices for the quality reporting period for the 
year (as determined under subsection 
(m)(3)(A)), the fee schedule amount for 
such services furnished by such profes-
sional during the year (including the fee 
schedule amount for purposes of deter-
mining a payment based on such amount) 
shall be equal to the applicable percent of 
the fee schedule amount that would other-
wise apply to such services under this sub-
section (determined after application of 
paragraphs (3), (5), and (7), but without 
regard to this paragraph). 
‘‘(ii) 
APPLICABLE
PERCENT.—For 
purposes of clause (i), the term ‘applicable 
percent’ means— 
‘‘(I) for 2015, 98.5 percent; and 
‘‘(II) for 2016 and each subse-
quent year, 98 percent. 
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•AMDT. NO. 2786 
‘‘(B) APPLICATION.— 
‘‘(i) PHYSICIAN
REPORTING
SYSTEM 
RULES.—Paragraphs (5), (6), and (8) of 
subsection (k) shall apply for purposes of 
this paragraph in the same manner as they 
apply for purposes of such subsection. 
‘‘(ii) INCENTIVE
PAYMENT
VALIDA-
TION RULES.—Clauses (ii) and (iii) of sub-
section (m)(5)(D) shall apply for purposes 
of this paragraph in a similar manner as 
they apply for purposes of such subsection. 
‘‘(C) DEFINITIONS.—For purposes of this 
paragraph: 
‘‘(i) ELIGIBLE
PROFESSIONAL; COV-
ERED
PROFESSIONAL
SERVICES.—The 
terms ‘eligible professional’ and ‘covered 
professional services’ have the meanings 
given such terms in subsection (k)(3). 
‘‘(ii) 
PHYSICIAN
REPORTING
SYS-
TEM.—The term ‘physician reporting sys-
tem’ means the system established under 
subsection (k). 
‘‘(iii) QUALITY REPORTING PERIOD.— 
The term ‘quality reporting period’ means, 
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•AMDT. NO. 2786 
with respect to a year, a period specified 
by the Secretary.’’. 
(c) MAINTENANCE OF CERTIFICATION PROGRAMS.— 
(1) IN GENERAL.—Section 1848(k)(4) of the 
Social Security Act (42 U.S.C. 1395w–4(k)(4)) is 
amended by inserting ‘‘or through a Maintenance of 
Certification program operated by a specialty body 
of the American Board of Medical Specialties that 
meets the criteria for such a registry’’ after ‘‘Data-
base)’’. 
(2) EFFECTIVE DATE.—The amendment made 
by paragraph (1) shall apply for years after 2010. 
(d) INTEGRATION OF PHYSICIAN QUALITY REPORT-
ING AND EHR REPORTING.—Section 1848(m) of the So-
cial Security Act (42 U.S.C. 1395w–4(m)) is amended by 
adding at the end the following new paragraph: 
‘‘(7) INTEGRATION OF PHYSICIAN QUALITY RE-
PORTING
AND
EHR
REPORTING.—Not later than 
January 1, 2012, the Secretary shall develop a plan 
to integrate reporting on quality measures under 
this subsection with reporting requirements under 
subsection (o) relating to the meaningful use of elec-
tronic health records. Such integration shall consist 
of the following: 
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•AMDT. NO. 2786 
‘‘(A) The selection of measures, the report-
ing of which would both demonstrate— 
‘‘(i) meaningful use of an electronic 
health record for purposes of subsection 
(o); and 
‘‘(ii) quality of care furnished to an 
individual. 
‘‘(B) Such other activities as specified by 
the Secretary.’’. 
(e) FEEDBACK.—Section 1848(m)(5) of the Social 
Security Act (42 U.S.C. 1395w–4(m)(5)) is amended by 
adding at the end the following new subparagraph: 
‘‘(H) FEEDBACK.—The Secretary shall 
provide timely feedback to eligible professionals 
on the performance of the eligible professional 
with respect to satisfactorily submitting data on 
quality measures under this subsection.’’. 
(f) APPEALS.—Such section is further amended— 
(1) in subparagraph (E), by striking ‘‘There 
shall’’ and inserting ‘‘Except as provided in subpara-
graph (I), there shall’’; and 
(2) by adding at the end the following new sub-
paragraph: 
‘‘(I) INFORMAL
APPEALS
PROCESS.—The 
Secretary shall, by not later than January 1, 
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•AMDT. NO. 2786 
2011, establish and have in place an informal 
process for eligible professionals to seek a re-
view of the determination that an eligible pro-
fessional did not satisfactorily submit data on 
quality measures under this subsection.’’. 
SEC. 3003. IMPROVEMENTS TO THE PHYSICIAN FEEDBACK 
PROGRAM. 
(a) IN GENERAL.—Section 1848(n) of the Social Se-
curity Act (42 U.S.C. 1395w–4(n)) is amended— 
(1) in paragraph (1)— 
(A) in subparagraph (A)— 
(i) by striking ‘‘GENERAL.—The Sec-
retary’’ and inserting ‘‘GENERAL.— 
‘‘(i) 
ESTABLISHMENT.—The 
Sec-
retary’’; 
(ii) in clause (i), as added by clause 
(i), by striking ‘‘the ‘Program’)’’ and all 
that follows through the period at the end 
of the second sentence and inserting ‘‘the 
‘Program’).’’; and 
(iii) by adding at the end the fol-
lowing new clauses: 
‘‘(ii) REPORTS ON RESOURCES.—The 
Secretary shall use claims data under this 
title (and may use other data) to provide 
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•AMDT. NO. 2786 
confidential reports to physicians (and, as 
determined appropriate by the Secretary, 
to groups of physicians) that measure the 
resources involved in furnishing care to in-
dividuals under this title. 
‘‘(iii) INCLUSION OF CERTAIN INFOR-
MATION.—If determined appropriate by 
the Secretary, the Secretary may include 
information on the quality of care fur-
nished to individuals under this title by the 
physician (or group of physicians) in such 
reports.’’; and 
(B) in subparagraph (B), by striking ‘‘sub-
paragraph (A)’’ and inserting ‘‘subparagraph 
(A)(ii)’’; 
(2) in paragraph (4)— 
(A) in the heading, by inserting ‘‘INITIAL’’ 
after ‘‘FOCUS’’; and 
(B) in the matter preceding subparagraph 
(A), by inserting ‘‘initial’’ after ‘‘focus the’’; 
(3) in paragraph (6), by adding at the end the 
following new sentence: ‘‘For adjustments for re-
ports on utilization under paragraph (9), see sub-
paragraph (D) of such paragraph.’’; and 
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•AMDT. NO. 2786 
(4) by adding at the end the following new 
paragraphs: 
‘‘(9) REPORTS ON UTILIZATION.— 
‘‘(A) DEVELOPMENT OF EPISODE GROUP-
ER.— 
‘‘(i) IN
GENERAL.—The Secretary 
shall develop an episode grouper that com-
bines separate but clinically related items 
and services into an episode of care for an 
individual, as appropriate. 
‘‘(ii) 
TIMELINE
FOR
DEVELOP-
MENT.—The episode grouper described in 
subparagraph (A) shall be developed by not 
later than January 1, 2012. 
‘‘(iii) 
PUBLIC
AVAILABILITY.—The 
Secretary shall make the details of the epi-
sode grouper described in subparagraph 
(A) available to the public. 
‘‘(iv) ENDORSEMENT.—The Secretary 
shall seek endorsement of the episode 
grouper described in subparagraph (A) by 
the entity with a contract under section 
1890(a). 
‘‘(B) REPORTS
ON
UTILIZATION.—Effec-
tive beginning with 2012, the Secretary shall 
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•AMDT. NO. 2786 
provide reports to physicians that compare, as 
determined appropriate by the Secretary, pat-
terns of resource use of the individual physician 
to such patterns of other physicians. 
‘‘(C) ANALYSIS OF DATA.—The Secretary 
shall, for purposes of preparing reports under 
this paragraph, establish methodologies as ap-
propriate, such as to— 
‘‘(i) attribute episodes of care, in 
whole or in part, to physicians; 
‘‘(ii) identify appropriate physicians 
for purposes of comparison under subpara-
graph (B); and 
‘‘(iii) aggregate episodes of care at-
tributed to a physician under clause (i) 
into a composite measure per individual. 
‘‘(D) DATA
ADJUSTMENT.—In preparing 
reports under this paragraph, the Secretary 
shall make appropriate adjustments, including 
adjustments— 
‘‘(i) to account for differences in so-
cioeconomic and demographic characteris-
tics, ethnicity, and health status of individ-
uals (such as to recognize that less healthy 
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•AMDT. NO. 2786 
individuals may require more intensive 
interventions); and 
‘‘(ii) to eliminate the effect of geo-
graphic adjustments in payment rates (as 
described in subsection (e)). 
‘‘(E) PUBLIC AVAILABILITY OF METHOD-
OLOGY.—The Secretary shall make available to 
the public— 
‘‘(i) the methodologies established 
under subparagraph (C); 
‘‘(ii) information regarding any ad-
justments made to data under subpara-
graph (D); and 
‘‘(iii) aggregate reports with respect 
to physicians. 
‘‘(F) DEFINITION OF PHYSICIAN.—In this 
paragraph: 
‘‘(i) IN GENERAL.—The term ‘physi-
cian’ has the meaning given that term in 
section 1861(r)(1). 
‘‘(ii) TREATMENT OF GROUPS.—Such 
term includes, as the Secretary determines 
appropriate, a group of physicians. 
‘‘(G) LIMITATIONS
ON
REVIEW.—There 
shall be no administrative or judicial review 
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•AMDT. NO. 2786 
under section 1869, section 1878, or otherwise 
of the establishment of the methodology under 
subparagraph (C), including the determination 
of an episode of care under such methodology. 
‘‘(10) COORDINATION
WITH
OTHER
VALUE- 
BASED PURCHASING REFORMS.—The Secretary shall 
coordinate the Program with the value-based pay-
ment modifier established under subsection (p) and, 
as the Secretary determines appropriate, other simi-
lar provisions of this title.’’. 
(b) CONFORMING AMENDMENT.—Section 1890(b) of 
the Social Security Act (42 U.S.C. 1395aaa(b)) is amend-
ed by adding at the end the following new paragraph: 
‘‘(6) REVIEW AND ENDORSEMENT OF EPISODE 
GROUPER UNDER THE PHYSICIAN FEEDBACK PRO-
GRAM.—The entity shall provide for the review and, 
as appropriate, the endorsement of the episode 
grouper developed by the Secretary under section 
1848(n)(9)(A). Such review shall be conducted on an 
expedited basis.’’. 
SEC. 3004. QUALITY REPORTING FOR LONG-TERM CARE 
HOSPITALS, 
INPATIENT 
REHABILITATION 
HOSPITALS, AND HOSPICE PROGRAMS. 
(a) 
LONG-TERM
CARE
HOSPITALS.—Section 
1886(m) of the Social Security Act (42 U.S.C. 
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•AMDT. NO. 2786 
1395ww(m)), as amended by section 3401(c), is amended 
by adding at the end the following new paragraph: 
‘‘(5) QUALITY REPORTING.— 
‘‘(A) REDUCTION IN UPDATE FOR FAILURE 
TO REPORT.— 
‘‘(i) IN GENERAL.—Under the system 
described in paragraph (1), for rate year 
2014 and each subsequent rate year, in the 
case of a long-term care hospital that does 
not submit data to the Secretary in accord-
ance with subparagraph (C) with respect 
to such a rate year, any annual update to 
a standard Federal rate for discharges for 
the hospital during the rate year, and after 
application of paragraph (3), shall be re-
duced by 2 percentage points. 
‘‘(ii) SPECIAL RULE.—The application 
of this subparagraph may result in such 
annual update being less than 0.0 for a 
rate year, and may result in payment rates 
under the system described in paragraph 
(1) for a rate year being less than such 
payment rates for the preceding rate year. 
‘‘(B) 
NONCUMULATIVE
APPLICATION.— 
Any reduction under subparagraph (A) shall 
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•AMDT. NO. 2786 
apply only with respect to the rate year involved 
and the Secretary shall not take into account 
such reduction in computing the payment 
amount under the system described in para-
graph (1) for a subsequent rate year. 
‘‘(C) SUBMISSION OF QUALITY DATA.—For 
rate year 2014 and each subsequent rate year, 
each long-term care hospital shall submit to the 
Secretary data on quality measures specified 
under subparagraph (D). Such data shall be 
submitted in a form and manner, and at a time, 
specified by the Secretary for purposes of this 
subparagraph. 
‘‘(D) QUALITY MEASURES.— 
‘‘(i) IN GENERAL.—Subject to clause 
(ii), any measure specified by the Secretary 
under this subparagraph must have been 
endorsed by the entity with a contract 
under section 1890(a). 
‘‘(ii) EXCEPTION.—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), the Secretary may 
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•AMDT. NO. 2786 
specify a measure that is not so endorsed 
as long as due consideration is given to 
measures that have been endorsed or 
adopted by a consensus organization iden-
tified by the Secretary. 
‘‘(iii) TIME FRAME.—Not later than 
October 1, 2012, the Secretary shall pub-
lish the measures selected under this sub-
paragraph that will be applicable with re-
spect to rate year 2014. 
‘‘(E) PUBLIC AVAILABILITY OF DATA SUB-
MITTED.—The Secretary shall establish proce-
dures for making data submitted under sub-
paragraph (C) available to the public. Such pro-
cedures shall ensure that a long-term care hos-
pital has the opportunity to review the data 
that is to be made public with respect to the 
hospital prior to such data being made public. 
The Secretary shall report quality measures 
that relate to services furnished in inpatient 
settings in long-term care hospitals on the 
Internet website of the Centers for Medicare & 
Medicaid Services.’’. 
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•AMDT. NO. 2786 
(b) INPATIENT REHABILITATION HOSPITALS.—Sec-
tion 1886(j) of the Social Security Act (42 U.S.C. 
1395ww(j)) is amended— 
(1) by redesignating paragraph (7) as para-
graph (8); and 
(2) by inserting after paragraph (6) the fol-
lowing new paragraph: 
‘‘(7) QUALITY REPORTING.— 
‘‘(A) REDUCTION IN UPDATE FOR FAILURE 
TO REPORT.— 
‘‘(i) IN
GENERAL.—For purposes of 
fiscal year 2014 and each subsequent fiscal 
year, in the case of a rehabilitation facility 
that does not submit data to the Secretary 
in accordance with subparagraph (C) with 
respect to such a fiscal year, after deter-
mining the increase factor described in 
paragraph (3)(C), and after application of 
paragraph (3)(D), the Secretary shall re-
duce such increase factor for payments for 
discharges occurring during such fiscal 
year by 2 percentage points. 
‘‘(ii) SPECIAL RULE.—The application 
of this subparagraph may result in the in-
crease factor described in paragraph (3)(C) 
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•AMDT. NO. 2786 
being less than 0.0 for a fiscal year, and 
may result in payment rates under this 
subsection for a fiscal year being less than 
such payment rates for the preceding fiscal 
year. 
‘‘(B) 
NONCUMULATIVE
APPLICATION.— 
Any reduction under subparagraph (A) shall 
apply only with respect to the fiscal year in-
volved and the Secretary shall not take into ac-
count such reduction in computing the payment 
amount under this subsection for a subsequent 
fiscal year. 
‘‘(C) SUBMISSION OF QUALITY DATA.—For 
fiscal year 2014 and each subsequent rate year, 
each rehabilitation facility shall submit to the 
Secretary data on quality measures specified 
under subparagraph (D). Such data shall be 
submitted in a form and manner, and at a time, 
specified by the Secretary for purposes of this 
subparagraph. 
‘‘(D) QUALITY MEASURES.— 
‘‘(i) IN GENERAL.—Subject to clause 
(ii), any measure specified by the Secretary 
under this subparagraph must have been 
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•AMDT. NO. 2786 
endorsed by the entity with a contract 
under section 1890(a). 
‘‘(ii) EXCEPTION.—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), the Secretary may 
specify a measure that is not so endorsed 
as long as due consideration is given to 
measures that have been endorsed or 
adopted by a consensus organization iden-
tified by the Secretary. 
‘‘(iii) TIME FRAME.—Not later than 
October 1, 2012, the Secretary shall pub-
lish the measures selected under this sub-
paragraph that will be applicable with re-
spect to fiscal year 2014. 
‘‘(E) PUBLIC AVAILABILITY OF DATA SUB-
MITTED.—The Secretary shall establish proce-
dures for making data submitted under sub-
paragraph (C) available to the public. Such pro-
cedures shall ensure that a rehabilitation facil-
ity has the opportunity to review the data that 
is to be made public with respect to the facility 
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•AMDT. NO. 2786 
prior to such data being made public. The Sec-
retary shall report quality measures that relate 
to services furnished in inpatient settings in re-
habilitation facilities on the Internet website of 
the Centers for Medicare & Medicaid Services.’’. 
(c) HOSPICE PROGRAMS.—Section 1814(i) of the So-
cial Security Act (42 U.S.C. 1395f(i)) is amended— 
(1) by redesignating paragraph (5) as para-
graph (6); and 
(2) by inserting after paragraph (4) the fol-
lowing new paragraph: 
‘‘(5) QUALITY REPORTING.— 
‘‘(A) REDUCTION IN UPDATE FOR FAILURE 
TO REPORT.— 
‘‘(i) IN
GENERAL.—For purposes of 
fiscal year 2014 and each subsequent fiscal 
year, in the case of a hospice program that 
does not submit data to the Secretary in 
accordance with subparagraph (C) with re-
spect to such a fiscal year, after deter-
mining the market basket percentage in-
crease under paragraph (1)(C)(ii)(VII) or 
paragraph (1)(C)(iii), as applicable, and 
after application of paragraph (1)(C)(iv), 
with respect to the fiscal year, the Sec-
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•AMDT. NO. 2786 
retary shall reduce such market basket 
percentage increase by 2 percentage points. 
‘‘(ii) SPECIAL RULE.—The application 
of this subparagraph may result in the 
market basket percentage increase under 
paragraph (1)(C)(ii)(VII) or paragraph 
(1)(C)(iii), as applicable, being less than 
0.0 for a fiscal year, and may result in 
payment rates under this subsection for a 
fiscal year being less than such payment 
rates for the preceding fiscal year. 
‘‘(B) 
NONCUMULATIVE
APPLICATION.— 
Any reduction under subparagraph (A) shall 
apply only with respect to the fiscal year in-
volved and the Secretary shall not take into ac-
count such reduction in computing the payment 
amount under this subsection for a subsequent 
fiscal year. 
‘‘(C) SUBMISSION OF QUALITY DATA.—For 
fiscal year 2014 and each subsequent fiscal 
year, each hospice program shall submit to the 
Secretary data on quality measures specified 
under subparagraph (D). Such data shall be 
submitted in a form and manner, and at a time, 
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•AMDT. NO. 2786 
specified by the Secretary for purposes of this 
subparagraph. 
‘‘(D) QUALITY MEASURES.— 
‘‘(i) IN GENERAL.—Subject to clause 
(ii), any measure specified by the Secretary 
under this subparagraph must have been 
endorsed by the entity with a contract 
under section 1890(a). 
‘‘(ii) EXCEPTION.—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), the Secretary may 
specify a measure that is not so endorsed 
as long as due consideration is given to 
measures that have been endorsed or 
adopted by a consensus organization iden-
tified by the Secretary. 
‘‘(iii) TIME FRAME.—Not later than 
October 1, 2012, the Secretary shall pub-
lish the measures selected under this sub-
paragraph that will be applicable with re-
spect to fiscal year 2014. 
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•AMDT. NO. 2786 
‘‘(E) PUBLIC AVAILABILITY OF DATA SUB-
MITTED.—The Secretary shall establish proce-
dures for making data submitted under sub-
paragraph (C) available to the public. Such pro-
cedures shall ensure that a hospice program has 
the opportunity to review the data that is to be 
made public with respect to the hospice pro-
gram prior to such data being made public. The 
Secretary shall report quality measures that re-
late to hospice care provided by hospice pro-
grams on the Internet website of the Centers 
for Medicare & Medicaid Services.’’. 
SEC. 3005. QUALITY REPORTING FOR PPS-EXEMPT CANCER 
HOSPITALS. 
Section 1866 of the Social Security Act (42 U.S.C. 
1395cc) is amended— 
(1) in subsection (a)(1)— 
(A) in subparagraph (U), by striking 
‘‘and’’ at the end; 
(B) in subparagraph (V), by striking the 
period at the end and inserting ‘‘, and’’; and 
(C) by adding at the end the following new 
subparagraph: 
‘‘(W) in the case of a hospital described in 
section 1886(d)(1)(B)(v), to report quality data 
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•AMDT. NO. 2786 
to the Secretary in accordance with subsection 
(k).’’; and 
(2) by adding at the end the following new sub-
section: 
‘‘(k) QUALITY
REPORTING
BY
CANCER
HOS-
PITALS.— 
‘‘(1) IN GENERAL.—For purposes of fiscal year 
2014 and each subsequent fiscal year, a hospital de-
scribed in section 1886(d)(1)(B)(v) shall submit 
data to the Secretary in accordance with paragraph 
(2) with respect to such a fiscal year. 
‘‘(2) SUBMISSION OF QUALITY DATA.—For fis-
cal year 2014 and each subsequent fiscal year, each 
hospital described in such section shall submit to the 
Secretary data on quality measures specified under 
paragraph (3). Such data shall be submitted in a 
form and manner, and at a time, specified by the 
Secretary for purposes of this subparagraph. 
‘‘(3) QUALITY MEASURES.— 
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), any measure specified by the Sec-
retary under this paragraph must have been en-
dorsed by the entity with a contract under sec-
tion 1890(a). 
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•AMDT. NO. 2786 
‘‘(B) EXCEPTION.—In the case of a speci-
fied area or medical topic determined appro-
priate by the Secretary for which a feasible and 
practical measure has not been endorsed by the 
entity with a contract under section 1890(a), 
the Secretary may specify a measure that is not 
so endorsed as long as due consideration is 
given to measures that have been endorsed or 
adopted by a consensus organization identified 
by the Secretary. 
‘‘(C) TIME FRAME.—Not later than Octo-
ber 1, 2012, the Secretary shall publish the 
measures selected under this paragraph that 
will be applicable with respect to fiscal year 
2014. 
‘‘(4) PUBLIC
AVAILABILITY
OF
DATA
SUB-
MITTED.—The Secretary shall establish procedures 
for making data submitted under paragraph (4) 
available to the public. Such procedures shall ensure 
that a hospital described in section 1886(d)(1)(B)(v) 
has the opportunity to review the data that is to be 
made public with respect to the hospital prior to 
such data being made public. The Secretary shall re-
port quality measures of process, structure, outcome, 
patients’ perspective on care, efficiency, and costs of 
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•AMDT. NO. 2786 
care that relate to services furnished in such hos-
pitals on the Internet website of the Centers for 
Medicare & Medicaid Services.’’. 
SEC. 3006. PLANS FOR A VALUE-BASED PURCHASING PRO-
GRAM FOR SKILLED NURSING FACILITIES 
AND HOME HEALTH AGENCIES. 
(a) SKILLED NURSING FACILITIES.— 
(1) IN GENERAL.—The Secretary of Health and 
Human Services (in this section referred to as the 
‘‘Secretary’’) shall develop a plan to implement a 
value-based purchasing program for payments under 
the Medicare program under title XVIII of the So-
cial Security Act for skilled nursing facilities (as de-
fined in section 1819(a) of such Act (42 U.S.C. 
1395i–3(a))). 
(2) DETAILS.—In developing the plan under 
paragraph (1), the Secretary shall consider the fol-
lowing issues: 
(A) The ongoing development, selection, 
and modification process for measures (includ-
ing under section 1890 of the Social Security 
Act (42 U.S.C. 1395aaa) and section 1890A 
such Act, as added by section 3014), to the ex-
tent feasible and practicable, of all dimensions 
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•AMDT. NO. 2786 
of quality and efficiency in skilled nursing fa-
cilities. 
(i) IN
GENERAL.—Subject to clause 
(ii), any measure specified by the Secretary 
under subparagraph (A)(iii) must have 
been endorsed by the entity with a contract 
under section 1890(a). 
(ii) EXCEPTION.—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), the Secretary may 
specify a measure that is not so endorsed 
as long as due consideration is given to 
measures that have been endorsed or 
adopted by a consensus organization iden-
tified by the Secretary. 
(B) The reporting, collection, and valida-
tion of quality data. 
(C) The structure of value-based payment 
adjustments, including the determination of 
thresholds or improvements in quality that 
would substantiate a payment adjustment, the 
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•AMDT. NO. 2786 
size of such payments, and the sources of fund-
ing for the value-based bonus payments. 
(D) Methods for the public disclosure of 
information on the performance of skilled nurs-
ing facilities. 
(E) Any other issues determined appro-
priate by the Secretary. 
(3) CONSULTATION.—In developing the plan 
under paragraph (1), the Secretary shall— 
(A) consult with relevant affected parties; 
and 
(B) consider experience with such dem-
onstrations that the Secretary determines are 
relevant to the value-based purchasing program 
described in paragraph (1). 
(4) REPORT TO CONGRESS.—Not later than Oc-
tober 1, 2011, the Secretary shall submit to Con-
gress a report containing the plan developed under 
paragraph (1). 
(b) HOME HEALTH AGENCIES.— 
(1) IN GENERAL.—The Secretary of Health and 
Human Services (in this section referred to as the 
‘‘Secretary’’) shall develop a plan to implement a 
value-based purchasing program for payments under 
the Medicare program under title XVIII of the So-
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•AMDT. NO. 2786 
cial Security Act for home health agencies (as de-
fined in section 1861(o) of such Act (42 U.S.C. 
1395x(o))). 
(2) DETAILS.—In developing the plan under 
paragraph (1), the Secretary shall consider the fol-
lowing issues: 
(A) The ongoing development, selection, 
and modification process for measures (includ-
ing under section 1890 of the Social Security 
Act (42 U.S.C. 1395aaa) and section 1890A 
such Act, as added by section 3014), to the ex-
tent feasible and practicable, of all dimensions 
of quality and efficiency in home health agen-
cies. 
(B) The reporting, collection, and valida-
tion of quality data. 
(C) The structure of value-based payment 
adjustments, including the determination of 
thresholds or improvements in quality that 
would substantiate a payment adjustment, the 
size of such payments, and the sources of fund-
ing for the value-based bonus payments. 
(D) Methods for the public disclosure of 
information on the performance of home health 
agencies. 
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•AMDT. NO. 2786 
(E) Any other issues determined appro-
priate by the Secretary. 
(3) CONSULTATION.—In developing the plan 
under paragraph (1), the Secretary shall— 
(A) consult with relevant affected parties; 
and 
(B) consider experience with such dem-
onstrations that the Secretary determines are 
relevant to the value-based purchasing program 
described in paragraph (1). 
(4) REPORT TO CONGRESS.—Not later than Oc-
tober 1, 2011, the Secretary shall submit to Con-
gress a report containing the plan developed under 
paragraph (1). 
SEC. 3007. VALUE-BASED PAYMENT MODIFIER UNDER THE 
PHYSICIAN FEE SCHEDULE. 
Section 1848 of the Social Security Act (42 U.S.C. 
1395w–4) is amended— 
(1) in subsection (b)(1), by inserting ‘‘subject 
to subsection (p),’’ after ‘‘1998,’’; and 
(2) by adding at the end the following new sub-
section: 
‘‘(p) ESTABLISHMENT OF VALUE-BASED PAYMENT 
MODIFIER.— 
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•AMDT. NO. 2786 
‘‘(1) IN GENERAL.—The Secretary shall estab-
lish a payment modifier that provides for differential 
payment to a physician or a group of physicians 
under the fee schedule established under subsection 
(b) based upon the quality of care furnished com-
pared to cost (as determined under paragraphs (2) 
and (3), respectively) during a performance period. 
Such payment modifier shall be separate from the 
geographic adjustment factors established under 
subsection (e). 
‘‘(2) QUALITY.— 
‘‘(A) IN GENERAL.—For purposes of para-
graph (1), quality of care shall be evaluated, to 
the extent practicable, based on a composite of 
measures of the quality of care furnished (as 
established by the Secretary under subpara-
graph (B)). 
‘‘(B) MEASURES.— 
‘‘(i) The Secretary shall establish ap-
propriate measures of the quality of care 
furnished by a physician or group of physi-
cians to individuals enrolled under this 
part, such as measures that reflect health 
outcomes. Such measures shall be risk ad-
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•AMDT. NO. 2786 
justed as determined appropriate by the 
Secretary. 
‘‘(ii) The Secretary shall seek endorse-
ment of the measures established under 
this subparagraph by the entity with a 
contract under section 1890(a). 
‘‘(3) COSTS.—For purposes of paragraph (1), 
costs shall be evaluated, to the extent practicable, 
based on a composite of appropriate measures of 
costs established by the Secretary (such as the com-
posite measure under the methodology established 
under subsection (n)(9)(C)(iii)) that eliminate the 
effect of geographic adjustments in payment rates 
(as described in subsection (e)), and take into ac-
count risk factors (such as socioeconomic and demo-
graphic characteristics, ethnicity, and health status 
of individuals (such as to recognize that less healthy 
individuals may require more intensive interventions) 
and other factors determined appropriate by the 
Secretary. 
‘‘(4) IMPLEMENTATION.— 
‘‘(A) PUBLICATION OF MEASURES, DATES 
OF
IMPLEMENTATION, 
PERFORMANCE
PE-
RIOD.—Not later than January 1, 2012, the 
Secretary shall publish the following: 
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•AMDT. NO. 2786 
‘‘(i) The measures of quality of care 
and costs established under paragraphs (2) 
and (3), respectively. 
‘‘(ii) The dates for implementation of 
the payment modifier (as determined under 
subparagraph (B)). 
‘‘(iii) The initial performance period 
(as specified under subparagraph (B)(ii)). 
‘‘(B) 
DEADLINES
FOR
IMPLEMENTA-
TION.— 
‘‘(i) INITIAL IMPLEMENTATION.—Sub-
ject to the preceding provisions of this sub-
paragraph, the Secretary shall begin imple-
menting the payment modifier established 
under this subsection through the rule-
making process during 2013 for the physi-
cian fee schedule established under sub-
section (b). 
‘‘(ii) 
INITIAL
PERFORMANCE
PE-
RIOD.— 
‘‘(I) IN
GENERAL.—The Sec-
retary shall specify an initial perform-
ance period for application of the pay-
ment modifier established under this 
subsection with respect to 2015. 
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•AMDT. NO. 2786 
‘‘(II) PROVISION
OF
INFORMA-
TION DURING INITIAL PERFORMANCE 
PERIOD.—During the initial perform-
ance period, the Secretary shall, to 
the extent practicable, provide infor-
mation to physicians and groups of 
physicians about the quality of care 
furnished by the physician or group of 
physicians 
to 
individuals 
enrolled 
under this part compared to cost (as 
determined under paragraphs (2) and 
(3), respectively) with respect to the 
performance period. 
‘‘(iii) APPLICATION.—The Secretary 
shall apply the payment modifier estab-
lished under this subsection for items and 
services furnished— 
‘‘(I) beginning on January 1, 
2015, with respect to specific physi-
cians and groups of physicians the 
Secretary determines appropriate; and 
‘‘(II) beginning not later than 
January 1, 2017, with respect to all 
physicians and groups of physicians. 
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•AMDT. NO. 2786 
‘‘(C) BUDGET
NEUTRALITY.—The pay-
ment modifier established under this subsection 
shall be implemented in a budget neutral man-
ner. 
‘‘(5) SYSTEMS-BASED
CARE.—The Secretary 
shall, as appropriate, apply the payment modifier es-
tablished under this subsection in a manner that 
promotes systems-based care. 
‘‘(6) 
CONSIDERATION
OF
SPECIAL
CIR-
CUMSTANCES OF CERTAIN PROVIDERS.—In applying 
the payment modifier under this subsection, the Sec-
retary shall, as appropriate, take into account the 
special circumstances of physicians or groups of phy-
sicians in rural areas and other underserved commu-
nities. 
‘‘(7) APPLICATION.—For purposes of the initial 
application of the payment modifier established 
under this subsection during the period beginning on 
January 1, 2015, and ending on December 31, 
2016, the term ‘physician’ has the meaning given 
such term in section 1861(r). On or after January 
1, 2017, the Secretary may apply this subsection to 
eligible professionals (as defined in subsection 
(k)(3)(B)) as the Secretary determines appropriate. 
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•AMDT. NO. 2786 
‘‘(8) DEFINITIONS.—For purposes of this sub-
section: 
‘‘(A) COSTS.—The term ‘costs’ means ex-
penditures per individual as determined appro-
priate by the Secretary. In making the deter-
mination under the preceding sentence, the Sec-
retary may take into account the amount of 
growth in expenditures per individual for a phy-
sician compared to the amount of such growth 
for other physicians. 
‘‘(B) PERFORMANCE
PERIOD.—The term 
‘performance period’ means a period specified 
by the Secretary. 
‘‘(9) COORDINATION
WITH
OTHER
VALUE- 
BASED PURCHASING REFORMS.—The Secretary shall 
coordinate the value-based payment modifier estab-
lished under this subsection with the Physician 
Feedback Program under subsection (n) and, as the 
Secretary determines appropriate, other similar pro-
visions of this title. 
‘‘(10) LIMITATIONS ON REVIEW.—There shall 
be no administrative or judicial review under section 
1869, section 1878, or otherwise of— 
‘‘(A) the establishment of the value-based 
payment modifier under this subsection; 
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•AMDT. NO. 2786 
‘‘(1) IN GENERAL.—In order to provide an in-
centive for applicable hospitals to reduce hospital ac-
quired conditions under this title, with respect to 
discharges from an applicable hospital occurring 
during fiscal year 2015 or a subsequent fiscal year, 
the amount of payment under this section or section 
1814(b)(3), as applicable, for such discharges during 
the fiscal year shall be equal to 99 percent of the 
amount of payment that would otherwise apply to 
such discharges under this section or section 
1814(b)(3) (determined after the application of sub-
sections (o) and (q) and section 1814(l)(4) but with-
out regard to this subsection). 
‘‘(2) APPLICABLE HOSPITALS.— 
‘‘(A) IN GENERAL.—For purposes of this 
subsection, the term ‘applicable hospital’ means 
a subsection (d) hospital that meets the criteria 
described in subparagraph (B). 
‘‘(B) CRITERIA DESCRIBED.— 
‘‘(i) IN
GENERAL.—The criteria de-
scribed in this subparagraph, with respect 
to a subsection (d) hospital, is that the 
subsection (d) hospital is in the top quar-
tile of all subsection (d) hospitals, relative 
to the national average, of hospital ac-
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•AMDT. NO. 2786 
quired conditions during the applicable pe-
riod, as determined by the Secretary. 
‘‘(ii) RISK ADJUSTMENT.—In carrying 
out clause (i), the Secretary shall establish 
and apply an appropriate risk adjustment 
methodology. 
‘‘(C) EXEMPTION.—In the case of a hos-
pital that is paid under section 1814(b)(3), the 
Secretary may exempt such hospital from the 
application of this subsection if the State which 
is paid under such section submits an annual 
report to the Secretary describing how a similar 
program in the State for a participating hos-
pital or hospitals achieves or surpasses the 
measured results in terms of patient health out-
comes and cost savings established under this 
subsection. 
‘‘(3) HOSPITAL
ACQUIRED
CONDITIONS.—For 
purposes of this subsection, the term ‘hospital ac-
quired condition’ means a condition identified for 
purposes of subsection (d)(4)(D)(iv) and any other 
condition determined appropriate by the Secretary 
that an individual acquires during a stay in an ap-
plicable hospital, as determined by the Secretary. 
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•AMDT. NO. 2786 
‘‘(4) APPLICABLE PERIOD.—In this subsection, 
the term ‘applicable period’ means, with respect to 
a fiscal year, a period specified by the Secretary. 
‘‘(5) REPORTING TO HOSPITALS.—Prior to fis-
cal year 2015 and each subsequent fiscal year, the 
Secretary shall provide confidential reports to appli-
cable hospitals with respect to hospital acquired con-
ditions of the applicable hospital during the applica-
ble period. 
‘‘(6) REPORTING HOSPITAL SPECIFIC INFORMA-
TION.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
make information available to the public re-
garding hospital acquired conditions of each ap-
plicable hospital. 
‘‘(B) OPPORTUNITY TO REVIEW AND SUB-
MIT CORRECTIONS.—The Secretary shall ensure 
that an applicable hospital has the opportunity 
to review, and submit corrections for, the infor-
mation 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. 
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•AMDT. NO. 2786 
‘‘(7) LIMITATIONS ON REVIEW.—There shall be 
no administrative or judicial review under section 
1869, section 1878, or otherwise of the following: 
‘‘(A) The criteria described in paragraph 
(2)(A). 
‘‘(B) The specification of hospital acquired 
conditions under paragraph (3). 
‘‘(C) The specification of the applicable pe-
riod under paragraph (4). 
‘‘(D) The provision of reports to applicable 
hospitals under paragraph (5) and the informa-
tion made available to the public under para-
graph (6).’’. 
(b) STUDY
AND
REPORT
ON
EXPANSION
OF 
HEALTHCARE ACQUIRED CONDITIONS POLICY TO OTHER 
PROVIDERS.— 
(1) STUDY.—The Secretary of Health and 
Human Services shall conduct a study on expanding 
the healthcare acquired conditions policy under sub-
section (d)(4)(D) of section 1886 of the Social Secu-
rity Act (42 U.S.C. 1395ww) to payments made to 
other facilities under the Medicare program under 
title XVIII of the Social Security Act, including such 
payments made to inpatient rehabilitation facilities, 
long-term care hospitals (as described in sub-
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•AMDT. NO. 2786 
section(d)(1)(B)(iv) of such section), hospital out-
patient departments, and other hospitals excluded 
from the inpatient prospective payment system 
under such section, skilled nursing facilities, ambula-
tory surgical centers, and health clinics. Such study 
shall include an analysis of how such policies could 
impact quality of patient care, patient safety, and 
spending under the Medicare program. 
(2) REPORT.—Not later than January 1, 2012, 
the Secretary shall submit to Congress a report con-
taining the results of the study conducted under 
paragraph (1), together with recommendations for 
such legislation and administrative action as the 
Secretary determines appropriate. 
PART II—NATIONAL STRATEGY TO IMPROVE 
HEALTH CARE QUALITY 
SEC. 3011. NATIONAL STRATEGY. 
Title III of the Public Health Service Act (42 U.S.C. 
241 et seq.) is amended by adding at the end the fol-
lowing: 
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•AMDT. NO. 2786 
‘‘PART S—HEALTH CARE QUALITY PROGRAMS 
‘‘Subpart I—National Strategy for Quality 
Improvement in Health Care 
‘‘SEC. 399HH. NATIONAL STRATEGY FOR QUALITY IM-
PROVEMENT IN HEALTH CARE. 
‘‘(a) ESTABLISHMENT OF NATIONAL STRATEGY AND 
PRIORITIES.— 
‘‘(1) NATIONAL
STRATEGY.—The Secretary, 
through a transparent collaborative process, shall es-
tablish a national strategy to improve the delivery of 
health care services, patient health outcomes, and 
population health. 
‘‘(2) IDENTIFICATION OF PRIORITIES.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
identify national priorities for improvement in 
developing the strategy under paragraph (1). 
‘‘(B) 
REQUIREMENTS.—The 
Secretary 
shall ensure that priorities identified under sub-
paragraph (A) will— 
‘‘(i) have the greatest potential for im-
proving the health outcomes, efficiency, 
and patient-centeredness of health care for 
all populations, including children and vul-
nerable populations; 
‘‘(ii) identify areas in the delivery of 
health care services that have the potential 
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•AMDT. NO. 2786 
for rapid improvement in the quality and 
efficiency of patient care; 
‘‘(iii) address gaps in quality, effi-
ciency, comparative effectiveness informa-
tion, and health outcomes measures and 
data aggregation techniques; 
‘‘(iv) improve Federal payment policy 
to emphasize quality and efficiency; 
‘‘(v) enhance the use of health care 
data to improve quality, efficiency, trans-
parency, and outcomes; 
‘‘(vi) address the health care provided 
to patients with high-cost chronic diseases; 
‘‘(vii) improve research and dissemi-
nation of strategies and best practices to 
improve patient safety and reduce medical 
errors, preventable admissions and re-
admissions, and health care-associated in-
fections; 
‘‘(viii) reduce health disparities across 
health disparity populations (as defined in 
section 485E) and geographic areas; and 
‘‘(ix) address other areas as deter-
mined appropriate by the Secretary. 
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•AMDT. NO. 2786 
‘‘(C) 
CONSIDERATIONS.—In 
identifying 
priorities under subparagraph (A), the Sec-
retary shall take into consideration the rec-
ommendations submitted by the entity with a 
contract under section 1890(a) of the Social Se-
curity Act and other stakeholders. 
‘‘(D) COORDINATION WITH STATE AGEN-
CIES.—The Secretary shall collaborate, coordi-
nate, and consult with State agencies respon-
sible for administering the Medicaid program 
under title XIX of the Social Security Act and 
the Children’s Health Insurance Program under 
title XXI of such Act with respect to developing 
and disseminating strategies, goals, models, and 
timetables that are consistent with the national 
priorities identified under subparagraph (A). 
‘‘(b) STRATEGIC PLAN.— 
‘‘(1) IN GENERAL.—The national strategy shall 
include a comprehensive strategic plan to achieve the 
priorities described in subsection (a). 
‘‘(2) REQUIREMENTS.—The strategic plan shall 
include provisions for addressing, at a minimum, the 
following: 
‘‘(A) Coordination among agencies within 
the Department, which shall include steps to 
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•AMDT. NO. 2786 
minimize duplication of efforts and utilization 
of common quality measures, where available. 
Such common quality measures shall be meas-
ures identified by the Secretary under section 
1139A or 1139B of the Social Security Act or 
endorsed under section 1890 of such Act. 
‘‘(B) Agency-specific strategic plans to 
achieve national priorities. 
‘‘(C) Establishment of annual benchmarks 
for each relevant agency to achieve national pri-
orities. 
‘‘(D) A process for regular reporting by 
the agencies to the Secretary on the implemen-
tation of the strategic plan. 
‘‘(E) Strategies to align public and private 
payers with regard to quality and patient safety 
efforts. 
‘‘(F) Incorporating quality improvement 
and measurement in the strategic plan for 
health information technology required by the 
American Recovery and Reinvestment Act of 
2009 (Public Law 111–5). 
‘‘(c) PERIODIC UPDATE OF NATIONAL STRATEGY.— 
The Secretary shall update the national strategy not less 
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•AMDT. NO. 2786 
than annually. Any such update shall include a review of 
short- and long-term goals. 
‘‘(d) SUBMISSION AND AVAILABILITY OF NATIONAL 
STRATEGY AND UPDATES.— 
‘‘(1) DEADLINE FOR INITIAL SUBMISSION OF 
NATIONAL STRATEGY.—Not later than January 1, 
2011, the Secretary shall submit to the relevant 
committees of Congress the national strategy de-
scribed in subsection (a). 
‘‘(2) UPDATES.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
submit to the relevant committees of Congress 
an annual update to the strategy described in 
paragraph (1). 
‘‘(B) INFORMATION
SUBMITTED.—Each 
update submitted under subparagraph (A) shall 
include— 
‘‘(i) a review of the short- and long- 
term goals of the national strategy and any 
gaps in such strategy; 
‘‘(ii) an analysis of the progress, or 
lack of progress, in meeting such goals and 
any barriers to such progress; 
‘‘(iii) the information reported under 
section 1139A of the Social Security Act, 
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•AMDT. NO. 2786 
consistent with the reporting requirements 
of such section; and 
‘‘(iv) in the case of an update required 
to be submitted on or after January 1, 
2014, the information reported under sec-
tion 1139B(b)(4) of the Social Security 
Act, consistent with the reporting require-
ments of such section. 
‘‘(C) SATISFACTION OF OTHER REPORTING 
REQUIREMENTS.—Compliance with the require-
ments of clauses (iii) and (iv) of subparagraph 
(B) shall satisfy the reporting requirements 
under sections 1139A(a)(6) and 1139B(b)(4), 
respectively, of the Social Security Act. 
‘‘(e) 
HEALTH
CARE
QUALITY
INTERNET 
WEBSITE.—Not later than January 1, 2011, the Sec-
retary shall create an Internet website to make public in-
formation regarding— 
‘‘(1) the national priorities for health care qual-
ity improvement established under subsection (a)(2); 
‘‘(2) the agency-specific strategic plans for 
health care quality described in subsection (b)(2)(B); 
and 
‘‘(3) other information, as the Secretary deter-
mines to be appropriate.’’. 
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•AMDT. NO. 2786 
SEC. 3012. INTERAGENCY WORKING GROUP ON HEALTH 
CARE QUALITY. 
(a) IN GENERAL.—The President shall convene a 
working group to be known as the Interagency Working 
Group on Health Care Quality (referred to in this section 
as the ‘‘Working Group’’). 
(b) GOALS.—The goals of the Working Group shall 
be to achieve the following: 
(1) Collaboration, cooperation, and consultation 
between Federal departments and agencies with re-
spect to developing and disseminating strategies, 
goals, models, and timetables that are consistent 
with the national priorities identified under section 
399HH(a)(2) of the Public Health Service Act (as 
added by section 3011). 
(2) Avoidance of inefficient duplication of qual-
ity improvement efforts and resources, where prac-
ticable, and a streamlined process for quality report-
ing and compliance requirements. 
(3) Assess alignment of quality efforts in the 
public sector with private sector initiatives. 
(c) COMPOSITION.— 
(1) IN GENERAL.—The Working Group shall be 
composed of senior level representatives of— 
(A) the Department of Health and Human 
Services; 
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•AMDT. NO. 2786 
(B) the Centers for Medicare & Medicaid 
Services; 
(C) the National Institutes of Health; 
(D) the Centers for Disease Control and 
Prevention; 
(E) the Food and Drug Administration; 
(F) the Health Resources and Services Ad-
ministration; 
(G) the Agency for Healthcare Research 
and Quality; 
(H) the Office of the National Coordinator 
for Health Information Technology; 
(I) the Substance Abuse and Mental 
Health Services Administration; 
(J) the Administration for Children and 
Families; 
(K) the Department of Commerce; 
(L) the Office of Management and Budget; 
(M) the United States Coast Guard; 
(N) the Federal Bureau of Prisons; 
(O) the National Highway Traffic Safety 
Administration; 
(P) the Federal Trade Commission; 
(Q) the Social Security Administration; 
(R) the Department of Labor; 
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•AMDT. NO. 2786 
(S) the United States Office of Personnel 
Management; 
(T) the Department of Defense; 
(U) the Department of Education; 
(V) the Department of Veterans Affairs; 
(W) the Veterans Health Administration; 
and 
(X) any other Federal agencies and de-
partments with activities relating to improving 
health care quality and safety, as determined by 
the President. 
(2) CHAIR AND VICE-CHAIR.— 
(A) CHAIR.—The Working Group shall be 
chaired by the Secretary of Health and Human 
Services. 
(B) VICE CHAIR.—Members of the Work-
ing Group, other than the Secretary of Health 
and Human Services, shall serve as Vice Chair 
of the Group on a rotating basis, as determined 
by the Group. 
(d) REPORT TO CONGRESS.—Not later than Decem-
ber 31, 2010, and annually thereafter, the Working Group 
shall submit to the relevant Committees of Congress, and 
make public on an Internet website, a report describing 
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•AMDT. NO. 2786 
the progress and recommendations of the Working Group 
in meeting the goals described in subsection (b). 
SEC. 3013. QUALITY MEASURE DEVELOPMENT. 
(a) PUBLIC HEALTH SERVICE ACT.—Title IX of the 
Public Health Service Act (42 U.S.C. 299 et seq.) is 
amended— 
(1) by redesignating part D as part E; 
(2) by redesignating sections 931 through 938 
as sections 941 through 948, respectively; 
(3) in section 948(1), as so redesignated, by 
striking ‘‘931’’ and inserting ‘‘941’’; and 
(4) by inserting after section 926 the following: 
‘‘PART D—HEALTH CARE QUALITY 
IMPROVEMENT 
‘‘Subpart I—Quality Measure Development 
‘‘SEC. 931. QUALITY MEASURE DEVELOPMENT. 
‘‘(a) QUALITY MEASURE.—In this subpart, the term 
‘quality measure’ means a standard for measuring the per-
formance and improvement of population health or of 
health plans, providers of services, and other clinicians in 
the delivery of health care services. 
‘‘(b) IDENTIFICATION OF QUALITY MEASURES.— 
‘‘(1) IDENTIFICATION.—The Secretary, in con-
sultation with the Director of the Agency for 
Healthcare Research and Quality and the Adminis-
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•AMDT. NO. 2786 
trator of the Centers for Medicare & Medicaid Serv-
ices, shall identify, not less often than triennially, 
gaps where no quality measures exist and existing 
quality measures that need improvement, updating, 
or expansion, consistent with the national strategy 
under section 399HH, to the extent available, for 
use in Federal health programs. In identifying such 
gaps and existing quality measures that need im-
provement, the Secretary shall take into consider-
ation— 
‘‘(A) the gaps identified by the entity with 
a contract under section 1890(a) of the Social 
Security Act and other stakeholders; 
‘‘(B) quality measures identified by the pe-
diatric quality measures program under section 
1139A of the Social Security Act; and 
‘‘(C) quality measures identified through 
the Medicaid Quality Measurement Program 
under section 1139B of the Social Security Act. 
‘‘(2) PUBLICATION.—The Secretary shall make 
available to the public on an Internet website a re-
port on any gaps identified under paragraph (1) and 
the process used to make such identification. 
‘‘(c) GRANTS OR CONTRACTS FOR QUALITY MEAS-
URE DEVELOPMENT.— 
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•AMDT. NO. 2786 
‘‘(1) IN GENERAL.—The Secretary shall award 
grants, contracts, or intergovernmental agreements 
to eligible entities for purposes of developing, im-
proving, updating, or expanding quality measures 
identified under subsection (b). 
‘‘(2) PRIORITIZATION
IN
THE
DEVELOPMENT 
OF QUALITY MEASURES.—In awarding grants, con-
tracts, or agreements under this subsection, the Sec-
retary shall give priority to the development of qual-
ity measures that allow the assessment of— 
‘‘(A) health outcomes and functional status 
of patients; 
‘‘(B) the management and coordination of 
health care across episodes of care and care 
transitions for patients across the continuum of 
providers, health care settings, and health 
plans; 
‘‘(C) the experience, quality, and use of in-
formation provided to and used by patients, 
caregivers, and authorized representatives to in-
form decisionmaking about treatment options, 
including the use of shared decisionmaking 
tools and preference sensitive care (as defined 
in section 936); 
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•AMDT. NO. 2786 
‘‘(D) the meaningful use of health informa-
tion technology; 
‘‘(E) the safety, effectiveness, patient- 
centeredness, appropriateness, and timeliness of 
care; 
‘‘(F) the efficiency of care; 
‘‘(G) the equity of health services and 
health disparities across health disparity popu-
lations (as defined in section 485E) and geo-
graphic areas; 
‘‘(H) patient experience and satisfaction; 
‘‘(I) the use of innovative strategies and 
methodologies identified under section 933; and 
‘‘(J) other areas determined appropriate by 
the Secretary. 
‘‘(3) ELIGIBLE ENTITIES.—To be eligible for a 
grant or contract under this subsection, an entity 
shall— 
‘‘(A) have demonstrated expertise and ca-
pacity in the development and evaluation of 
quality measures; 
‘‘(B) have adopted procedures to include in 
the quality measure development process— 
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•AMDT. NO. 2786 
‘‘(i) the views of those providers or 
payers whose performance will be assessed 
by the measure; and 
‘‘(ii) the views of other parties who 
also will use the quality measures (such as 
patients, consumers, and health care pur-
chasers); 
‘‘(C) collaborate with the entity with a con-
tract under section 1890(a) of the Social Secu-
rity Act and other stakeholders, as practicable, 
and the Secretary so that quality measures de-
veloped by the eligible entity will meet the re-
quirements to be considered for endorsement by 
the entity with a contract under such section 
1890(a); 
‘‘(D) have transparent policies regarding 
governance and conflicts of interest; and 
‘‘(E) submit an application to the Sec-
retary at such time and in such manner, as the 
Secretary may require. 
‘‘(4) USE OF FUNDS.—An entity that receives 
a grant, contract, or agreement under this sub-
section shall use such award to develop quality 
measures that meet the following requirements: 
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•AMDT. NO. 2786 
‘‘(A) Such measures support measures re-
quired to be reported under the Social Security 
Act, where applicable, and in support of gaps 
and existing quality measures that need im-
provement, as described in subsection (b)(1)(A). 
‘‘(B) Such measures support measures de-
veloped under section 1139A of the Social Secu-
rity Act and the Medicaid Quality Measurement 
Program under section 1139B of such Act, 
where applicable. 
‘‘(C) To the extent practicable, data on 
such quality measures is able to be collected 
using health information technologies. 
‘‘(D) Each quality measure is free of 
charge to users of such measure. 
‘‘(E) Each quality measure is publicly 
available on an Internet website. 
‘‘(d) OTHER ACTIVITIES BY THE SECRETARY.—The 
Secretary may use amounts available under this section 
to update and test, where applicable, quality measures en-
dorsed by the entity with a contract under section 1890(a) 
of the Social Security Act or adopted by the Secretary. 
‘‘(e) COORDINATION
OF GRANTS.—The Secretary 
shall ensure that grants or contracts awarded under this 
section are coordinated with grants and contracts awarded 
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•AMDT. NO. 2786 
under sections 1139A(5) and 1139B(4)(A) of the Social 
Security Act.’’. 
(b) SOCIAL SECURITY ACT.—Section 1890A of the 
Social Security Act, as added by section 3014(b), is 
amended by adding at the end the following new sub-
section: 
‘‘(e) DEVELOPMENT OF QUALITY MEASURES.—The 
Administrator of the Center for Medicare & Medicaid 
Services shall through contracts develop quality measures 
(as determined appropriate by the Administrator) for use 
under this Act. In developing such measures, the Adminis-
trator shall consult with the Director of the Agency for 
Healthcare Research and Quality.’’. 
(c) FUNDING.—There are authorized to be appro-
priated to the Secretary of Health and Human Services 
to carry out this section, $75,000,000 for each of fiscal 
years 2010 through 2014. Of the amounts appropriated 
under the preceding sentence in a fiscal year, not less than 
50 percent of such amounts shall be used pursuant to sub-
section (e) of section 1890A of the Social Security Act, 
as added by subsection (b), with respect to programs 
under such Act. Amounts appropriated under this sub-
section for a fiscal year shall remain available until ex-
pended. 
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•AMDT. NO. 2786 
SEC. 3014. QUALITY MEASUREMENT. 
(a) NEW DUTIES FOR CONSENSUS-BASED ENTITY.— 
(1) MULTI-STAKEHOLDER GROUP INPUT.—Sec-
tion 1890(b) of the Social Security Act (42 U.S.C. 
1395aaa(b)), as amended by section 3003, is amend-
ed by adding at the end the following new para-
graphs: 
‘‘(7) 
CONVENING
MULTI-STAKEHOLDER 
GROUPS.— 
‘‘(A) IN GENERAL.—The entity shall con-
vene multi-stakeholder groups to provide input 
on— 
‘‘(i) the selection of quality measures 
described in subparagraph (B), from 
among— 
‘‘(I) such measures that have 
been endorsed by the entity; and 
‘‘(II) such measures that have 
not been considered for endorsement 
by such entity but are used or pro-
posed to be used by the Secretary for 
the collection or reporting of quality 
measures; and 
‘‘(ii) national priorities (as identified 
under section 399HH of the Public Health 
Service Act) for improvement in population 
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•AMDT. NO. 2786 
health and in the delivery of health care 
services for consideration under the na-
tional strategy established under section 
399HH of the Public Health Service Act. 
‘‘(B) QUALITY MEASURES.— 
‘‘(i) IN GENERAL.—Subject to clause 
(ii), the quality measures described in this 
subparagraph are quality measures— 
‘‘(I) for use pursuant to sections 
1814(i)(5)(D), 
1833(i)(7), 
1833(t)(17), 
1848(k)(2)(C), 
1866(k)(3), 
1881(h)(2)(A)(iii), 
1886(b)(3)(B)(viii), 
1886(j)(7)(D), 
1886(m)(5)(D), 
1886(o)(2), 
and 
1895(b)(3)(B)(v); 
‘‘(II) for use in reporting per-
formance information to the public; 
and 
‘‘(III) for use in health care pro-
grams other than for use under this 
Act. 
‘‘(ii) EXCLUSION.—Data sets (such as 
the outcome and assessment information 
set for home health services and the min-
imum data set for skilled nursing facility 
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•AMDT. NO. 2786 
services) that are used for purposes of 
classification systems used in establishing 
payment rates under this title shall not be 
quality measures described in this subpara-
graph. 
‘‘(C) REQUIREMENT
FOR
TRANSPARENCY 
IN PROCESS.— 
‘‘(i) 
IN
GENERAL.—In 
convening 
multi-stakeholder groups under subpara-
graph (A) with respect to the selection of 
quality measures, the entity shall provide 
for an open and transparent process for 
the activities conducted pursuant to such 
convening. 
‘‘(ii) SELECTION OF ORGANIZATIONS 
PARTICIPATING
IN
MULTI-STAKEHOLDER 
GROUPS.—The process described in clause 
(i) shall ensure that the selection of rep-
resentatives comprising such groups pro-
vides for public nominations for, and the 
opportunity for public comment on, such 
selection. 
‘‘(D) MULTI-STAKEHOLDER
GROUP
DE-
FINED.—In this paragraph, the term ‘multi- 
stakeholder group’ means, with respect to a 
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•AMDT. NO. 2786 
quality measure, a voluntary collaborative of or-
ganizations representing a broad group of 
stakeholders interested in or affected by the use 
of such quality measure. 
‘‘(8) TRANSMISSION
OF
MULTI-STAKEHOLDER 
INPUT.—Not later than February 1 of each year 
(beginning with 2012), the entity shall transmit to 
the Secretary the input of multi-stakeholder groups 
provided under paragraph (7).’’. 
(2) ANNUAL REPORT.—Section 1890(b)(5)(A) 
of 
the 
Social 
Security 
Act 
(42 
U.S.C. 
1395aaa(b)(5)(A)) is amended— 
(A) in clause (ii), by striking ‘‘and’’ at the 
end; 
(B) in clause (iii), by striking the period at 
the end and inserting a semicolon; and 
(C) by adding at the end the following new 
clauses: 
‘‘(iv) gaps in endorsed quality meas-
ures, which shall include measures that are 
within priority areas identified by the Sec-
retary under the national strategy estab-
lished under section 399HH of the Public 
Health Service Act, and where quality 
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•AMDT. NO. 2786 
measures are unavailable or inadequate to 
identify or address such gaps; 
‘‘(v) areas in which evidence is insuffi-
cient to support endorsement of quality 
measures in priority areas identified by the 
Secretary under the national strategy es-
tablished under section 399HH of the 
Public Health Service Act and where tar-
geted research may address such gaps; and 
‘‘(vi) the matters described in clauses 
(i) and (ii) of paragraph (7)(A).’’. 
(b) MULTI-STAKEHOLDER GROUP INPUT INTO SE-
LECTION OF QUALITY MEASURES.—Title XVIII of the So-
cial Security Act (42 U.S.C. 1395 et seq.) is amended by 
inserting after section 1890 the following: 
‘‘QUALITY MEASUREMENT 
‘‘SEC. 1890A. (a) MULTI-STAKEHOLDER
GROUP 
INPUT INTO SELECTION OF QUALITY MEASURES.—The 
Secretary shall establish a pre-rulemaking process under 
which the following steps occur with respect to the selec-
tion 
of 
quality 
measures 
described 
in 
section 
1890(b)(7)(B): 
‘‘(1) INPUT.—Pursuant to section 1890(b)(7), 
the entity with a contract under section 1890 shall 
convene multi-stakeholder groups to provide input to 
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•AMDT. NO. 2786 
the Secretary on the selection of quality measures 
described in subparagraph (B) of such paragraph. 
‘‘(2) PUBLIC AVAILABILITY OF MEASURES CON-
SIDERED FOR SELECTION.—Not later than Decem-
ber 1 of each year (beginning with 2011), the Sec-
retary shall make available to the public a list of 
quality measures described in section 1890(b)(7)(B) 
that the Secretary is considering under this title. 
‘‘(3) TRANSMISSION
OF
MULTI-STAKEHOLDER 
INPUT.—Pursuant to section 1890(b)(8), not later 
than February 1 of each year (beginning with 
2012), the entity shall transmit to the Secretary the 
input of multi-stakeholder groups described in para-
graph (1). 
‘‘(4) CONSIDERATION OF MULTI-STAKEHOLDER 
INPUT.—The Secretary shall take into consideration 
the input from multi-stakeholder groups described in 
paragraph (1) in selecting quality measures de-
scribed in section 1890(b)(7)(B) that have been en-
dorsed by the entity with a contract under section 
1890 and measures that have not been endorsed by 
such entity. 
‘‘(5) RATIONALE FOR USE OF QUALITY MEAS-
URES.—The Secretary shall publish in the Federal 
Register the rationale for the use of any quality 
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•AMDT. NO. 2786 
measure described in section 1890(b)(7)(B) that has 
not been endorsed by the entity with a contract 
under section 1890. 
‘‘(6) ASSESSMENT OF IMPACT.—Not later than 
March 1, 2012, and at least once every three years 
thereafter, the Secretary shall— 
‘‘(A) conduct an assessment of the quality 
impact of the use of endorsed measures de-
scribed in section 1890(b)(7)(B); and 
‘‘(B) make such assessment available to 
the public. 
‘‘(b) PROCESS FOR DISSEMINATION OF MEASURES 
USED BY THE SECRETARY.— 
‘‘(1) IN GENERAL.—The Secretary shall estab-
lish a process for disseminating quality measures 
used by the Secretary. Such process shall include the 
following: 
‘‘(A) The incorporation of such measures, 
where applicable, in workforce programs, train-
ing curricula, and any other means of dissemi-
nation determined appropriate by the Secretary. 
‘‘(B) The dissemination of such quality 
measures through the national strategy devel-
oped under section 399HH of the Public Health 
Service Act. 
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•AMDT. NO. 2786 
‘‘(2) EXISTING METHODS.—To the extent prac-
ticable, the Secretary shall utilize and expand exist-
ing dissemination methods in disseminating quality 
measures under the process established under para-
graph (1). 
‘‘(c) REVIEW OF QUALITY MEASURES USED BY THE 
SECRETARY.— 
‘‘(1) IN GENERAL.—The Secretary shall— 
‘‘(A) periodically (but in no case less often 
than once every 3 years) review quality meas-
ures described in section 1890(b)(7)(B); and 
‘‘(B) with respect to each such measure, 
determine whether to— 
‘‘(i) maintain the use of such meas-
ure; or 
‘‘(ii) phase out such measure. 
‘‘(2) CONSIDERATIONS.—In conducting the re-
view under paragraph (1), the Secretary shall take 
steps to— 
‘‘(A) seek to avoid duplication of measures 
used; and 
‘‘(B) take into consideration current inno-
vative methodologies and strategies for quality 
improvement practices in the delivery of health 
care services that represent best practices for 
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•AMDT. NO. 2786 
such quality improvement and measures en-
dorsed by the entity with a contract under sec-
tion 1890 since the previous review by the Sec-
retary. 
‘‘(d) RULE OF CONSTRUCTION.—Nothing in this sec-
tion shall preclude a State from using the quality meas-
ures identified under sections 1139A and 1139B.’’. 
(c) FUNDING.—For purposes of carrying out the 
amendments made by this section, the Secretary shall pro-
vide for the transfer, from the Federal Hospital Insurance 
Trust Fund under section 1817 of the Social Security Act 
(42 U.S.C. 1395i) and the Federal Supplementary Med-
ical Insurance Trust Fund under section 1841 of such Act 
(42 U.S.C. 1395t), in such proportion as the Secretary 
determines appropriate, of $20,000,000, to the Centers for 
Medicare & Medicaid Services Program Management Ac-
count for each of fiscal years 2010 through 2014. 
Amounts transferred under the preceding sentence shall 
remain available until expended. 
SEC. 3015. DATA COLLECTION; PUBLIC REPORTING. 
Title III of the Public Health Service Act (42 U.S.C. 
241 et seq.), as amended by section 3011, is further 
amended by adding at the end the following: 
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•AMDT. NO. 2786 
‘‘SEC. 399II. COLLECTION AND ANALYSIS OF DATA FOR 
QUALITY AND RESOURCE USE MEASURES. 
‘‘(a) IN GENERAL.—The Secretary shall collect and 
aggregate consistent data on quality and resource use 
measures from information systems used to support health 
care delivery to implement the public reporting of perform-
ance information, as described in section 399JJ, and may 
award grants or contracts for this purpose. The Secretary 
shall ensure that such collection, aggregation, and analysis 
systems span an increasingly broad range of patient popu-
lations, providers, and geographic areas over time. 
‘‘(b) GRANTS OR CONTRACTS FOR DATA COLLEC-
TION.— 
‘‘(1) IN GENERAL.—The Secretary may award 
grants or contracts to eligible entities to support 
new, or improve existing, efforts to collect and ag-
gregate quality and resource use measures described 
under subsection (c). 
‘‘(2) ELIGIBLE ENTITIES.—To be eligible for a 
grant or contract under this subsection, an entity 
shall— 
‘‘(A) be— 
‘‘(i) a multi-stakeholder entity that co-
ordinates the development of methods and 
implementation plans for the consistent re-
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•AMDT. NO. 2786 
porting of summary quality and cost infor-
mation; 
‘‘(ii) an entity capable of submitting 
such summary data for a particular popu-
lation and providers, such as a disease reg-
istry, regional collaboration, health plan 
collaboration, or other population-wide 
source; or 
‘‘(iii) a Federal Indian Health Service 
program or a health program operated by 
an Indian tribe (as defined in section 4 of 
the Indian Health Care Improvement Act); 
‘‘(B) promote the use of the systems that 
provide data to improve and coordinate patient 
care; 
‘‘(C) support the provision of timely, con-
sistent quality and resource use information to 
health care providers, and other groups and or-
ganizations as appropriate, with an opportunity 
for providers to correct inaccurate measures; 
and 
‘‘(D) agree to report, as determined by the 
Secretary, measures on quality and resource use 
to the public in accordance with the public re-
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•AMDT. NO. 2786 
porting 
process 
established 
under 
section 
399JJ. 
‘‘(c) CONSISTENT DATA AGGREGATION.—The Sec-
retary may award grants or contracts under this section 
only to entities that enable summary data that can be inte-
grated and compared across multiple sources. The Sec-
retary shall provide standards for the protection of the se-
curity and privacy of patient data. 
‘‘(d) MATCHING FUNDS.—The Secretary may not 
award a grant or contract under this section to an entity 
unless the entity agrees that it will make available (di-
rectly or through contributions from other public or pri-
vate entities) non-Federal contributions toward the activi-
ties to be carried out under the grant or contract in an 
amount equal to $1 for each $5 of Federal funds provided 
under the grant or contract. Such non-Federal matching 
funds may be provided directly or through donations from 
public or private entities and may be in cash or in-kind, 
fairly evaluated, including plant, equipment, or services. 
‘‘(e) AUTHORIZATION
OF
APPROPRIATIONS.—To 
carry out this section, there are authorized to be appro-
priated such sums as may be necessary for fiscal years 
2010 through 2014. 
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•AMDT. NO. 2786 
‘‘SEC. 399JJ. PUBLIC REPORTING OF PERFORMANCE IN-
FORMATION. 
‘‘(a) 
DEVELOPMENT
OF
PERFORMANCE 
WEBSITES.—The Secretary shall make available to the 
public, through standardized Internet websites, perform-
ance information summarizing data on quality measures. 
Such information shall be tailored to respond to the dif-
fering needs of hospitals and other institutional health 
care providers, physicians and other clinicians, patients, 
consumers, researchers, policymakers, States, and other 
stakeholders, as the Secretary may specify. 
‘‘(b) INFORMATION ON CONDITIONS.—The perform-
ance information made publicly available on an Internet 
website, as described in subsection (a), shall include infor-
mation regarding clinical conditions to the extent such in-
formation is available, and the information shall, where 
appropriate, 
be 
provider-specific 
and 
sufficiently 
disaggregated and specific to meet the needs of patients 
with different clinical conditions. 
‘‘(c) CONSULTATION.— 
‘‘(1) IN GENERAL.—In carrying out this sec-
tion, the Secretary shall consult with the entity with 
a contract under section 1890(a) of the Social Secu-
rity Act, and other entities, as appropriate, to deter-
mine the type of information that is useful to stake-
holders and the format that best facilitates use of 
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•AMDT. NO. 2786 
the reports and of performance reporting Internet 
websites. 
‘‘(2) CONSULTATION WITH STAKEHOLDERS.— 
The entity with a contract under section 1890(a) of 
the Social Security Act shall convene multi-stake-
holder groups, as described in such section, to review 
the design and format of each Internet website made 
available under subsection (a) and shall transmit to 
the Secretary the views of such multi-stakeholder 
groups with respect to each such design and format. 
‘‘(d) COORDINATION.—Where appropriate, the Sec-
retary shall coordinate the manner in which data are pre-
sented through Internet websites described in subsection 
(a) and for public reporting of other quality measures by 
the Secretary, including such quality measures under title 
XVIII of the Social Security Act. 
‘‘(e) AUTHORIZATION
OF
APPROPRIATIONS.—To 
carry out this section, there are authorized to be appro-
priated such sums as may be necessary for fiscal years 
2010 through 2014.’’. 
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