IB 
Union Calendar No. 283 
113TH CONGRESS 
2D SESSION 
H. R. 2810 
[Report No. 113–257, Parts I and II] 
To amend title XVIII of the Social Security Act to reform the sustainable 
growth rate and Medicare payment for physicians’ services, and for 
other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 24, 2013 
Mr. BURGESS (for himself, Mr. PALLONE, Mr. UPTON, Mr. WAXMAN, Mr. 
PITTS, and Mr. DINGELL) introduced the following bill; which was re-
ferred to the Committee on Energy and Commerce, and in addition to 
the Committees on Ways and Means and the Judiciary, for a period to 
be subsequently determined by the Speaker, in each case for consider-
ation of such provisions as fall within the jurisdiction of the committee 
concerned 
NOVEMBER 12, 2013 
Reported from the Committee on Energy and Commerce with an amendment 
[Strike out all after the enacting clause and insert the part printed in italic] 
NOVEMBER 12, 2013 
The Committee on the Judiciary discharged 
NOVEMBER 12, 2013 
Referral to the Committee on Ways and Means extended for a period ending 
not later than December 2, 2013 
DECEMBER 2, 2013 
Referral to the Committee on Ways and Means extended for a period ending 
not later than January 10, 2014 
JANUARY 10, 2014 
Referral to the Committee on Ways and Means extended for a period ending 
not later than March 14, 2014 
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MARCH 14, 2014 
Additional sponsors: Mr. CASSIDY, Mr. BUCSHON, Mrs. CHRISTENSEN, Mr. 
GINGREY of Georgia, Mr. STOCKMAN, Mr. THORNBERRY, Mr. BENISHEK, 
Mr. MURPHY of Pennsylvania, Mr. GOSAR, Ms. MATSUI, Ms. CASTOR of 
Florida, Mr. ENGEL, Mr. CUELLAR, Mr. SESSIONS, Mr. YOUNG of Alas-
ka, Mr. GENE GREEN of Texas, Mr. OLSON, Mrs. ELLMERS, Mr. ROE 
of Tennessee, Mrs. BLACKBURN, Mr. LATTA, Mrs. MCMORRIS RODGERS, 
Mr. TERRY, Mr. ROGERS of Michigan, Mr. WALDEN, Mr. BILIRAKIS, Ms. 
SCHAKOWSKY, Mr. BRALEY of Iowa, Mrs. CAPPS, Mr. CARTER, Mr. BAR-
TON, Mr. WHITFIELD, Mr. LANCE, Mr. HOLDING, Mr. WESTMORELAND, 
Mr. LATHAM, Mrs. BROOKS of Indiana, Mr. WALBERG, Mr. RICE of 
South Carolina, Mr. LOEBSACK, Mr. COFFMAN, Mr. BERA of California, 
Mr. RUIZ, Mr. STIVERS, Mr. MCKINLEY, Mr. KENNEDY, Mr. BEN RAY 
LUJA´N of New Mexico, Mr. RUSH, Mr. YODER, Mr. MARINO, Mr. 
MCNERNEY, and Mr. LANGEVIN 
MARCH 14, 2014 
Reported from the Committee on Ways and Means with an amendment, com-
mitted to the Committee of the Whole House on the State of the Union, 
and ordered to be printed 
[Strike out all after the enacting clause and insert the part printed in boldface roman] 
[For text of introduced bill, see copy of bill as introduced on July 24, 2013] 
A BILL 
To amend title XVIII of the Social Security Act to reform 
the sustainable growth rate and Medicare payment for 
physicians’ services, and for other purposes. 
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Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Medicare Patient Access and Quality Improvement Act of 
2013’’. 
(b) TABLE OF CONTENTS.—The table of contents of this 
Act is as follows: 
Sec. 1. Short title; table of contents. 
Sec. 2. Reform of sustainable growth rate (SGR) and Medicare payment for phy-
sicians’ services. 
Sec. 3. Expanding availability of Medicare data. 
Sec. 4. Encouraging care coordination and medical homes. 
Sec. 5. Miscellaneous. 
SEC. 2. REFORM OF SUSTAINABLE GROWTH RATE (SGR) 
AND MEDICARE PAYMENT FOR PHYSICIANS’ 
SERVICES. 
(a) STABILIZING FEE UPDATES (PHASE I).— 
(1) REPEAL OF SGR PAYMENT METHODOLOGY.— 
Section 1848 of the Social Security Act (42 U.S.C. 
1395w–4) is amended— 
(A) in subsection (d)— 
(i) in paragraph (1)(A), by inserting 
‘‘or a subsequent paragraph or section 
1848A’’ after ‘‘paragraph (4)’’; and 
(ii) in paragraph (4)— 
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(I) in the heading, by striking 
‘‘YEARS BEGINNING WITH 2001’’ and in-
serting ‘‘2001, 2002, AND 2003’’; and 
(II) in subparagraph (A), by 
striking ‘‘a year beginning with 2001’’ 
and inserting ‘‘2001, 2002, and 2003’’; 
and 
(B) in subsection (f)— 
(i) in paragraph (1)(B), by inserting 
‘‘through 2013’’ after ‘‘of each succeeding 
year’’; and 
(ii) in paragraph (2), by inserting 
‘‘and ending with 2013’’ after ‘‘beginning 
with 2000’’. 
(2) UPDATE
OF
RATES
FOR
2014
THROUGH 
2018.—Subsection (d) of section 1848 of the Social Se-
curity Act (42 U.S.C. 1395w–4) is amended by add-
ing at the end the following new paragraph: 
‘‘(15) UPDATE
FOR
2014
THROUGH
2018.—The 
update to the single conversion factor established in 
paragraph (1)(C) for each of 2014 through 2018 shall 
be 0.5 percent.’’. 
(b) QUALITY UPDATE INCENTIVE PROGRAM (PHASE 
II).— 
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(1) IN GENERAL.—Section 1848 of the Social Se-
curity Act (42 U.S.C. 1395w–4), as amended by sub-
section (a), is further amended— 
(A) in subsection (d), by adding at the end 
the following new paragraph: 
‘‘(16) UPDATE BEGINNING WITH 2019.— 
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), the update to the single conversion 
factor established in paragraph (1)(C) for each 
year beginning with 2019 shall be 0.5 percent. 
‘‘(B) ADJUSTMENT.—In the case of an eligi-
ble professional (as defined in subsection (k)(3)) 
who does not have a payment arrangement de-
scribed in section 1848A(a) in effect, the update 
under subparagraph (A) for a year beginning 
with 2019 shall be adjusted by the applicable 
quality adjustment determined under subsection 
(q)(3) for the year involved.’’; and 
(B) in subsection (i)(1)— 
(i) by striking ‘‘and’’ at the end of sub-
paragraph (D); 
(ii) by striking the period at the end of 
subparagraph (E) and inserting ‘‘, and’’; 
and 
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(iii) by adding at the end the following 
new subparagraph: 
‘‘(F) the implementation of subsection (q).’’. 
(2) ENHANCING PHYSICIAN QUALITY REPORTING 
SYSTEM
TO
SUPPORT
QUALITY
UPDATE
INCENTIVE 
PROGRAM.—Section 1848 of the Social Security Act 
(42 U.S.C. 1395w–4) is amended— 
(A) in subsection (k)(1), in the first sen-
tence, by inserting ‘‘and, if applicable, clinical 
practice improvement activities,’’ after ‘‘quality 
measures’’; 
(B) in subsection (k)(2)— 
(i) in subparagraph (C)— 
(I) in the subparagraph heading, 
by striking ‘‘AND SUBSEQUENT YEARS’’ 
and inserting ‘‘THROUGH 2018’’; and 
(II) in clause (i), by inserting 
‘‘(before 
2019)’’ 
after 
‘‘subsequent 
year’’; 
(ii) by redesignating subparagraph (D) 
as subparagraph (E); 
(iii) by inserting after subparagraph 
(C) the following new subparagraph: 
‘‘(D) FOR 2019 AND SUBSEQUENT YEARS.— 
For purposes of reporting data on quality meas-
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‘‘(C) CLINICAL PRACTICE IMPROVEMENT AC-
TIVITIES.—The term ‘clinical practice improve-
ment activity’ means an activity that relevant 
eligible professional organizations and other rel-
evant stakeholders identify as improving clinical 
practice or care delivery and that the Secretary 
determines, when effectively executed, is likely to 
result in improved outcomes. 
‘‘(D) ELIGIBLE
PROFESSIONAL
ORGANIZA-
TION.—The term ‘eligible professional organiza-
tion’ means a professional organization as de-
fined by nationally recognized multispecialty 
boards of certification or equivalent certification 
boards. 
‘‘(E) PEER COHORT.—The term ‘peer co-
hort’ means a peer cohort identified on the list 
under paragraph (9)(B), as updated under 
clause (ii) of such paragraph.’’; 
(D) in subsection (k)(7), by striking ‘‘ and 
the application of paragraphs (4) and (5)’’ and 
inserting ‘‘, the application of paragraphs (4) 
and (5), and the implementation of paragraph 
(9)’’; 
(E) by adding at the end of subsection (k) 
the following new paragraph: 
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‘‘(9) ESTABLISHMENT OF FINAL CORE MEASURE 
SETS.— 
‘‘(A) IN GENERAL.—Under the system under 
this subsection— 
‘‘(i) for each peer cohort identified 
under subparagraph (B) and in accordance 
with this paragraph, there shall be pub-
lished a final core measure set under sub-
paragraph (F), which shall consist of qual-
ity measures and may also consist of clin-
ical practice improvement activities, with 
respect to which eligible professionals shall, 
subject to subsection (m)(3)(C), be assessed 
for purposes of determining, for years begin-
ning with 2019, the quality adjustment 
under subsection (q)(3) applicable to such 
professionals; and 
‘‘(ii) each eligible professional shall 
self-identify, in accordance with subpara-
graph (B), within such a peer cohort for 
purposes of such assessments. 
‘‘(B) PEER COHORTS.—The Secretary shall 
identify (and publish a list of) peer cohorts by 
which eligible professionals shall self-identify for 
purposes of this subsection and subsection (q) 
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with respect to a performance period (as defined 
in subsection (q)(2)(B)) for a year beginning 
with 2019. For purposes of this subsection and 
subsection (q), the Secretary shall develop one or 
more peer cohorts for multispecialty groups, each 
of which shall be included as a peer cohort under 
this subparagraph. Such self-identification will 
be made through such a process and at such time 
as specified under the system under this sub-
section. Such list— 
‘‘(i) shall include, as peer cohorts, pro-
vider specialties defined by nationally rec-
ognized multispecialty boards of certifi-
cation or equivalent certification boards 
and such other cohorts as established under 
this section in order to capture classifica-
tions of providers across eligible professional 
organizations and other practice areas, 
groupings, or categories; and 
‘‘(ii) shall be updated from time to 
time. 
‘‘(C) QUALITY MEASURES FOR CORE MEAS-
URE SETS.— 
‘‘(i) DEVELOPMENT.—Under the sys-
tem under this subsection there shall be es-
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tablished a process for the development of 
quality measures under this subparagraph 
for purposes of potential inclusion of such 
measures in core measure sets under this 
paragraph. Under such process— 
‘‘(I) there shall be coordination, to 
the extent possible, across organizations 
developing such measures; 
‘‘(II) eligible professional organi-
zations and other relevant stakeholders 
may submit best practices and clinical 
practice guidelines for the development 
of quality measures that address qual-
ity domains (as defined under clause 
(ii)) for potential inclusion in such 
core measure sets; 
‘‘(III) there is encouraged to be 
developed, as appropriate, meaningful 
outcome measures (or quality of life 
measures in cases for which outcomes 
may not be a valid measurement), 
functional status measures, and pa-
tient experience measures; and 
‘‘(IV) measures developed under 
this clause shall be developed, to the ex-
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tent possible, in accordance with best 
practices and clinical practice guide-
lines. 
‘‘(ii) QUALITY
DOMAINS.—For pur-
poses of this paragraph, the term ‘quality 
domains’ means at least the following do-
mains: 
‘‘(I) Clinical care. 
‘‘(II) Safety. 
‘‘(III) Care coordination. 
‘‘(IV) Patient and caregiver expe-
rience. 
‘‘(V) Population health and pre-
vention. 
‘‘(D) PROCESS
FOR
ESTABLISHING
CORE 
MEASURE SETS.— 
‘‘(i) IN GENERAL.—Under the system 
under this subsection, for purposes of sub-
paragraph (A), there shall be established a 
process to approve final core measure sets 
under this paragraph for peer cohorts. Each 
such final core measure set shall be com-
posed of quality measures (and, as applica-
ble, clinical practice improvement activi-
ties) with respect to which eligible profes-
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sionals within such peer cohort shall report 
under this subsection and be assessed under 
subsection (q). Such process shall provide— 
‘‘(I) for the establishment of cri-
teria, which shall be made publicly 
available before the request is made 
under clause (ii), for selecting such 
measures and activities for potential 
inclusion in such a final core measure 
set; and 
‘‘(II) that all peer cohorts, and to 
the extent practicable all quality do-
mains, are addressed by measures and, 
as applicable, clinical practice im-
provement activities selected to be in-
cluded in a core measure set under this 
paragraph, which may include through 
the use of such a measure or clinical 
practice improvement activity that ad-
dresses more than one such domain or 
cohort. 
‘‘(ii) SOLICITATION OF PUBLIC INPUT 
ON QUALITY MEASURES AND CLINICAL PRAC-
TICE IMPROVEMENT ACTIVITIES.—Under the 
process established under clause (i), relevant 
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eligible professional organizations and other 
relevant stakeholders shall be requested to 
identify and submit quality measures and 
clinical practice improvement activities (as 
defined in paragraph (3)(C)) for selection 
under this paragraph. For purposes of the 
previous sentence, measures and activities 
may be submitted regardless of whether such 
measures were previously published in a 
proposed rule or endorsed by an entity with 
a contract under section 1890(a). 
‘‘(E) CORE MEASURE SETS.— 
‘‘(i) IN GENERAL.—Under the process 
established under subparagraph (D)(i), the 
Secretary— 
‘‘(I) shall select, from quality 
measures described in clause (ii) appli-
cable to a peer cohort, quality measures 
to be included in a core measure set for 
such cohort; 
‘‘(II) shall, to the extent there are 
insufficient quality measures applica-
ble to a peer cohort to address one or 
more applicable quality domains, select 
to be included in a core measure set for 
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such cohort such clinical practice im-
provement activities described in clause 
(ii)(IV) as are needed and available to 
sufficiently address such an applicable 
domain with respect to such peer co-
hort; and 
‘‘(III) may select, to the extent de-
termined appropriate, any additional 
clinical practice improvement activi-
ties described in clause (ii)(IV) appli-
cable to a peer cohort to be included in 
a core measure set for such cohort. 
Activities selected under this paragraph 
shall be selected with consideration of best 
practices and clinical practice guidelines 
identified under subparagraph (C)(i)(II). 
‘‘(ii) SOURCES OF QUALITY MEASURES 
AND CLINICAL PRACTICE IMPROVEMENT AC-
TIVITIES.—A quality measure or clinical 
practice improvement activity selected for 
inclusion in a core measure set under the 
process under subparagraph (D)(i) shall 
be— 
‘‘(I) a measure endorsed by a con-
sensus-based entity; 
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‘‘(II) a measure developed under 
paragraph (2)(C) or a measure other-
wise applied or developed for a similar 
purpose under this section; 
‘‘(III) a measure developed under 
subparagraph (C); or 
‘‘(IV) a measure or activity sub-
mitted under subparagraph (D)(ii). 
A measure or activity may be selected under 
this subparagraph, regardless of whether 
such measure or activity was previously 
published in a proposed rule. A measure so 
selected shall be evidence-based but (other 
than a measure described in subclause (I)) 
shall not be required to be consensus-based. 
‘‘(iii) TRANSPARENCY.—Before pub-
lishing in a final regulation a core measure 
set under clause (i) as a final core measure 
set under subparagraph (F), the Secretary 
shall— 
‘‘(I) submit for publication in ap-
plicable specialty-appropriate peer-re-
viewed journals such core measure set 
under clause (i) and the method for de-
veloping and selecting measures within 
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such set, including clinical and other 
data supporting such measures, and, 
as applicable, the method for selecting 
clinical practice improvement activi-
ties included within such set; and 
‘‘(II) regardless of whether or not 
the core measure set or method is pub-
lished in such a journal under sub-
clause (I), provide for notice of the pro-
posed regulation in the Federal Reg-
ister, including with respect to the ap-
plicable methods and data described in 
subclause (I), and a period for public 
comment thereon. 
‘‘(F) FINAL
CORE
MEASURE
SETS.—Not 
later than November 15 of the year prior to the 
first day of a performance period, the Secretary 
shall publish a final regulation in the Federal 
Register that includes a final core measure set 
(and the applicable methods and data described 
in subparagraph (E)(iii)(I)) for each peer cohort 
to be applied for such performance period. 
‘‘(G) PERIODIC REVIEW AND UPDATES.— 
‘‘(i) IN
GENERAL.—In carrying out 
this paragraph, under the system under this 
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subsection, there shall periodically be re-
viewed— 
‘‘(I) the quality measures and 
clinical practice improvement activi-
ties selected for inclusion in final core 
measure sets under this paragraph for 
each year such measures and activities 
are to be applied under this subsection 
or subsection (q) to ensure that such 
measures and activities continue to 
meet the conditions applicable to such 
measures and activities for such selec-
tion; and 
‘‘(II) the final core measure sets 
published under subparagraph (F) for 
each year such sets are to be applied to 
peer cohorts of eligible professionals to 
ensure that each applicable set con-
tinues to meet the conditions applica-
ble to such sets before being so pub-
lished. 
‘‘(ii) COLLABORATION
WITH
STAKE-
HOLDERS.—In carrying out clause (i), rel-
evant eligible professional organizations and 
other relevant stakeholders may identify 
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and submit updates to quality measures 
and clinical practice improvement activities 
selected under this paragraph for inclusion 
in final core measure sets as well as any 
additional quality measures and clinical 
practice improvement activities. Not later 
than November 15 of the year prior to the 
first day of a performance period, submis-
sions under this clause shall be reviewed. 
‘‘(iii) ADDITIONAL, AND UPDATES TO, 
MEASURES AND ACTIVITIES.—Based on the 
review conducted under this subparagraph 
for a period, as needed, there shall be— 
‘‘(I) selected additional, and up-
dates to, quality measures and clinical 
practice improvement activities selected 
under this paragraph for potential in-
clusion in final core measure sets in 
the same manner such quality meas-
ures and clinical practice improvement 
activities are selected under this para-
graph for such potential inclusion; 
‘‘(II) removed, from final core 
measure sets, quality measures and 
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clinical practice improvement activi-
ties that are no longer meaningful; and 
‘‘(III) updated final core measure 
sets published under subparagraph (F) 
in the same manner as such sets are 
approved under such subparagraph. 
For purposes of this subsection and sub-
section (q), a final core measure set, as up-
dated under this subparagraph, shall be 
treated in the same manner as a final core 
measure set published under subparagraph 
(F). 
‘‘(iv) TRANSPARENCY.— 
‘‘(I) 
NOTIFICATION
REQUIRED 
FOR CERTAIN UPDATES.—In the case of 
an update under subclause (II) or (III) 
of clause (iii) that adds, materially 
changes, or removes a measure or ac-
tivity from a measure set, such update 
shall not apply under this subsection 
or subsection (q) unless notification of 
such update is made available to ap-
plicable eligible professionals. 
‘‘(II) PUBLIC
AVAILABILITY
OF 
UPDATED
FINAL
CORE
MEASURE 
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SETS.—Subparagraph (E)(iii) shall 
apply with respect to measure sets up-
dated under subclause (II) or (III) of 
clause (iii) in the same manner as 
such subparagraph applies to applica-
ble core measure sets under subpara-
graph (E). 
‘‘(H) COORDINATION WITH EXISTING PRO-
GRAMS.—The development and selection of qual-
ity measures and clinical practice improvement 
activities under this paragraph shall, as appro-
priate, be coordinated with the development and 
selection of existing measures and requirements, 
such as the development of the Physician Com-
pare Website under subsection (m)(5)(G) and the 
application of resource use management under 
subsection (n). To the extent feasible, such meas-
ures and activities shall align with measures 
used by other payers and with measures and ac-
tivities in use under other programs in order to 
streamline the process of such development and 
selection under this paragraph. The Secretary 
shall develop a plan to integrate reporting on 
quality measures under this subsection with re-
porting requirements under subsection (o) relat-
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ing to the meaningful use of certified EHR tech-
nology. 
‘‘(I) CONSULTATION WITH RELEVANT ELIGI-
BLE PROFESSIONAL ORGANIZATIONS AND OTHER 
RELEVANT
STAKEHOLDERS.—Relevant eligible 
professional organizations (as defined in para-
graph (3)(D)) and other relevant stakeholders, 
including State and national medical societies, 
shall be consulted in carrying out this para-
graph. 
‘‘(J) OPTIONAL APPLICATION.—The process 
under section 1890A is not required to apply to 
the development or selection of measures under 
this paragraph.’’; and 
(F) in subsection (m)(3)(C)(i), by adding at 
the end the following new sentence: ‘‘Such process 
shall, beginning for 2019, treat eligible profes-
sionals in such a group practice as reporting on 
measures for purposes of application of sub-
sections (q) and (a)(8)(A)(iii) if, in lieu of re-
porting measures under subsection (k)(2)(D), the 
group practice reports measures determined ap-
propriate by the Secretary.’’. 
(3) ESTABLISHMENT OF QUALITY UPDATE INCEN-
TIVE PROGRAM.— 
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(A) IN GENERAL.—Section 1848 of the So-
cial Security Act (42 U.S.C. 1395w–4) is 
amended by adding at the end the following new 
subsection: 
‘‘(q) QUALITY UPDATE INCENTIVE PROGRAM.— 
‘‘(1) ESTABLISHMENT.— 
‘‘(A) IN GENERAL.—The Secretary shall es-
tablish an eligible professional quality update 
incentive program (in this section referred to as 
the ‘quality update incentive program’) under 
which— 
‘‘(i) there is developed and applied, in 
accordance with paragraph (2), appropriate 
methodologies for assessing the performance 
of eligible professionals with respect to qual-
ity measures and clinical practice improve-
ment activities included within the final 
core measure sets published under subsection 
(k)(9)(F) applicable to the peer cohorts of 
such providers; 
‘‘(ii) there is applied, consistent with 
the system under subsection (k), methods for 
collecting information needed for such as-
sessments (which shall involve the minimum 
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amount of administrative burden required 
to ensure reliable results); and 
‘‘(iii) the applicable update adjust-
ments under paragraph (3) are determined 
by such assessments. 
‘‘(B) DEFINITIONS.— 
‘‘(i) ELIGIBLE PROFESSIONAL.—In this 
subsection, the term ‘eligible professional’ 
has the meaning given such term in sub-
section (k)(3), except that such term shall 
not include a professional who has a pay-
ment arrangement described in section 
1848A(a)(1) in effect. 
‘‘(ii) PEER COHORTS; CLINICAL PRAC-
TICE
IMPROVEMENT
ACTIVITIES; ELIGIBLE 
PROFESSIONAL
ORGANIZATIONS.—In this 
subsection, the terms ‘peer cohort’, ‘clinical 
practice improvement activity’, and ‘eligible 
professional organization’ have the mean-
ings given such terms in subsection (k)(3). 
‘‘(C) CONSULTATION WITH ELIGIBLE PRO-
FESSIONAL
ORGANIZATIONS
AND
OTHER
REL-
EVANT
STAKEHOLDERS.—Eligible professional 
organizations and other relevant stakeholders, in-
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cluding State and national medical societies, 
shall be consulted in carrying out this subsection. 
‘‘(D) APPLICATION
AT
GROUP
PRACTICE 
LEVEL.—The Secretary shall establish a process, 
consistent with subsection (m)(3)(C), under 
which the provisions of this subsection are ap-
plied to eligible professionals in a group practice 
if the group practice reports measures deter-
mined appropriate by the Secretary under such 
subsection. 
‘‘(E) COORDINATION WITH EXISTING PRO-
GRAMS.—The application of measures and clin-
ical practice improvement activities and assess-
ment of performance under this subsection shall, 
as appropriate, be coordinated with the applica-
tion of measures and assessment of performance 
under other provisions of this section. 
‘‘(2) ASSESSING PERFORMANCE WITH RESPECT 
TO
FINAL
CORE
MEASURE
SETS
FOR
APPLICABLE 
PEER COHORTS.— 
‘‘(A) ESTABLISHMENT
OF
METHODS
FOR 
ASSESSMENT.— 
‘‘(i) IN GENERAL.—Under the quality 
update incentive program, the Secretary 
shall— 
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‘‘(I) establish one or more meth-
ods, applicable with respect to a per-
formance period, to assess (using a 
scoring scale of 0 to 100) the perform-
ance of an eligible professional with re-
spect to, subject to paragraph (1)(D), 
quality measures and clinical practice 
improvement activities included within 
the final core measure set published 
under subsection (k)(9)(F) applicable 
for the period to the peer cohort in 
which the provider self-identified under 
subsection (k)(9)(B) for such period; 
and 
‘‘(II) subject to paragraph (1)(D), 
compute a composite score for such 
provider for such performance period 
with respect to the measures and ac-
tivities included within such final core 
measure set. 
‘‘(ii) METHODS.—Such methods shall, 
with respect to an eligible professional, pro-
vide that the performance of such profes-
sional shall, subject to paragraph (1)(D), be 
assessed for a performance period with re-
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spect to the quality measures and clinical 
practice improvement activities within the 
final core measure set for such period for 
the peer cohort of such professional and on 
which information is collected from such 
professional. 
‘‘(iii) WEIGHTING
OF
MEASURES.— 
Such a method may provide for the assign-
ment of different scoring weights or, as ap-
propriate, other factors— 
‘‘(I) for quality measures and 
clinical practice improvement activi-
ties; 
‘‘(II) based on the type or cat-
egory of measure or activity; and 
‘‘(III) based on the extent to 
which a quality measure or clinical 
practice improvement activity mean-
ingfully assesses quality. 
‘‘(iv) RISK
ADJUSTMENT.—Such a 
method shall provide for appropriate risk 
adjustments. 
‘‘(v) INCORPORATION OF OTHER METH-
ODS OF MEASURING PHYSICIAN QUALITY.— 
In establishing such methods, there shall be, 
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as appropriate, incorporated comparable 
methods of measurement from physician 
quality incentive programs under this sub-
section. 
‘‘(B) PERFORMANCE PERIOD.—There shall 
be established a period (in this subsection re-
ferred to as a ‘performance period’), with respect 
to a year (beginning with 2019) for which the 
quality adjustment is applied under paragraph 
(3), to assess performance on quality measures 
and clinical practice improvement activities. 
Each such performance period shall be a period 
of 12 consecutive months and shall end as close 
as possible to the beginning of the year for which 
such adjustment is applied. 
‘‘(3) QUALITY
ADJUSTMENT
TAKING
INTO
AC-
COUNT QUALITY ASSESSMENTS.— 
‘‘(A) QUALITY ADJUSTMENT.—For purposes 
of subsection (d)(16), if the composite score com-
puted under paragraph (2)(A) for an eligible 
professional for a year (beginning with 2019) 
is— 
‘‘(i) a score of 67 or higher, the quality 
adjustment under this paragraph for the el-
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igible professional and year is 1 percentage 
point; 
‘‘(ii) a score of at least 34, but below 
67, the quality adjustment under this para-
graph for the eligible professional and year 
is zero; or 
‘‘(iii) a score below 34, the quality ad-
justment under this paragraph for the eligi-
ble professional and year is -1 percentage 
point. 
‘‘(B) NO EFFECT ON SUBSEQUENT YEARS’ 
QUALITY ADJUSTMENTS.—Each such quality ad-
justment shall be made each year without regard 
to the quality adjustment for a previous year 
under this paragraph. 
‘‘(4) TRANSITION FOR NEW ELIGIBLE PROFES-
SIONALS.—In the case of a physician, practitioner, or 
other supplier that during a performance period, with 
respect to a year for which a quality adjustment is 
applied under paragraph (3), first becomes an eligible 
professional (and had not previously submitted claims 
under this title as a person, as an entity, or as part 
of a physician group or under a different billing 
number or tax identifier), the quality adjustment 
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under this subsection applicable to such physician, 
practitioner, or supplier— 
‘‘(A) for such year, with respect to such first 
performance period, shall be zero; and 
‘‘(B) for a year, with respect to a subse-
quent performance period, shall be the quality 
adjustment that would otherwise be applied 
under this subsection. 
‘‘(5) FEEDBACK.— 
‘‘(A) FEEDBACK.— 
‘‘(i) ONGOING FEEDBACK.—Under the 
process under subsection (m)(5)(H), there 
shall be provided, as real time as possible, 
but at least quarterly, beginning not later 
than 6 months after the first day of the first 
performance period, to each eligible profes-
sional feedback— 
‘‘(I) on the performance of such 
provider with respect to quality meas-
ures and clinical practice improvement 
activities within the final core measure 
set 
published 
under 
subsection 
(k)(9)(F) for the applicable perform-
ance period and the peer cohort of such 
professional; and 
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‘‘(II) to assess the progress of such 
professional under the quality update 
incentive program with respect to a 
performance period for a year. 
‘‘(ii) USE OF REGISTRIES AND OTHER 
MECHANISMS.—Feedback under this sub-
paragraph shall, to the extent an eligible 
professional chooses to participate in a data 
registry for purposes of this subsection (in-
cluding registries under subsections (k) and 
(m)), be provided and based on performance 
received through the use of such registry, 
and to the extent that an eligible profes-
sional chooses not to participate in such a 
registry for such purposes, be provided 
through other similar mechanisms that 
allow for the provision of such feedback and 
receipt of such performance information. 
‘‘(B) DATA MECHANISM.—Under the quality 
update incentive program, there shall be devel-
oped an electronic interactive eligible profes-
sional mechanism through which such a profes-
sional may receive performance data, including 
data with respect to performance on the meas-
ures and activities developed and selected under 
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this section. Such mechanism shall be developed 
in consultation with private payers and health 
insurance 
issuers 
(as 
defined 
in 
section 
2791(b)(2) of the Public Health Service Act) as 
appropriate. 
‘‘(C) TRANSFER OF FUNDS.—The Secretary 
shall provide for the transfer of $100,000,000 
from the Federal Supplementary Medical Insur-
ance Trust Fund established in section 1841 to 
the Center for Medicare & Medicaid Services 
Program Management Account to support such 
efforts to develop the infrastructure as necessary 
to carry out subsection (k)(9) and this subsection 
and for purposes of section 1889(h). Such funds 
shall be so transferred on the date of the enact-
ment of this subsection and shall remain avail-
able until expended.’’. 
(B) INCENTIVE TO REPORT UNDER QUALITY 
UPDATE
INCENTIVE
PROGRAM.—Section 
1848(a)(8)(A) of the Social Security Act (42 
U.S.C. 1395w–4(a)(8)(A)) is amended— 
(i) in clause (i), by striking ‘‘With re-
spect to’’ and inserting ‘‘Subject to clause 
(iii), with respect to’’; and 
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(ii) by adding at the end the following 
new clause: 
‘‘(iii) APPLICATION TO ELIGIBLE PRO-
FESSIONALS NOT REPORTING.—With respect 
to covered professional services (as defined 
in subsection (k)(3)) furnished by an eligi-
ble professional during 2019 or any subse-
quent year, if the eligible professional does 
not submit data for the performance period 
(as defined in subsection (q)(2)(B)) with re-
spect to such year on, subject to subsection 
(q)(1)(D), the quality measures and, as ap-
plicable, clinical practice improvement ac-
tivities within the final core measure set 
under subsection (k)(9)(F) applicable to the 
peer cohort of such provider, the fee schedule 
amount for such services furnished by such 
professional during the year (including the 
fee schedule amount for purposes of deter-
mining a payment based on such amount) 
shall be equal to 95 percent (in lieu of the 
applicable percent) of the fee schedule 
amount that would otherwise apply to such 
services under this subsection (determined 
after application of paragraphs (3), (5), 
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and (7), but without regard to this para-
graph). The Secretary shall develop a min-
imum per year caseload threshold, with re-
spect to eligible professionals, and the pre-
vious sentence shall not apply to eligible 
professionals with a caseload for a year 
below such threshold for such year.’’. 
(C) EDUCATION
ON
QUALITY
UPDATE
IN-
CENTIVE PROGRAM.—Section 1889 of the Social 
Security Act (42 U.S.C. 1395zz) is amended by 
adding at the end the following new subsection: 
‘‘(h) QUALITY UPDATE INCENTIVE PROGRAM.—Under 
this section, information shall be disseminated to educate 
and assist eligible professionals (as defined in section 
1848(k)(3)) about the quality update incentive program 
under section 1848(q) and quality measures under section 
1848(k)(9) through multiple approaches, including a na-
tional dissemination strategy and outreach by medicare 
contractors.’’. 
(4) CONFORMING AMENDMENTS.— 
(A) TREATMENT
OF
SATISFACTORILY
RE-
PORTING PQRS MEASURES THROUGH PARTICIPA-
TION
IN
A
QUALIFIED
CLINICAL
DATA
REG-
ISTRY.—Section 1848(m)(3)(D) of the Social Se-
curity Act (42 U.S.C. 1395w–4(m)(3)(D)) is 
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amended by striking ‘‘For 2014 and subsequent 
years’’ and inserting ‘‘For each of 2014 through 
2018’’. 
(B) COORDINATING
ENHANCED
PQRS
RE-
PORTING WITH EHR.—Section 1848(o)(2)(B)(iii) 
of the Social Security Act (42 U.S.C. 1395w– 
4(o)(2)(B)(iii)) is amended by striking ‘‘sub-
section (k)(2)(C)’’ and inserting ‘‘subparagraph 
(C) or (D) of subsection (k)(2)’’. 
(C) COORDINATING
PQRS
REPORTING
PE-
RIOD
WITH
QUALITY
UPDATE
INCENTIVE
PRO-
GRAM
PERFORMANCE
PERIOD.—Section 
1848(m)(6)(C) of the Social Security Act (42 
U.S.C. 1395w–4(m)(6)(C)) is amended— 
(i) in clause (i), by striking ‘‘and 
(iii)’’ and inserting ‘‘, (iii), and (iv)’’; and 
(ii) by adding at the end the following 
new clause: 
‘‘(iv) COORDINATION
WITH
QUALITY 
UPDATE
INCENTIVE
PROGRAM.—For 2019 
and each subsequent year the reporting pe-
riod shall be coordinated with the perform-
ance period under subsection (q)(2)(B).’’. 
(D) COORDINATING EHR REPORTING WITH 
QUALITY
UPDATE
INCENTIVE
PROGRAM
PER-
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FORMANCE
PERIOD.—Section 1848(o)(5)(B) of 
the Social Security Act (42 U.S.C. 1395w– 
4(o)(5)(B)) is amended by adding at the end the 
following: ‘‘Beginning for 2019, the EHR report-
ing period shall be coordinated with the perform-
ance period under subsection (q)(2)(B).’’. 
(c) ADVANCING ALTERNATIVE PAYMENT MODELS.— 
(1) IN GENERAL.—Part B of title XVIII of the 
Social Security Act (42 U.S.C. 1395w–4 et seq.) is 
amended by adding at the end the following new sec-
tion: 
‘‘SEC. 1848A. ADVANCING ALTERNATIVE PAYMENT MODELS. 
‘‘(a) PAYMENT MODEL CHOICE PROGRAM.—Payment 
for covered professional services (as defined in section 
1848(k)) that are furnished by an eligible professional (as 
defined in such section) under an Alternative Payment 
Model specified on the list under subsection (h) (in this sec-
tion referred to as an ‘eligible APM’) shall be made under 
this title in accordance with the payment arrangement 
under such model. In applying the previous sentence, such 
a professional with such a payment arrangement in effect, 
shall be deemed for purposes of section 1848(a)(8) to be sat-
isfactorily submitting data on quality measures for such 
covered professional services. 
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‘‘(b) 
PROCESS
FOR
IMPLEMENTING
ELIGIBLE 
APMS.— 
‘‘(1) IN GENERAL.—For purposes of subsection 
(a) and in accordance with this section, the Secretary 
shall establish a process under which— 
‘‘(A) a contract is entered into, in accord-
ance with paragraph (2); 
‘‘(B) proposals for potential Alternative 
Payment Models are submitted in accordance 
with subsection (c); 
‘‘(C) Alternative Payment Models so pro-
posed are recommended, in accordance with sub-
section (d), for testing and evaluation, including 
through the demonstration program under sub-
section (e), and approval under subsection (f); 
‘‘(D) applicable Alternative Payment Mod-
els are tested and evaluated under such dem-
onstration program; 
‘‘(E) models are implemented as eligible 
APMs in accordance with subsection (f); and 
‘‘(F) a comprehensive list of all eligible 
APMs is made publicly available, in accordance 
with subsection (h), for application under sub-
section (a). 
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‘‘(2) CONTRACT WITH APM CONTRACTING ENTI-
TY.— 
‘‘(A) IN GENERAL.—For purposes of para-
graph (1)(A), the Secretary shall identify and 
have in effect a contract with an independent en-
tity that has appropriate expertise to carry out 
the functions applicable to such entity under this 
section. Such entity shall be referred to in this 
section as the ‘APM contracting entity’. 
‘‘(B) TIMING FOR FIRST CONTRACT.—The 
Secretary shall enter into the first contract under 
subparagraph (A) to be in effect January 1, 
2019. 
‘‘(C) 
COMPETITIVE
PROCEDURES.—Com-
petitive procedures (as defined in section 4(5) of 
the Office of Federal Procurement Policy Act (41 
U.S.C. 403(5)) shall be used to enter into a con-
tract under subparagraph (A). 
‘‘(c) SUBMISSION OF PROPOSED ALTERNATIVE PAY-
MENT MODELS.—Beginning not later than 90 days after 
the date the Secretary enters into a contract under sub-
section (b)(2) with the APM contracting entity, physicians, 
eligible professional organizations, health care provider or-
ganizations, and other entities may submit to the APM con-
tracting entity proposals for Alternative Payment Models 
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for application under this section. Such a proposal of a 
model shall include suggestions for measures to be used 
under subsection (e)(1)(B) for purposes of evaluating such 
model. In reviewing submissions under this subsection for 
purposes of making recommendations under subsection 
(d)(1), the contracting entity shall focus on submissions for 
such models that are intended to improve care coordination 
and quality for patients through modifying the manner in 
which physicians and other providers are paid under this 
title. 
‘‘(d) RECOMMENDATION BY APM CONTRACTING ENTI-
TY OF PROPOSED MODELS.— 
‘‘(1) RECOMMENDATION.— 
‘‘(A) RECOMMENDATIONS TO SECRETARY.— 
‘‘(i) IN GENERAL.—Under the process 
under subsection (b), the APM contracting 
entity shall at least quarterly recommend, 
in accordance with clause (ii), to the Sec-
retary— 
‘‘(I) Alternative Payment Models 
submitted under subsection (c) to be 
tested and evaluated through a dem-
onstration program under subsection 
(e); and 
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‘‘(II) Alternative Payment Models 
submitted under subsection (c) to be 
implemented under subsection (f) with-
out testing and evaluation through 
such a demonstration program. 
Such a recommendation under subclause (I) 
may be made with respect to a model for 
which a waiver would be required under 
paragraph (2). Any reference in this sub-
section to an Alternative Payment Model 
under this clause is a reference to such 
model as may be modified under clause 
(iii). 
‘‘(ii) 
REQUIREMENTS.—In 
recom-
mending an Alternative Payment Model 
under clause (i), each of the following shall 
apply: 
‘‘(I) The APM contracting entity 
may recommend an Alternative Pay-
ment Model under clause (i)(I) only if 
the entity determines that the model 
satisfies the criteria described in sub-
paragraph (B), including the criteria 
described in subparagraph (B)(iv). 
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‘‘(II) The APM contracting entity 
may recommend an Alternative Pay-
ment Model under clause (i)(II) only if 
the entity determines that the model 
satisfies the criteria described in sub-
paragraph (C), including the criteria 
described in subparagraph (C)(iii). 
‘‘(III) The APM contracting enti-
ty shall include with the recommended 
Alternative 
Payment 
Model 
rec-
ommendations for rules of coordination 
described in clause (v). 
‘‘(iii) MODIFICATIONS
BY
APM
CON-
TRACTING
ENTITY.—For purposes of this 
subparagraph, to the extent necessary to 
meet the applicable requirements of clause 
(ii), the APM contracting entity may mod-
ify an Alternative Payment Model sub-
mitted under subsection (c) to ensure that 
the model would— 
‘‘(I) reduce spending under this 
title without reducing the quality of 
care; or 
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‘‘(II) improve the quality of care 
without increasing spending under this 
title. 
‘‘(iv) FORMS
OF
MODIFICATIONS.— 
Such a modification under clause (iii) may 
include one or more of the following: 
‘‘(I) A change to the payment ar-
rangement under which eligible profes-
sionals participating in such model 
would be paid for covered professional 
services furnished under such model. 
‘‘(II) A change to the criteria for 
eligible professionals to be eligible to 
participate under such model in order 
to ensure that the requirement de-
scribed in subclause (I) or (II) is satis-
fied. 
‘‘(III) A change to the rules of co-
ordination described in clause (v). 
‘‘(IV) The application of a with-
hold mechanism under the payment ar-
rangement under which the distribu-
tion of withheld amounts is based on 
the success of the model in meeting 
spending reduction requirements. 
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‘‘(V) Such other change as the 
contracting entity may specify. 
‘‘(v) RULES OF COORDINATION FOR AP-
PLICATION
OF
PAYMENT
ARRANGEMENTS 
UNDER MODELS.— 
‘‘(I) IN
GENERAL.—Rules of co-
ordination described in this clause for 
an Alternative Payment Model shall be 
designed to determine, for purposes of 
applying subsection (a) and section 
1848(d)(16), under what circumstances 
an eligible professional is treated as 
having a payment arrangement under 
a particular model. 
‘‘(II) NONDUPLICATION
OF
PAY-
MENT.—Such rules of coordination 
shall ensure coordination and non-
duplication of payment of services that 
might be covered under more than one 
payment arrangement or under section 
1848(d)(16). 
‘‘(III) APPLICATION TO NON-APM 
PAYMENT.—In applying such rules of 
coordination for purposes of section 
1848(d)(16), an eligible professional 
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shall not be treated as having a pay-
ment arrangement in effect under such 
a model for any covered professional 
services not treated as furnished under 
the model. 
‘‘(B) CRITERIA FOR RECOMMENDING MOD-
ELS FOR DEMONSTRATION.—For purposes of sub-
paragraph (A)(ii)(I), the criteria described in 
this subparagraph, with respect to an Alter-
native Payment Model, are each of the following: 
‘‘(i) The model has been supported by 
meaningful clinical and non-clinical data, 
with respect to a sufficient population sam-
ple, that indicates the model would be suc-
cessful at addressing each of the abilities de-
scribed in clause (iv). 
‘‘(ii)(I) In the case of a model that has 
already been evaluated and supported by 
data with respect to a population of indi-
viduals enrolled under this part, if the 
model were evaluated under the demonstra-
tion under subsection (e) such a population 
would represent a sufficient number of indi-
viduals enrolled under this part to ensure a 
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meaningful evaluation of the likely effect of 
expanding the demonstration. 
‘‘(II) In the case of a model that has 
not been so evaluated and supported by 
data with respect to such a population, the 
population that would be furnished services 
under such model if the model were evalu-
ated under the demonstration under sub-
section (e) would represent a sufficient 
number of individuals enrolled under this 
part to ensure a meaningful evaluation of 
the likely effect of expanding the demonstra-
tion. 
‘‘(iii) Such model, including if tested 
and evaluated under the demonstration 
under subsection (e), would not deny or 
limit the coverage or provision of benefits 
under this title for applicable individuals. 
‘‘(iv) The proposal for such model dem-
onstrates— 
‘‘(I) the significant likelihood to 
successfully manage the cost of fur-
nishing items and services under this 
title so as to not result in expenditures 
under this title being greater than ex-
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penditures under this title if the APM 
were not implemented; and 
‘‘(II) the ability to maintain or 
improve the overall quality of patient 
care provided to individuals enrolled 
under this part. 
‘‘(v) The model provides for a payment 
arrangement— 
‘‘(I) that specifies the items and 
services covered under the arrangement 
and specifies rules of coordination de-
scribed in subparagraph (A)(v) be-
tween the items and services covered 
under the arrangement and other items 
and services not covered under the ar-
rangement; 
‘‘(II) in the case such payment 
arrangement does not provide for pay-
ment under the fee schedule under sec-
tion 1848 for such items and services 
furnished by such eligible professionals, 
that provides for a payment adjust-
ment based on meaningful EHR use 
comparable to such adjustment that 
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would otherwise apply under section 
1848; and 
‘‘(III) that provides for a pay-
ment adjustment based on quality 
measures comparable to such adjust-
ment that would otherwise apply under 
section 1848. 
‘‘(C) CRITERIA FOR RECOMMENDING MOD-
ELS
FOR
APPROVAL
WITHOUT
EVALUATION 
UNDER DEMONSTRATION.—For purposes of sub-
paragraph (A)(ii)(II), the criteria described in 
this subparagraph, with respect to an Alter-
native Payment Model, is that the model has al-
ready been tested and evaluated for a sufficient 
enough period and through such testing and 
evaluation the model was shown— 
‘‘(i) to have satisfied the criteria de-
scribed in each of clauses (i), (ii), (iii), and 
(v) of subparagraph (B); and 
‘‘(ii)(I) to have reduced spending 
under this title without reducing the quality 
of care; or 
‘‘(II) to have improved the quality of 
patient care without increasing such spend-
ing. 
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‘‘(D) TRANSPARENCY AND DISCLOSURES.— 
‘‘(i) DISCLOSURES.—Not later than 90 
days after receipt of a submission of a 
model under subsection (c) by the APM con-
tracting entity, the APM contracting entity 
shall submit to the Secretary and the model 
submitter and make publicly available a no-
tification on whether or not, and if so how, 
the model meets criteria for recommending 
such model under subparagraph (A), in-
cluding whether or not such model requires 
a waiver under paragraph (2). In the case 
that the APM contracting entity determines 
not to recommend such model under this 
paragraph, such notification shall include 
an explanation of the reasons for not mak-
ing such a recommendation. Any informa-
tion made publicly available pursuant to 
the previous sentence shall not include pro-
prietary data. 
‘‘(ii) SUBMISSION
OF
RECOMMENDED 
MODELS.—The APM contracting entity 
shall at least quarterly submit to the Sec-
retary, the Medicare Payment Advisory 
Commission, and the Chief Actuary of the 
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Centers for Medicare & Medicaid Services 
the following: 
‘‘(I) The models recommended 
under subparagraph (A)(i)(I), includ-
ing any such models that require a 
waiver under paragraph (2), and the 
data and analyses on such rec-
ommended models that support the cri-
teria described in subparagraph (B). 
‘‘(II) The models recommended 
under subparagraph (A)(i)(II) and the 
data and analyses on such rec-
ommended models that support the cri-
teria described in subparagraph (C). 
‘‘(iii) EXPLANATION
FOR
NO
REC-
OMMENDATIONS.—For any year beginning 
with 2015 that the APM contracting entity 
does not recommend any models under sub-
paragraph (A)(i), the entity shall instead 
satisfy this clause by submitting to the Sec-
retary and making publicly available an ex-
planation for not having any such rec-
ommendations. 
‘‘(iv) 
JUSTIFICATIONS
FOR
REC-
OMMENDATIONS.—In submitting data and 
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analyses under subclause (I) or (II) of 
clause (ii) with respect to a model, the APM 
contracting entity shall include a specific 
explanation of how the model would (and 
recommendations for ensuring that the 
model will) meet the criteria described in 
subparagraph (B) or (C), respectively. 
‘‘(v) CONFIRMATION OF SPENDING ES-
TIMATES
BY
CMS
CHIEF
ACTUARY.—For 
each Alternative Payment Model described 
in subclause (I) or (II) of clause (ii), the 
Chief Actuary of the Centers for Medicare & 
Medicaid Services shall submit to the Sec-
retary a determination of whether or not 
the Chief Actuary confirms that the model 
satisfies the criterion described in subpara-
graph (B)(iv)(I) or (C)(ii), respectively. 
‘‘(2) MODELS REQUIRING WAIVER APPROVAL.— 
‘‘(A) IN GENERAL.—In the case that an Al-
ternative Payment Model recommended under 
paragraph (1)(A)(i) would require a waiver 
from any requirement under this title, in deter-
mining approval of such model, the Secretary 
may make such a waiver solely in order for such 
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model to be tested and evaluated under the dem-
onstration program. 
‘‘(B) APPROVAL.—Not later than 180 days 
after the date of the receipt of such submission 
for a model, the Secretary shall notify the APM 
contracting entity and the entity submitting 
such model under subsection (c) whether or not 
such a waiver for such model is approved and 
the reason for any denial of such a waiver. 
‘‘(e) DEMONSTRATION.— 
‘‘(1) IN GENERAL.—Subject to paragraphs (5), 
(6), and (7), the Secretary may conduct a demonstra-
tion program, with respect to an Alternative Payment 
Model approved under paragraph (2), under which 
participating APM providers shall be paid under this 
title in accordance with the payment arrangement 
under such model and such model shall be evaluated 
by the independent evaluation entity under para-
graph (4). The duration of a demonstration program 
under this subsection, with respect to such a model, 
shall be 3 years. 
‘‘(2) APPROVAL BY SECRETARY OF MODELS FOR 
DEMONSTRATION.— 
‘‘(A) IN
GENERAL.—Not later than 180 
days after the date of receipt of a submission 
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under subsection (d)(1)(D)(ii), with respect to an 
Alternative Payment Model recommended under 
subsection (d)(1)(A)(i)(I), the Secretary shall— 
‘‘(i) review the basis for such rec-
ommendation in order to assess, taking into 
account the determination of the Chief Actu-
ary under subsection (d)(1)(D)(v) with re-
spect to such model, if the model is signifi-
cantly likely to— 
‘‘(I) reduce spending under this 
title without reducing the quality of 
care; or 
‘‘(II) improve the quality of care 
without increasing spending under this 
title; 
‘‘(ii) assess whether the model is sig-
nificantly likely to result in participation 
under such model of a sufficient number of 
those eligible professionals for whom the 
model was designed consistent with clause 
(i) to be able to evaluate the likely effect of 
expanding the demonstration; and 
‘‘(iii) approve such model for a dem-
onstration program under this subsection, 
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including as modified under subparagraph 
(B), only if the Secretary determines— 
‘‘(I) the model is significantly 
likely to satisfy the criterion described 
in subclause (I) or (II) of clause (i); 
‘‘(II) the model is significantly 
likely to result in the participation of 
a sufficient number of eligible profes-
sionals described in clause (ii); 
‘‘(III) the model applies rules of 
coordination described in subpara-
graph (C) applicable to such model; 
and 
‘‘(IV) the model satisfies the cri-
teria described in subsection (d)(1)(B). 
The Secretary shall periodically make available 
a list of such models approved under clause (iii). 
‘‘(B) MODIFICATIONS BY SECRETARY.— 
‘‘(i) BEFORE
APPROVAL.—For pur-
poses of subparagraph (A), the Secretary 
may modify an Alternative Payment Model 
recommended 
under 
subsection 
(d)(1)(A)(i)(I) to ensure that the model 
meets the requirements described in sub-
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paragraph (A)(iii). Such a modification 
may include one or more of the following: 
‘‘(I) A change to the payment ar-
rangement under which eligible profes-
sionals participating in such model 
would be paid for covered professional 
services furnished under such model. 
‘‘(II) A change to the criteria for 
eligible professionals to be eligible to 
participate under such model in order 
to ensure that such requirements are 
satisfied. 
‘‘(III) A change to the rules of co-
ordination described in subparagraph 
(C). 
‘‘(IV) The application of a with-
hold mechanism under the payment ar-
rangement under which the distribu-
tion of withheld amounts is based on 
the success of the model in meeting 
spending reduction requirements. 
‘‘(V) Such other change as the 
Secretary may specify. 
‘‘(ii) TERMINATION OR MODIFICATION 
DURING
DEMONSTRATION.—The Secretary 
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shall terminate or modify the design and 
implementation of an Alternative Payment 
Model 
approved 
under 
subparagraph 
(A)(iii) for a demonstration program, after 
testing has begun, unless the Secretary de-
termines (and the Chief Actuary of the Cen-
ters for Medicare & Medicaid Services, with 
respect to program spending under this 
title, certifies) that the model is expected to 
continue to satisfy the requirements de-
scribed in such paragraph relating to qual-
ity of care and reduced spending. Such ter-
mination may occur at any time after such 
testing has begun and before completion of 
the testing. 
‘‘(C) RULES OF COORDINATION FOR APPLI-
CATION
OF
PAYMENT
ARRANGEMENTS
UNDER 
MODELS.— 
‘‘(i) IN GENERAL.—Rules of coordina-
tion described in this subparagraph for an 
Alternative Payment Model shall be de-
signed to determine, for purposes of apply-
ing subsection (a) and section 1848(d)(16), 
under what circumstances an eligible profes-
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sional is treated as having a payment ar-
rangement under a particular model. 
‘‘(ii) NONDUPLICATION OF PAYMENT.— 
Such rules of coordination shall ensure co-
ordination and nonduplication of payment 
of services that might be covered under more 
than one payment arrangement or under 
section 1848(d)(16). 
‘‘(iii) APPLICATION TO NON-APM PAY-
MENT.—In applying such rules for purposes 
of section 1848(d)(16), an eligible profes-
sional shall not be treated as having a pay-
ment arrangement in effect under such a 
model for any covered professional services 
not treated as furnished under the model. 
‘‘(3) PARTICIPATING APM PROVIDERS.— 
‘‘(A) IN GENERAL.—To participate under a 
demonstration program under this subsection, 
with respect to an Alternative Payment Model, 
an eligible professional shall enter into a con-
tract with the Administrator of the Centers for 
Medicare & Medicaid Services under this sub-
section. For purposes of this section, such an eli-
gible professional who so participates under such 
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an Alternative Payment Model in this section is 
referred to as a ‘participating APM provider’. 
‘‘(B) REQUIREMENTS.—The Secretary shall 
establish criteria for eligible professionals to 
enter into contracts under this paragraph for 
purposes of participation under a demonstration 
program with respect to an Alternative Payment 
Model. Such criteria shall ensure participation 
under such model of a sufficient number of eligi-
ble professionals for whom the model was de-
signed in order to satisfy the criterion described 
in paragraph (2)(A)(iii)(II). 
‘‘(4) REPORTING AND EVALUATION.— 
‘‘(A) INDEPENDENT EVALUATION ENTITY.— 
Under this subsection, the Secretary shall enter 
into a contract with an independent entity to 
evaluate Alternative Payment Models under dem-
onstration programs under this subsection based 
on appropriate measures specified under sub-
paragraph (B). In this section, such entity shall 
be referred to as the ‘independent evaluation en-
tity’. Such contract shall be entered into in a 
timely manner so as to ensure evaluation of an 
Alternative Payment Model under a demonstra-
tion program under this subsection may begin as 
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soon as possible after the model is approved 
under paragraph (2). 
‘‘(B) PERFORMANCE MEASURES.—For pur-
poses of this subsection, the Secretary shall speci-
fy— 
‘‘(i) measures to evaluate Alternative 
Payment Models under demonstration pro-
grams under this subsection, which may in-
clude measures suggested under subsection 
(c) and shall be sufficient to allow for a 
comprehensive assessment of such a model; 
and 
‘‘(ii) quality measures on which par-
ticipating APM providers shall report, 
which shall be similar to measures applica-
ble under section 1848(k). 
‘‘(C) REPORTING REQUIREMENTS.—A con-
tract entered into with a participating APM 
provider under paragraph (3) shall require such 
provider to report on appropriate measures spec-
ified under subparagraph (B). 
‘‘(D) PERIODIC REVIEW.—The independent 
evaluation entity shall periodically review and 
analyze and submit such analysis to the Sec-
retary and the participating APM providers in-
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volved data reported under subparagraph (C) 
and such other data as deemed necessary to 
evaluate the model. 
‘‘(E) FINAL EVALUATION.—Not later than 6 
months after the date of completion of a dem-
onstration program, the independent evaluation 
entity shall submit to the Secretary, the Medi-
care Payment Advisory Commission, and the 
Chief Actuary of the Centers for Medicare & 
Medicaid Services (and make publicly available) 
a report on each model evaluated under such 
program. Such report shall include— 
‘‘(i) outcomes on the clinical and 
claims data received through such program 
with respect to such model; 
‘‘(ii) recommendations on— 
‘‘(I) whether or not such model 
should be implemented as an eligible 
APM under this section; or 
‘‘(II) whether or not the evalua-
tion of such model under the dem-
onstration program should be extended 
or expanded; 
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‘‘(iii) the justification for each such 
recommendation described in clause (ii); 
and 
‘‘(iv) in the case of a recommendation 
to implement such model as an eligible 
APM, recommendations on standardized 
rules for purposes of such implementation. 
‘‘(5) APPROVAL
OF
EXTENDING
EVALUATION 
UNDER
DEMONSTRATION.—Not later than 90 days 
after the date of receipt of a submission under para-
graph (4)(E), the Secretary shall, including based on 
a recommendation submitted under such paragraph, 
determine whether an Alternative Payment Model 
may be extended or expanded under the demonstra-
tion program. 
‘‘(6) TERMINATION.—The Secretary shall termi-
nate a demonstration program for a model under this 
subsection unless the Secretary determines (and the 
Chief Actuary of the Centers for Medicare & Medicaid 
Services, with respect to spending under this title, 
certifies), after testing has begun, that the model is ex-
pected to— 
‘‘(A) improve the quality of care (as deter-
mined by the Administrator of the Centers for 
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Medicare & Medicaid Services) without increas-
ing spending under this title; 
‘‘(B) reduce spending under this title with-
out reducing the quality of care; or 
‘‘(C) improve the quality of care and reduce 
spending. 
Such termination may occur at any time after such 
testing has begun and before completion of the testing. 
‘‘(7) FUNDING.— 
‘‘(A) IN
GENERAL.—There are appro-
priated, from amounts in the Federal Supple-
mentary Medical Insurance Trust Fund under 
section 1841 not otherwise appropriated and as 
of the date of the enactment of this section, 
$2,000,000,000 for the purposes described in sub-
paragraph (B), of which no more than 2.5 per-
cent may be used for the purpose described in 
clause (iii) of such subparagraph. Amounts ap-
propriated under this subparagraph shall be 
available until expended. 
‘‘(B) PURPOSES.—Amounts appropriated 
under subparagraph (A) shall be used for— 
‘‘(i) payments for items and services 
furnished by participating APM providers 
under an Alternative Payment Model under 
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a demonstration program under this sub-
section that— 
‘‘(I) would not otherwise be eligi-
ble for payment under this title; or 
‘‘(II) exceed the amount of pay-
ment that would otherwise be made for 
such items and services under this title 
if such items and services were not fur-
nished under such demonstration pro-
gram; 
‘‘(ii) the evaluations provided for 
under this section of models under such a 
demonstration program; 
‘‘(iii) payment to the APM contracting 
entity for carrying out its duties under this 
section; and 
‘‘(iv) for otherwise carrying out this 
subsection. 
‘‘(C) LIMITATION.—The amounts appro-
priated under subparagraph (A) are the only 
amounts authorized or appropriated to carry out 
the purposes described in subparagraph (B). 
‘‘(f) IMPLEMENTATION OF RECOMMENDED MODELS AS 
ELIGIBLE APMS.— 
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‘‘(1) ASSESSMENT.—With respect to each Alter-
native Payment Model recommended under subsection 
(d)(1)(A)(i)(II) or (e)(4)(E)(ii)(I), the Secretary shall 
review the basis for such recommendation and assess 
and determine, in consultation with the Chief Actu-
ary of the Centers for Medicare & Medicaid Services, 
whether the model is significantly likely to continue 
to result in meeting the criterion described in sub-
section (e)(2)(A)(iii)(I), with or without a modifica-
tion described in paragraph (5). 
‘‘(2) 
IMPLEMENTATION
THROUGH
RULE-
MAKING.— 
‘‘(A) PUBLICATION OF NPRM.—If the Sec-
retary determines that such a model is signifi-
cantly likely to meet such criterion, the Secretary 
shall publish as part of the applicable physician 
fee schedule rulemaking process (specified in 
paragraph (3)) a notice of proposed rulemaking 
to implement such model, including as modified 
under paragraph (5). 
‘‘(B) COMMENTS
BY
MEDPAC.—Not later 
than 90 days after the date of issuance of such 
notice with respect to a model, the Medicare 
Payment Advisory Commission shall submit 
comments on the proposed rule for such model to 
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Congress and to the Secretary. Such comments 
shall include an evaluation of the reports from 
the contracting entity and independent evalua-
tion entity on such model regarding the model’s 
impact on expenditures and quality of care 
under this title. 
‘‘(C) FINAL RULE AND CONDITIONS.—The 
Secretary shall publish as part of the applicable 
physician fee schedule rulemaking process (speci-
fied in paragraph (3)) a final notice imple-
menting such proposed rule, including as modi-
fied under paragraph (5), as an eligible APM 
only if— 
‘‘(i) the Secretary determines that such 
model is expected to— 
‘‘(I) reduce spending under this 
title without reducing the quality of 
care; or 
‘‘(II) improve the quality of pa-
tient care without increasing spending; 
‘‘(ii) the Chief Actuary of the Centers 
for Medicare & Medicaid Services certifies 
that such model would reduce (or would not 
result in any increase in) spending under 
this title; 
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‘‘(iii) the Secretary determines that 
such model would not deny or limit the cov-
erage or provision of benefits under this 
title for applicable individuals; 
‘‘(iv) the Secretary determines that the 
model is significantly likely to result in the 
participation of a sufficient number of ap-
propriate eligible professionals for whom the 
model was designed in order to satisfy the 
criterion 
described 
in 
subsection 
(d)(2)(A)(iii)(II); 
‘‘(v) the Secretary determines that the 
model applies rules of coordination de-
scribed in paragraph (6); and 
‘‘(vi) the Secretary determines that 
model meets such other criteria as the Sec-
retary may determine. 
‘‘(3) APPLICABLE
PHYSICIAN
FEE
SCHEDULE 
RULEMAKING PROCESS.—For purposes of paragraph 
(2), in the case of an Alternative Payment Model rec-
ommended 
under 
subsection 
(d)(1)(A)(ii) 
or 
(e)(4)(E)(ii)(I)— 
‘‘(A) on or before April 1 of a year, the ap-
plicable physician fee schedule rulemaking proc-
ess is the process for publication by November 1 
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of that year of the fee schedule amounts under 
this section for the succeeding year; or 
‘‘(B) after April 1 of a year, the applicable 
physician fee schedule rulemaking process is the 
process for publication by November 1 of the fol-
lowing year of the fee schedule amounts under 
this section for the second succeeding year. 
‘‘(4) JUSTIFICATION FOR DISAPPROVALS.—In the 
case that an Alternative Payment Model rec-
ommended 
under 
subsection 
(d)(1)(A)(ii) 
or 
(e)(4)(E)(ii)(I) is not implemented as an eligible 
APM under this subsection, the Secretary shall make 
publicly available the rational, in detail, for such de-
cision. 
‘‘(5) MODIFICATIONS BY SECRETARY.—For pur-
poses of this subsection, the Secretary may modify an 
Alternative Payment Model recommended under sub-
section (d)(1)(A)(i)(II) or (e)(4)(E)(ii)(I) to ensure 
that the model meets the requirements under para-
graph (1)(B). Such a modification may include one 
or more of the following: 
‘‘(A) A change to the payment arrangement 
under which eligible professionals participating 
in such model would be paid for covered profes-
sional services furnished under such model. 
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‘‘(B) A change to the criteria for eligible 
professionals to be eligible to participate under 
such model in order to ensure that such require-
ments are satisfied. 
‘‘(C) A change to the rules of coordination 
described in paragraph (6). 
‘‘(D) The application of a withhold mecha-
nism under the payment arrangement under 
which the distribution of withheld amounts is 
based on the success of the model in meeting 
spending reduction requirements. 
‘‘(E) Such other change as the Secretary 
may specify. 
‘‘(6) RULES OF COORDINATION FOR APPLICATION 
OF PAYMENT ARRANGEMENTS UNDER MODELS.— 
‘‘(A) IN GENERAL.—Rules of coordination 
described in this paragraph for an Alternative 
Payment Model shall be designed to determine, 
for purposes of applying subsection (a) and sec-
tion 1848(d)(16), under what circumstances an 
eligible professional is treated as having a pay-
ment arrangement under a particular model. 
‘‘(B) NONDUPLICATION OF PAYMENT.—Such 
rules of coordination shall ensure coordination 
and nonduplication of payment of services that 
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might be covered under more than one payment 
arrangement or under section 1848(d)(16). 
‘‘(C) APPLICATION TO NON-APM PAYMENT.— 
In applying such rules for purposes of section 
1848(d)(16), an eligible professional shall not be 
treated as having a payment arrangement in ef-
fect under such a model for any covered profes-
sional services not treated as furnished under the 
model. 
‘‘(g) PERIODIC REVIEW AND TERMINATION.— 
‘‘(1) PERIODIC REVIEW.—In the case of an Alter-
native Payment Model that has been implemented, the 
Secretary and the Chief Actuary of the Centers for 
Medicare & Medicaid Services shall review such 
model every 3 years to determine (and certify, in the 
case of the Chief Actuary and spending under this 
title), for the previous 3 years, whether the model 
has— 
‘‘(A) reduced the quality of care, or 
‘‘(B) increased spending under this title, 
compared to the quality of care or spending that 
would have resulted if the model had not been imple-
mented. 
‘‘(2) TERMINATION.— 
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‘‘(A) QUALITY OF CARE REDUCTION TERMI-
NATION.—If based upon such review the Sec-
retary determines under paragraph (1)(A) that 
the model has reduced the quality of care, the 
Secretary may terminate such model. 
‘‘(B) SPENDING INCREASE TERMINATION.— 
Unless such Chief Actuary certifies under para-
graph (1)(B) that the expenditures under this 
title under the model do not exceed the expendi-
tures that would otherwise have been made if the 
model had not been implemented for the period 
involved, the Secretary shall terminate such 
model. 
‘‘(h) DISSEMINATION
OF ELIGIBLE APMS.—Under 
this section there shall be established a process for speci-
fying, and making publicly available a list of, all eligible 
APMs, which shall include at least those implemented under 
subsection (f) and demonstrations carried out with respect 
to payments under section 1848 through authority in exist-
ence as of the day before the date of the enactment of this 
section. Under such process such list shall be periodically 
updated and, beginning with January 1, 2015, and annu-
ally thereafter, such list shall be published in the Federal 
Register.’’. 
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(2) 
CONFORMING
AMENDMENT.—Section 
1848(a)(1) of the Social Security Act (42 U.S.C. 
1395w–4(a)(1)) is amended by striking ‘‘shall in-
stead’’ and inserting ‘‘shall, subject to section 1848A, 
instead’’. 
(d) ADJUSTMENT
TO MEDICARE PAYMENT LOCAL-
ITIES.— 
(1) IN GENERAL.—Section 1848(e) of the Social 
Security Act (42 U.S.C. 1395w–4(e)) is amended by 
adding at the end the following new paragraph: 
‘‘(6) USE OF MSAS AS FEE SCHEDULE AREAS IN 
CALIFORNIA.— 
‘‘(A) IN
GENERAL.—Subject to the suc-
ceeding provisions of this paragraph and not-
withstanding the previous provisions of this sub-
section, for services furnished on or after Janu-
ary 1, 2017, the fee schedule areas used for pay-
ment under this section applicable to California 
shall be the following: 
‘‘(i) Each Metropolitan Statistical 
Area (each in this paragraph referred to as 
an ‘MSA’), as defined by the Director of the 
Office of Management and Budget as of De-
cember 31 of the previous year, shall be a 
fee schedule area. 
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‘‘(ii) All areas not included in an MSA 
shall be treated as a single rest-of-State fee 
schedule area. 
‘‘(B) TRANSITION FOR MSAS PREVIOUSLY IN 
REST-OF-STATE PAYMENT LOCALITY OR IN LO-
CALITY 3.— 
‘‘(i) IN
GENERAL.—For services fur-
nished in California during a year begin-
ning with 2017 and ending with 2021 in 
an MSA in a transition area (as defined in 
subparagraph (D)), subject to subparagraph 
(C), the geographic index values to be ap-
plied under this subsection for such year 
shall be equal to the sum of the following: 
‘‘(I) 
CURRENT
LAW
COMPO-
NENT.—The old weighting factor (de-
scribed in clause (ii)) for such year 
multiplied by the geographic index val-
ues under this subsection for the fee 
schedule area that included such MSA 
that would have applied in such area 
(as estimated by the Secretary) if this 
paragraph did not apply. 
‘‘(II) MSA-BASED COMPONENT.— 
The MSA-based weighting factor (de-
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scribed in clause (iii)) for such year 
multiplied by the geographic index val-
ues computed for the fee schedule area 
under subparagraph (A) for the year 
(determined without regard to this sub-
paragraph). 
‘‘(ii) OLD
WEIGHTING
FACTOR.—The 
old weighting factor described in this 
clause— 
‘‘(I) for 2017, is 5⁄6; and 
‘‘(II) for each succeeding year, is 
the old weighting factor described in 
this clause for the previous year minus 
1⁄6. 
‘‘(iii) MSA-BASED
WEIGHTING
FAC-
TOR.—The MSA-based weighting factor de-
scribed in this clause for a year is 1 minus 
the old weighting factor under clause (ii) 
for that year. 
‘‘(C) HOLD HARMLESS.—For services fur-
nished in a transition area in California during 
a year beginning with 2017, the geographic 
index values to be applied under this subsection 
for such year shall not be less than the cor-
responding geographic index values that would 
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have applied in such transition area (as esti-
mated by the Secretary) if this paragraph did 
not apply. 
‘‘(D) TRANSITION AREA DEFINED.—In this 
paragraph, the term ‘transition area’ means each 
of the following fee schedule areas for 2013: 
‘‘(i) The rest-of-State payment locality. 
‘‘(ii) Payment locality 3. 
‘‘(E) REFERENCES
TO
FEE
SCHEDULE 
AREAS.—Effective for services furnished on or 
after January 1, 2017, for California, any ref-
erence in this section to a fee schedule area shall 
be deemed a reference to a fee schedule area es-
tablished in accordance with this paragraph.’’. 
(2) CONFORMING AMENDMENT TO DEFINITION OF 
FEE SCHEDULE AREA.—Section 1848(j)(2) of the So-
cial Security Act (42 U.S.C. 1395w–4(j)(2)) is 
amended by striking ‘‘The term’’ and inserting ‘‘Ex-
cept as provided in subsection (e)(6)(D), the term’’. 
(e) RELATIVE VALUES UNDER THE MEDICARE PHYSI-
CIAN FEE SCHEDULE.— 
(1) ELIGIBLE
PHYSICIANS
REPORTING
SYSTEM 
TO IMPROVE ACCURACY OF RELATIVE VALUES.—Sec-
tion 1848(c) of the Social Security Act (42 U.S.C. 
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1395w–4(c)) is amended by adding at the end the fol-
lowing new paragraph: 
‘‘(7) PHYSICIAN REPORTING SYSTEM TO IMPROVE 
ACCURACY OF RELATIVE VALUES.— 
‘‘(A) IN GENERAL.—The Secretary shall im-
plement a system for the periodic reporting by 
physicians of data on the accuracy of relative 
values under this subsection, such as data relat-
ing to service volume and time. Such data shall 
be submitted in a form and manner specified by 
the Secretary and shall, as appropriate, incor-
porate data from existing sources of data, pa-
tient scheduling systems, cost accounting sys-
tems, and other similar systems. 
‘‘(B) IDENTIFICATION
OF
REPORTING
CO-
HORT.—Not later than January 1, 2015, the 
Secretary shall establish a mechanism for physi-
cians to participate under the reporting system 
under this paragraph, all of whom shall collec-
tively be referred to under this paragraph as the 
‘reporting group’. The reporting group shall in-
clude physicians across settings that collectively 
represent a range of specialties and practitioner 
types, furnish a range of physicians’ services, 
and serve a range of patient populations. 
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‘‘(C) INCENTIVE
TO
REPORT.—Under the 
system under this paragraph, the Secretary may 
provide for such payments under this part to 
physicians included in the reporting group as 
the Secretary determines appropriate to com-
pensate such physicians for reporting data under 
the system. Such payments shall be provided in 
such form and manner as specified by the Sec-
retary. In carrying out this subparagraph, re-
porting by such a physician under this para-
graph shall not be treated as the furnishing of 
physicians’ services for purposes of applying this 
section. 
‘‘(D) FUNDING.—To carry out this para-
graph (other than with respect to payments 
made under subparagraph (C)), in addition to 
funds otherwise appropriated, the Secretary shall 
provide for the transfer from the Federal Supple-
mentary Medical Insurance Trust Fund under 
section 1841 of $1,000,000 to the Centers for 
Medicare & Medicaid Services Program Manage-
ment Account for each fiscal year beginning with 
fiscal year 2014. Amounts transferred under this 
subparagraph for a fiscal year shall be available 
until expended.’’. 
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(2) 
RELATIVE
VALUE
ADJUSTMENTS
FOR 
MISVALUED PHYSICIANS’ SERVICES.— 
(A) IN GENERAL.—Section 1848(c)(2) of the 
Social Security Act (42 U.S.C. 1395w–4(c)(2)) is 
amended by adding at the end the following new 
subparagraph: 
‘‘(M) ADJUSTMENTS FOR MISVALUED PHYSI-
CIANS’ SERVICES.— 
‘‘(i) IN GENERAL.—Only with respect 
to fee schedules established for 2016, 2017, 
and 2018 (and not for subsequent years), 
the Secretary shall— 
‘‘(I) identify, based on the data 
reported under paragraph (8) and 
other relevant data, misvalued services 
for which adjustments to the relative 
values established under this para-
graph would result in a reduction in 
expenditures under the fee schedule 
under this section, with respect to such 
year, of not more than 1 percent of the 
projected amount of expenditures under 
such fee schedule for such year; and 
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‘‘(II) make such adjustments for 
each such year so as only to result in 
such a reduction for such year. 
‘‘(ii) NO
EFFECT
ON
SUBSEQUENT 
YEARS.—A reduction under this subpara-
graph for a year shall not affect any reduc-
tion for any subsequent year. 
‘‘(iii) RULE OF CONSTRUCTION RELAT-
ING TO UNDERVALUED CODES.—Nothing in 
this subparagraph shall be construed as pre-
venting the Secretary from increasing the 
relative values for codes that are under-
valued.’’. 
(B) 
BUDGET
NEUTRALITY.—Section 
1848(c)(2)(B)(v) of the Social Security Act (42 
U.S.C. 1395w–4(c)(2)(B)(v)) is amended by add-
ing at the end the following new subclause: 
‘‘(VIII) 
REDUCTIONS
FOR 
MISVALUED
PHYSICIANS’ SERVICES.— 
Reduced expenditures attributable to 
subparagraph (M) for fiscal years 
2016, 2017, and 2018.’’. 
(3) DISCLOSURE OF DATA USED TO ESTABLISH 
MULTIPLE
PROCEDURE
PAYMENT
REDUCTION
POL-
ICY.—The Secretary of Health and Human Services 
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shall make publicly available the data used to estab-
lish the multiple procedure payment reduction policy 
to the professional component of imaging services in 
the final rule published in the Federal Register, v. 77, 
n. 222, November 16, 2012, pages 68891-69380 under 
the physician fee schedule under section 1848 of the 
Social Security Act (42 U.S.C. 1395w–4). 
SEC. 3. EXPANDING AVAILABILITY OF MEDICARE DATA. 
(a) EXPANDING USES OF MEDICARE DATA BY QUALI-
FIED ENTITIES.— 
(1) IN GENERAL.—To the extent consistent with 
applicable information, privacy, security, and disclo-
sure laws, beginning with 2014, notwithstanding 
paragraph (4)(B) of section 1874(e) of the Social Se-
curity Act (42 U.S.C. 1395kk(e)) and the second sen-
tence of paragraph (4)(D) of such section, a qualified 
entity may use data received by such entity under 
such section, and information derived from the eval-
uation described in such paragraph (4)(D), for addi-
tional non-public analyses (as determined appro-
priate by the Secretary of Health and Human Serv-
ices) or provide or sell such data to registered or au-
thorized users and subscribers, including to providers 
of services and suppliers, for non-public use (includ-
ing for the purposes of assisting providers of services 
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and suppliers to develop and participate in quality 
and patient care improvement activities, including 
developing new models of care). 
(2) DEFINITIONS.—In this section: 
(A) The term ‘‘qualified entity’’ has the 
meaning given such term in section 1874(e)(2) of 
the Social Security Act (42 U.S.C. 1395kk(e)). 
(B) The terms ‘‘supplier’’ and ‘‘provider of 
services’’ have the meanings given such terms in 
subsections (d) and (u), respectively, of section 
1861 of the Social Security Act (42 U.S.C. 
1395x). 
(b) ACCESS TO MEDICARE DATA TO PROVIDERS OF 
SERVICES AND SUPPLIERS TO FACILITATE DEVELOPMENT 
OF ALTERNATIVE PAYMENT MODELS AND TO QUALIFIED 
CLINICAL DATA REGISTRIES TO FACILITATE QUALITY IM-
PROVEMENT.—Consistent with applicable laws and regula-
tions with respect to privacy and other relevant matters, 
the Secretary shall provide Medicare claims data (in a form 
and manner determined to be appropriate) to— 
(1) qualified entities, that may share with pro-
viders of services and suppliers that are registered or 
authorized users or subscribers, for non-public use in-
cluding to facilitate the development of new models of 
care (including development of Alternate Payment 
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Models under section 1848A of the Social Security 
Act, models for small group specialty practices, and 
care coordination models); and 
(2) qualified clinical data registries under sec-
tion 1848(m)(3)(E)) of the Social Security Act (42 
U.S.C. 1395w–4(m)(3)(E)) for purposes of linking 
such data with clinical outcomes data and performing 
and disseminating risk-adjusted, scientifically valid 
analysis and research to support quality improvement 
or patient safety, provided that any public reporting 
of identifiable provider data shall only be conducted 
with prior consent of such provider. 
SEC. 4. ENCOURAGING CARE COORDINATION AND MEDICAL 
HOMES. 
Section 1848(b) of the Social Security Act (42 U.S.C. 
1395w–4(b)) is amended by adding at the end the following 
new paragraph: 
‘‘(8) ENCOURAGING
CARE
COORDINATION
AND 
MEDICAL HOMES.— 
‘‘(A) IN GENERAL.—In order to promote the 
coordination of care by an applicable provider 
(as defined in subparagraph (B)) for individuals 
with complex chronic care needs who are fur-
nished items and services by multiple physicians 
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and other suppliers and providers of services, the 
Secretary shall— 
‘‘(i) develop one or more HCPCS codes 
for complex chronic care management serv-
ices for individuals with complex chronic 
care needs; and 
‘‘(ii) for such services furnished on or 
after January 1, 2015, by an applicable 
provider, make payment (as the Secretary 
determines to be appropriate) under the fee 
schedule under this section using such 
HCPCS codes. 
‘‘(B) APPLICABLE
PROVIDER
DEFINED.— 
For purposes of this paragraph, the term ‘appli-
cable provider’ means a physician (as defined in 
section 1861(r)(1)) or a physician assistant or 
nurse 
practitioner 
(as 
defined 
in 
section 
1861(aa)(5)(A)) who— 
‘‘(i) is certified as a medical home (by 
achieving an accreditation status of level 3 
by the National Committee for Quality As-
surance); 
‘‘(ii) is recognized as a patient-cen-
tered specialty practice by the National 
Committee for Quality Assurance; 
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‘‘(iii) has received equivalent certifi-
cation (as determined by the Secretary); or 
‘‘(iv) meets such other comparable 
qualifications as the Secretary determines 
to be appropriate. 
‘‘(C) BUDGET
NEUTRALITY.—The budget 
neutrality 
provision 
under 
subsection 
(c)(2)(B)(ii)(II) shall apply in establishing the 
payment under subparagraph (A)(ii). 
‘‘(D) SINGLE APPLICABLE PROVIDER PAY-
MENT.—In carrying out this paragraph, the Sec-
retary shall only make payment to a single ap-
plicable provider for complex chronic care man-
agement services furnished to an individual.’’. 
SEC. 5. MISCELLANEOUS. 
(a) SOLICITATIONS, RECOMMENDATIONS, AND RE-
PORTS.— 
(1) SOLICITATION
FOR
RECOMMENDATIONS
ON 
EPISODES OF CARE DEFINITION.—The Administrator 
of the Centers for Medicare & Medicaid Services shall 
request eligible professional organizations (as defined 
in section 1848(k)(3) of the Social Security Act (42 
U.S.C. 1395w–4(k)(3))) and other relevant stake-
holders to submit recommendations for defining non- 
acute related episodes of care for purposes of applying 
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such definition under subsections (k) and (q) of sec-
tion 1848 of the Social Security Act (42 U.S.C. 
1395w–4) and section 1848A of such Act, as added by 
subsections (b) and (c) of section 2. 
(2) SOLICITATION
FOR
RECOMMENDATIONS
ON 
PROVIDER FEE SCHEDULE PAYMENT BUNDLES.— 
(A) IN GENERAL.—The Administrator of the 
Centers for Medicare & Medicaid Services shall 
solicit from eligible professional organizations 
(as defined in section 1848(k)(3) of the Social 
Security Act (42 U.S.C. 1395w–4(k)(3))) rec-
ommendations for payment bundles for chronic 
conditions and expensive, high volume services 
for which payment is made under title XVIII of 
such Act. 
(B) REPORT TO CONGRESS.—Not later than 
24 months after the date of the enactment of this 
Act, the Administrator shall submit to Congress 
a report on proposals for such payment bundles. 
(3) REPORTS
ON
MODIFIED
PFS
SYSTEM
AND 
PAYMENT SYSTEM ALTERNATIVES.— 
(A) BIANNUAL
PROGRESS
REPORTS.—Not 
later than January 15, 2016, and annually 
thereafter, the Secretary of Health and Human 
Services shall submit to Congress and post on the 
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public Internet website of the Centers for Medi-
care & Medicaid Services a biannual progress re-
port— 
(i) on the implementation of para-
graph (9) of section 1848(k) of the Social 
Security Act (42 U.S.C. 1395w–4(k)), as 
added by section 2(b)(2), and the quality 
update incentive program under subsection 
(q) of section 1848 of the Social Security 
Act (42 U.S.C. 1395w–4), as added by sec-
tion 2(b)(3); 
(ii) that includes an evaluation of such 
paragraph and such quality update incen-
tive program and recommendations with re-
spect to such program and appropriate up-
date mechanisms; and 
(iii) on the actions taken to promote 
and fulfill the identification of eligible 
APMs under section 1848A of the Social Se-
curity Act, as added by section 2(c), for ap-
plication under such section 1848A. 
(B) GAO AND MEDPAC REPORTS.— 
(i) GAO REPORT ON INITIAL STAGES 
OF PROGRAM.—The Comptroller General of 
the United States shall submit to Congress 
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a report for 2019 and each subsequent year 
analyzing the extent to which the system 
under section 1848(k)(9) of the Social Secu-
rity Act (42 U.S.C. 1395w–4(k)(9)) and 
such quality update incentive program 
under section 1848(q) of the Social Security 
Act, as added by section 2(b) is successfully 
satisfying performance objectives, including 
with respect to— 
(I) the process for developing and 
selecting measures and activities under 
subsection (k)(9) of section 1848 of 
such Act (42 U.S.C. 1395w–4); 
(II) the process for assessing per-
formance against such measures and 
activities under subsection (q) of such 
section; and 
(III) the adequacy of the measures 
and activities so selected. 
(ii) EVALUATION BY GAO AND MEDPAC 
ON IMPLEMENTATION OF QUALITY UPDATE 
INCENTIVE PROGRAM.— 
(I) GAO.—The Comptroller Gen-
eral of the United States shall evaluate 
the initial phase of the quality update 
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incentive program under subsection (q) 
of section 1848 of the Social Security 
Act (42 U.S.C. 1395w–4) and shall 
submit to Congress, not later than 
2019, a report with recommendations 
for improving such quality update in-
centive program. 
(II) MEDPAC.—In the course of 
its March Report to Congress on Medi-
care payment policy, MedPAC shall 
analyze the initial phase of such qual-
ity update incentive program and 
make 
recommendations, 
as 
appro-
priate, for improving such quality up-
date incentive program. 
(iii) MEDPAC REPORT
ON
PAYMENT 
SYSTEM ALTERNATIVES.— 
(I) IN GENERAL.—Not later than 
June 15, 2016, the Medicare Payment 
Advisory Commission shall submit to 
Congress a report that analyzes mul-
tiple options for alternative payment 
models in lieu of section 1848 of the 
Social Security Act (42 U.S.C. 1395w– 
4). In analyzing such models, the 
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Medicare Payment Advisory Commis-
sion shall examine at least the fol-
lowing models: 
(aa) Accountable care orga-
nization payment models. 
(bb) Primary care medical 
home payment models. 
(cc) Bundled or episodic pay-
ments for certain conditions and 
services. 
(dd) Gainsharing arrange-
ments 
(II) ITEMS
TO
BE
INCLUDED.— 
Such report shall include information 
on how each recommended new pay-
ment model will achieve maximum 
flexibility to reward high quality, effi-
cient care. 
(C) TRACKING EXPENDITURE GROWTH AND 
ACCESS.—Beginning in 2015, the Chief Actuary 
of the Centers for Medicare & Medicaid Services 
shall track expenditure growth and beneficiary 
access to physicians’ services under section 1848 
of the Social Security Act (42 U.S.C. 1395w–4) 
and shall post on the public Internet website of 
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the Centers for Medicare & Medicaid Services 
annual reports on such topics. 
(4) REPORT
ON
CLINICAL
DECISION
SUPPORT 
MECHANISMS.—Not later than one year after the date 
of the enactment of this Act, the Secretary of Health 
and Human Services shall submit to Congress a re-
port on the extent to which clinical decision support 
mechanisms and other provider support tools could be 
used to further program objectives under section 1848 
of the Social Security Act (42 U.S.C. 1395w–4)) and 
recommendation for how such mechanisms and tools 
should be so used. 
(b) RULE
OF CONSTRUCTION REGARDING HEALTH 
CARE PROVIDER STANDARDS OF CARE.— 
(1) IN GENERAL.—The development, recognition, 
or implementation of any guideline or other standard 
under any Federal health care provision shall not be 
construed to establish the standard of care or duty of 
care owed by a health care provider to a patient in 
any medical malpractice or medical product liability 
action or claim. 
(2) DEFINITIONS.—For purposes of this sub-
section: 
(A) The term ‘‘Federal health care provi-
sion’’ means any provision of the Patient Protec-
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tion and Affordable Care Act (Public Law 111– 
148), title I and subtitle B of title III of the 
Health Care and Education Reconciliation Act 
of 2010 (Public Law 111–152), and titles XVIII 
and XIX of the Social Security Act. 
(B) The term ‘‘health care provider’’ means 
any individual or entity— 
(i) licensed, registered, or certified 
under Federal or State laws or regulations 
to provide health care services; or 
(ii) required to be so licensed, reg-
istered, or certified but that is exempted by 
other statute or regulation. 
(C) The term ‘‘medical malpractice or med-
ical liability action or claim’’ means a medical 
malpractice action or claim (as defined in sec-
tion 431(7) of the Health Care Quality Improve-
ment Act of 1986 (42 U.S.C. 11151(7))) and in-
cludes a liability action or claim relating to a 
health care provider’s prescription or provision 
of a drug, device, or biological product (as such 
terms are defined in section 201 of the Federal 
Food, Drug, and Cosmetic Act or section 351 of 
the Public Health Service Act). 
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(D) The term ‘‘State’’ includes the District 
of Columbia, Puerto Rico, and any other com-
monwealth, possession, or territory of the United 
States. 
(3) NO PREEMPTION.—No provision of the Pa-
tient Protection and Affordable Care Act (Public Law 
111–148), title I or subtitle B of title III of the 
Health Care and Education Reconciliation Act of 
2010 (Public Law 111–152), or title XVIII or XIX of 
the Social Security Act shall be construed to preempt 
any State or common law governing medical profes-
sional or medical product liability actions or claims. 
SEC. 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as 
the ‘‘SGR Repeal and Medicare Beneficiary 
Access Act of 2013’’. 
(b) TABLE OF CONTENTS.—The table of con-
tents for this Act is as follows: 
Sec. 1. Short title; table of contents. 
Sec. 2. Repealing the sustainable growth rate (SGR) and im-
proving medicare payment for physicians’ serv-
ices. 
Sec. 3. Priorities and funding for quality measure develop-
ment. 
Sec. 4. Encouraging care management for individuals with 
chronic care needs. 
Sec. 5. Ensuring accurate valuation of services under the phy-
sician fee schedule. 
Sec. 6. Promoting evidence-based care. 
Sec. 7. Empowering beneficiary choices through access to in-
formation on physicians’ services. 
Sec. 8. Expanding claims data availability to improve care. 
Sec. 9. Reducing administrative burden and other provisions. 
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SEC. 2. REPEALING THE SUSTAINABLE GROWTH RATE 
(SGR) AND IMPROVING MEDICARE PAYMENT 
FOR PHYSICIANS’ SERVICES. 
(a) STABILIZING FEE UPDATES.— 
(1) REPEAL OF SGR PAYMENT METHOD-
OLOGY.—Section 1848 of the Social Secu-
rity Act (42 U.S.C. 1395w–4) is amended— 
(A) in subsection (d)— 
(i) in paragraph (1)(A), by in-
serting ‘‘or a subsequent para-
graph’’ after ‘‘paragraph (4)’’; and 
(ii) in paragraph (4)— 
(I) in the heading, by in-
serting ‘‘AND ENDING WITH 2013’’ 
after ‘‘YEARS
BEGINNING
WITH 
2001’’; and 
(II) in subparagraph (A), 
by inserting ‘‘and ending with 
2013’’ after ‘‘a year beginning 
with 2001’’; and 
(B) in subsection (f)— 
(i) in paragraph (1)(B), by in-
serting ‘‘through 2013’’ after ‘‘of 
each succeeding year’’; and 
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(ii) in paragraph (2), by in-
serting ‘‘and ending with 2013’’ 
after ‘‘beginning with 2000’’. 
(2) UPDATE OF RATES FOR 2014 AND SUB-
SEQUENT YEARS.—Subsection (d) of section 
1848 of the Social Security Act (42 U.S.C. 
1395w–4) is amended by adding at the 
end the following new paragraphs: 
‘‘(15) UPDATE FOR 2014 THROUGH 2016.— 
The update to the single conversion fac-
tor established in paragraph (1)(C) for 
each of 2014 through 2016 shall be 0.5 
percent. 
‘‘(16) UPDATE FOR 2017 THROUGH 2023.— 
The update to the single conversion fac-
tor established in paragraph (1)(C) for 
each of 2017 through 2023 shall be zero 
percent. 
‘‘(17) UPDATE FOR 2024 AND SUBSEQUENT 
YEARS.—The update to the single conver-
sion factor established in paragraph 
(1)(C) for 2024 and each subsequent year 
shall be— 
‘‘(A) for items and services fur-
nished by a qualifying APM partici-
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pant (as defined in section 1833(z)(2)) 
for such year, 2 percent; and 
‘‘(B) for other items and services, 
1 percent.’’. 
(3) MEDPAC REPORTS.— 
(A) 
INITIAL
REPORT.—Not 
later 
than July 1, 2016, the Medicare Pay-
ment Advisory Commission shall sub-
mit to Congress a report on the rela-
tionship between— 
(i) physician and other health 
professional utilization and ex-
penditures (and the rate of in-
crease of such utilization and ex-
penditures) of items and services 
for which payment is made under 
section 1848 of the Social Security 
Act (42 U.S.C. 1395w–4); and 
(ii) total utilization and ex-
penditures (and the rate of in-
crease of such utilization and ex-
penditures) under parts A, B, and 
D of title XVIII of such Act. 
Such report shall include a method-
ology to describe such relationship 
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and the impact of changes in such 
physician and other health profes-
sional practice and service ordering 
patterns on total utilization and ex-
penditures under parts A, B, and D of 
such title. 
(B) FINAL REPORT.—Not later than 
July 1, 2020, the Medicare Payment 
Advisory Commission shall submit to 
Congress a report on the relationship 
described in subparagraph (A), in-
cluding the results determined from 
applying the methodology included in 
the report submitted under such sub-
paragraph. 
(b) CONSOLIDATION
OF CERTAIN CURRENT 
LAW
PERFORMANCE
PROGRAMS
WITH
NEW 
VALUE-BASED
PERFORMANCE
INCENTIVE
PRO-
GRAM.— 
(1) EHR MEANINGFUL
USE
INCENTIVE 
PROGRAM.— 
(A) SUNSETTING SEPARATE MEANING-
FUL USE PAYMENT ADJUSTMENTS.—Sec-
tion 1848(a)(7)(A) of the Social Secu-
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rity Act (42 U.S.C. 1395w–4(a)(7)(A)) is 
amended— 
(i) in clause (i), by striking ‘‘or 
any subsequent payment year’’ 
and inserting ‘‘or 2016’’; 
(ii) in clause (ii)— 
(I) 
in 
the 
matter 
pre-
ceding subclause (I), by strik-
ing ‘‘Subject to clause (iii), 
for’’ and inserting ‘‘For’’; 
(II) in subclause (I), by 
adding at the end ‘‘and’’; 
(III) in subclause (II), by 
striking ‘‘; and’’ and inserting 
a period; and 
(IV) by striking subclause 
(III); and 
(iii) by striking clause (iii). 
(B) CONTINUATION OF MEANINGFUL 
USE
DETERMINATIONS
FOR
VBP
PRO-
GRAM.—Section 1848(o)(2) of the So-
cial Security Act (42 U.S.C. 1395w– 
4(o)(2)) is amended— 
(i) in subparagraph (A), in the 
matter preceding clause (i)— 
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(I) by striking ‘‘For pur-
poses of paragraph (1), an’’ 
and inserting ‘‘An’’; and 
(II) by inserting ‘‘, or pur-
suant to subparagraph (D) for 
purposes of subsection (q), for 
a performance period under 
such subsection for a year’’ 
after ‘‘under such subsection 
for a year’’; and 
(ii) by adding at the end the 
following new subparagraph: 
‘‘(D) CONTINUED
APPLICATION
FOR 
PURPOSES OF VBP PROGRAM.—With re-
spect to 2017 and each subsequent 
payment year, the Secretary shall, for 
purposes of subsection (q) and in ac-
cordance with paragraph (1)(F) of 
such subsection, determine whether 
an eligible professional who is a VBP 
eligible professional (as defined in 
subsection (q)(1)(C)) for such year is a 
meaningful EHR user under this 
paragraph for the performance pe-
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riod under subsection (q) for such 
year.’’. 
(2) QUALITY REPORTING.— 
(A) SUNSETTING SEPARATE QUALITY 
REPORTING
INCENTIVES.—Section 
1848(a)(8)(A) of the Social Security 
Act (42 U.S.C. 1395w–4(a)(8)(A)) is 
amended— 
(i) in clause (i), by striking ‘‘or 
any subsequent year’’ and insert-
ing ‘‘or 2016’’; and 
(ii) in clause (ii)(II), by strik-
ing ‘‘and each subsequent year’’. 
(B) 
CONTINUATION
OF
QUALITY 
MEASURES AND PROCESSES FOR VBP PRO-
GRAM.—Section 1848 of the Social Se-
curity Act (42 U.S.C. 1395w–4) is 
amended— 
(i) in subsection (k), by adding 
at the end the following new 
paragraph: 
‘‘(9) CONTINUED APPLICATION FOR PUR-
POSES
OF
VBP
PROGRAM.—The Secretary 
shall, in accordance with subsection 
(q)(1)(F), carry out the provisions of this 
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subsection for purposes of subsection 
(q).’’; and 
(ii) in subsection (m)— 
(I) by redesignating the 
paragraph (7) added by sec-
tion 10327(a) of Public Law 
111-148 as paragraph (8); and 
(II) by adding at the end 
the following new paragraph: 
‘‘(9) CONTINUED APPLICATION FOR PUR-
POSES
OF
VBP
PROGRAM.—The Secretary 
shall, in accordance with subsection 
(q)(1)(F), carry out the processes under 
this subsection for purposes of subsection 
(q).’’. 
(3) VALUE-BASED PAYMENTS.— 
(A) SUNSETTING
SEPARATE
VALUE- 
BASED PAYMENTS.—Clause (iii) of sec-
tion 1848(p)(4)(B) of the Social Secu-
rity Act (42 U.S.C. 1395w–4(p)(4)(B)) is 
amended to read as follows: 
‘‘(iii) APPLICATION.—The Sec-
retary shall apply the payment 
modifier established under this 
subsection for items and services 
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furnished on or after January 1, 
2015, but before January 1, 2017, 
with respect to specific physi-
cians and groups of physicians 
the Secretary determines appro-
priate. Such payment modifier 
shall not be applied for items and 
services furnished on or after 
January 1, 2017.’’. 
(B) CONTINUATION OF VALUE-BASED 
PAYMENT MODIFIER MEASURES FOR VBP 
PROGRAM.—Section 1848(p) of the So-
cial Security Act (42 U.S.C. 1395w– 
4(p)) is amended— 
(i) in paragraph (2), by adding 
at the end the following new sub-
paragraph: 
‘‘(C) CONTINUED
APPLICATION
FOR 
PURPOSES OF VBP PROGRAM.—The Sec-
retary shall, in accordance with sub-
section (q)(1)(F), carry out subpara-
graph (B) for purposes of subsection 
(q).’’ ; and 
(ii) in paragraph (3), by add-
ing at the end the following: 
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‘‘With respect to 2017 and each 
subsequent year, the Secretary 
shall, in accordance with sub-
section (q)(1)(F), carry out this 
paragraph for purposes of sub-
section (q).’’. 
(c) VALUE-BASED PERFORMANCE INCENTIVE 
PROGRAM.— 
(1) IN GENERAL.—Section 1848 of the 
Social Security Act (42 U.S.C. 1395w–4) is 
amended by adding at the end the fol-
lowing new subsection: 
‘‘(q) VALUE-BASED PERFORMANCE INCENTIVE 
PROGRAM.— 
‘‘(1) ESTABLISHMENT.— 
‘‘(A) IN
GENERAL.—Subject to the 
succeeding provisions of this sub-
section, the Secretary shall establish 
an eligible professional value-based 
performance incentive program (in 
this subsection referred to as the 
‘VBP program’) under which the Sec-
retary shall— 
‘‘(i) develop a methodology for 
assessing the total performance of 
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101 
each VBP eligible professional ac-
cording to performance standards 
under paragraph (3) for a per-
formance period (as established 
under paragraph (4)) for a year; 
‘‘(ii) using such methodology, 
provide for a composite perform-
ance score in accordance with 
paragraph (5) for each such pro-
fessional for each performance 
period; and 
‘‘(iii) use such composite per-
formance score of the VBP eligi-
ble professional for a perform-
ance period for a year to make 
VBP program incentive payments 
under paragraph (7) to the profes-
sional for the year. 
‘‘(B) PROGRAM
IMPLEMENTATION.— 
The VBP program shall apply to pay-
ments for items and services fur-
nished on or after January 1, 2017. 
‘‘(C) VBP ELIGIBLE
PROFESSIONAL 
DEFINED.— 
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‘‘(i) IN GENERAL.—For purposes 
of 
this 
subsection, 
subject 
to 
clauses (ii) and (iv), the term ‘VBP 
eligible professional’ means— 
‘‘(I) for the first and sec-
ond years for which the VBP 
program applies to payments 
(and for the performance pe-
riod for such first and second 
year), a physician (as defined 
in section 1861(r)(1)), a physi-
cian assistant, nurse practi-
tioner, and clinical nurse spe-
cialist (as such terms are de-
fined in section 1861(aa)(5)), 
and 
a 
certified 
registered 
nurse anesthetist (as defined 
in section 1861(bb)(2)); and 
‘‘(II) for the third year for 
which the VBP program ap-
plies to payments (and for the 
performance period for such 
third year) and for each suc-
ceeding year (and for the per-
formance 
period 
for 
each 
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103 
such year), the professionals 
described in subclause (I) and 
such 
other 
eligible 
profes-
sionals (as defined in sub-
section (k)(3)(B)) as specified 
by the Secretary. 
‘‘(ii) 
EXCLUSIONS.—For 
pur-
poses of clause (i), the term ‘VBP 
eligible professional’ does not in-
clude, with respect to a year, an 
eligible professional (as defined 
in subsection (k)(3)(B))— 
‘‘(I) who is a qualifying 
APM participant (as defined 
in section 1833(z)(2)); 
‘‘(II) who, subject to clause 
(vii), is a partial qualifying 
APM participant (as defined 
in clause (iii)) for the most re-
cent period for which data 
are available and who, for the 
performance period with re-
spect to such year, does not 
report on applicable measures 
and activities described in 
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paragraph (2)(B) that are re-
quired to be reported by such 
a professional under the VBP 
program; or 
‘‘(III) who, for the per-
formance period with respect 
to such year, does not exceed 
the 
low-volume 
threshold 
measurement selected under 
clause (iv). 
‘‘(iii) PARTIAL QUALIFYING APM 
PARTICIPANT.—For 
purposes 
of 
this subparagraph, the term ‘par-
tial qualifying APM participant’ 
means, with respect to a year, an 
eligible professional for whom the 
Secretary determines the min-
imum payment percentage (or 
percentages), as applicable, de-
scribed in paragraph (2) of sec-
tion 1833(z) for such year have 
not been satisfied, but who would 
be considered a qualifying APM 
participant (as defined in such 
paragraph) for such year if— 
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‘‘(I) with respect to 2017 
and 2018, the reference in 
subparagraph 
(A) 
of 
such 
paragraph to 25 percent was 
instead a reference to 20 per-
cent; 
‘‘(II) with respect to 2019 
and 2020— 
‘‘(aa) the reference in 
subparagraph 
(B)(i) 
of 
such paragraph to 50 per-
cent was instead a ref-
erence to 40 percent; and 
‘‘(bb) the references in 
subparagraph 
(B)(ii) 
of 
such paragraph to 50 per-
cent and 25 percent of 
such paragraph were in-
stead references to 40 per-
cent and 20 percent, re-
spectively; and 
‘‘(III) with respect to 2021 
and subsequent years— 
‘‘(aa) the reference in 
subparagraph 
(C)(i) 
of 
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such paragraph to 75 per-
cent was instead a ref-
erence to 50 percent; and 
‘‘(bb) the references in 
subparagraph 
(C)(ii) 
of 
such paragraph to 75 per-
cent and 25 percent of 
such paragraph were in-
stead references to 50 per-
cent and 20 percent, re-
spectively. 
‘‘(iv) SELECTION
OF
LOW-VOL-
UME
THRESHOLD
MEASUREMENT.— 
The Secretary shall select one of 
the following low-volume thresh-
old measurements to apply for 
purposes of clause (ii)(III): 
‘‘(I) The minimum number 
(as determined by the Sec-
retary) of individuals enrolled 
under this part who are treat-
ed by the VBP eligible profes-
sional for the performance pe-
riod involved. 
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‘‘(II) The minimum num-
ber (as determined by the Sec-
retary) of items and services 
furnished to individuals en-
rolled under this part by such 
professional for such perform-
ance period. 
‘‘(III) 
The 
minimum 
amount (as determined by the 
Secretary) of allowed charges 
billed by such professional 
under this part for such per-
formance period. 
‘‘(v) TREATMENT OF NEW MEDI-
CARE
ENROLLED
ELIGIBLE
PROFES-
SIONALS.—In the case of a profes-
sional who first becomes a Medi-
care enrolled eligible professional 
during the performance period 
for a year (and had not previously 
submitted claims under this title 
such as a person, an entity, or a 
part of a physician group or 
under a different billing number 
or tax identifier), such profes-
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sional shall not be treated under 
this subsection as a VBP eligible 
professional until the subsequent 
year and performance period for 
such subsequent year. 
‘‘(vi) 
CLARIFICATION.—In 
the 
case of items and services fur-
nished during a year by an indi-
vidual who is not a VBP eligible 
professional (including pursuant 
to clauses (ii) and (v)) with re-
spect to a year, in no case shall a 
reduction under paragraph (6) or 
a VBP program incentive pay-
ment under paragraph (7) apply 
to such individual for such year. 
‘‘(vii) PARTIAL QUALIFYING APM 
PARTICIPANT
CLARIFICATION.—In 
the case of an eligible profes-
sional who is a partial qualifying 
APM participant, with respect to 
a year, and who for the perform-
ance period for such year reports 
on applicable measures and ac-
tivities described in paragraph 
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(2)(B) that are required to be re-
ported by such a professional 
under the VBP program, such eli-
gible professional is considered to 
be a VBP eligible professional 
with respect to such year. 
‘‘(D) APPLICATION TO GROUP PRAC-
TICES.— 
‘‘(i) IN
GENERAL.—Under the 
VBP program: 
‘‘(I) QUALITY PERFORMANCE 
CATEGORY.—The 
Secretary 
shall establish and apply a 
process that includes features 
of 
the 
provisions 
of 
sub-
section (m)(3)(C) for VBP eli-
gible professionals in a group 
practice with respect to as-
sessing performance of such 
group with respect to the per-
formance category described 
in clause (i) of paragraph 
(2)(A). 
‘‘(II) OTHER
PERFORMANCE 
CATEGORIES.—The 
Secretary 
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may establish and apply a 
process that includes features 
of 
the 
provisions 
of 
sub-
section (m)(3)(C) for VBP eli-
gible professionals in a group 
practice with respect to as-
sessing the performance of 
such group with respect to 
the 
performance 
categories 
described 
in 
clauses 
(ii) 
through (iv) of such para-
graph. 
‘‘(ii) ENSURING COMPREHENSIVE-
NESS
OF
GROUP
PRACTICE
ASSESS-
MENT.—The 
process 
established 
under clause (i) shall to the ex-
tent practicable reflect the full 
range of items and services fur-
nished by the VBP eligible profes-
sionals in the group practice in-
volved. 
‘‘(iii) CLARIFICATION.—VBP eli-
gible professionals electing to be 
a virtual group under paragraph 
(5)(J) shall not be considered VBP 
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eligible professionals in a group 
practice for purposes of applying 
this subparagraph. 
‘‘(E) USE
OF
REGISTRIES.—Under 
the VBP program, the Secretary shall 
encourage the use of qualified clin-
ical data registries pursuant to sub-
section (m)(3)(E) in carrying out this 
subsection. 
‘‘(F) APPLICATION OF CERTAIN PRO-
VISIONS.—In applying a provision of 
subsection (k), (m), (o), or (p) for pur-
poses of this subsection, the Sec-
retary shall— 
‘‘(i) adjust the application of 
such provision to ensure the pro-
vision is consistent with the pro-
visions of this subsection; and 
‘‘(ii) not apply such provision 
to the extent that the provision is 
duplicative with a provision of 
this subsection. 
‘‘(2) MEASURES
AND
ACTIVITIES
UNDER 
PERFORMANCE CATEGORIES.— 
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‘‘(A) PERFORMANCE
CATEGORIES.— 
Under the VBP program, the Sec-
retary shall use the following per-
formance categories (each of which is 
referred to in this subsection as a 
performance 
category) 
in 
deter-
mining the composite performance 
score under paragraph (5): 
‘‘(i) Quality. 
‘‘(ii) Resource use. 
‘‘(iii) 
Clinical 
practice 
im-
provement activities. 
‘‘(iv) Meaningful use of cer-
tified EHR technology. 
‘‘(B) 
MEASURES
AND
ACTIVITIES 
SPECIFIED
FOR
EACH
CATEGORY.—For 
purposes of paragraph (3)(A) and sub-
ject to subparagraph (C), measures 
and activities specified for a perform-
ance period (as established under 
paragraph (4)) for a year are as fol-
lows: 
‘‘(i) 
QUALITY.—For 
the 
per-
formance category described in 
subparagraph (A)(i), the quality 
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measures established for such pe-
riod under subsections (k) and 
(m), including under subsection 
(m)(3)(E), and the measures of 
quality of care established for 
such 
period 
under 
subsection 
(p)(2). 
‘‘(ii) RESOURCE
USE.—For the 
performance category described 
in subparagraph (A)(ii), the meas-
urement of resource use for such 
period under subsection (p)(3), 
using the methodology under sub-
section (r), as appropriate, and, as 
feasible and applicable, account-
ing for the cost of covered part D 
drugs. 
‘‘(iii) CLINICAL
PRACTICE
IM-
PROVEMENT
ACTIVITIES.—For 
the 
performance category described 
in subparagraph (A)(iii), clinical 
practice improvement activities 
under subcategories specified by 
the Secretary for such period, 
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which shall include at least the 
following: 
‘‘(I) The subcategory of ex-
panded practice access, which 
shall include activities such 
as same day appointments for 
urgent needs and after hours 
access to clinician advice. 
‘‘(II) The subcategory of 
population 
management, 
which shall include activities 
such 
as 
monitoring 
health 
conditions of individuals to 
provide timely health care 
interventions or participation 
in a qualified clinical data 
registry. 
‘‘(III) The subcategory of 
care coordination, which shall 
include 
activities 
such 
as 
timely communication of test 
results, timely exchange of 
clinical 
information 
to 
pa-
tients and other providers, 
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and use of remote monitoring 
or telehealth. 
‘‘(IV) The subcategory of 
beneficiary 
engagement, 
which shall include activities 
such as the establishment of 
care 
plans 
for 
individuals 
with complex care needs, ben-
eficiary 
self-management 
training, and using shared de-
cision-making mechanisms. 
‘‘(V) The subcategory of 
patient safety and practice as-
sessment, such as through use 
of clinical or surgical check-
lists and practice assessments 
related to maintaining certifi-
cation. 
‘‘(VI) The subcategory of 
participation in an alternative 
payment model (as defined in 
section 1833(z)(3)(C)). 
In establishing activities under 
this clause, the Secretary shall 
give consideration to the cir-
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cumstances 
of 
small 
practices 
(consisting of fewer than 20 pro-
fessionals) and practices located 
in rural areas and in health pro-
fessional shortage areas (as des-
ignated under section 332(a)(1)(A) 
of the Public Health Service Act). 
‘‘(iv) MEANINGFUL
EHR
USE.— 
For the performance category de-
scribed in subparagraph (A)(iv), 
the requirements established for 
such 
period 
under 
subsection 
(o)(2) for determining whether an 
eligible professional is a meaning-
ful EHR user. 
‘‘(C) ADDITIONAL PROVISIONS.— 
‘‘(i) 
EMPHASIZING
OUTCOME 
MEASURES
UNDER
QUALITY
PER-
FORMANCE CATEGORY.—In applying 
subparagraph 
(B)(i), 
the 
Sec-
retary shall, as feasible, empha-
size the application of outcome 
measures. 
‘‘(ii) 
APPLICATION
OF
ADDI-
TIONAL
SYSTEM
MEASURES.—The 
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Secretary may use measures used 
for a payment system other than 
for physicians for purposes of the 
performance category described 
in subparagraph (A)(i). 
‘‘(iii) GLOBAL AND POPULATION- 
BASED
MEASURES.—The Secretary 
may use global measures, such as 
global outcome measures, and 
population-based 
measures 
for 
purposes of the performance cat-
egory described in subparagraph 
(A)(i). 
‘‘(iv) REQUEST
FOR
INFORMA-
TION
FOR
CLINICAL
PRACTICE
IM-
PROVEMENT
ACTIVITIES.—In 
ini-
tially 
applying 
subparagraph 
(B)(iii), the Secretary shall use a 
request for information to solicit 
recommendations 
from 
stake-
holders for identifying activities 
described in such subparagraph 
and specifying criteria for such 
activities. 
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‘‘(v) CONTRACT AUTHORITY FOR 
CLINICAL
PRACTICE
IMPROVEMENT 
ACTIVITIES
PERFORMANCE
CAT-
EGORY.—In 
applying 
subpara-
graph (B)(iii), the Secretary may 
contract with entities to assist the 
Secretary in— 
‘‘(I) identifying activities 
described 
in 
subparagraph 
(B)(iii); 
‘‘(II) specifying criteria for 
such activities; and 
‘‘(III) determining wheth-
er a VBP eligible professional 
meets such criteria. 
‘‘(vi) APPLICATION OF MEASURES 
AND
ACTIVITIES
TO
NON-PATIENT- 
FACING
PROVIDERS.—In 
carrying 
out this paragraph, with respect 
to measures and activities speci-
fied in subparagraph (B) for per-
formance categories described in 
subparagraph (A), the Secretary— 
‘‘(I) shall give consider-
ation to the circumstances of 
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professional types (or subcat-
egories of those types deter-
mined by practice character-
istics) who typically provide 
services that do not involve 
face-to-face interaction with a 
patient; and 
‘‘(II) may, to the extent 
feasible and appropriate, take 
into 
account 
such 
cir-
cumstances and apply under 
this subsection with respect 
to VBP eligible professionals 
of such professional types or 
subcategories, in lieu of such 
a measure or activity, a com-
parable measure or activity 
that fulfills the goals of the 
applicable performance cat-
egory. 
In carrying out the previous sen-
tence, the Secretary shall consult 
with professionals of such profes-
sional types or subcategories. 
‘‘(3) PERFORMANCE STANDARDS.— 
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ginning of such year and be as close as 
possible to such year. In this subsection, 
such performance period (or periods) for 
a year shall be referred to as the per-
formance period for the year. 
‘‘(5) COMPOSITE PERFORMANCE SCORE.— 
‘‘(A) IN
GENERAL.—Subject to the 
succeeding provisions of this para-
graph and consistent with section 
2(g)(2) of the SGR Repeal and Medi-
care Beneficiary Access Act of 2013, 
the Secretary shall develop a method-
ology for assessing the total perform-
ance of each VBP eligible profes-
sional 
according 
to 
performance 
standards under paragraph (3) with 
respect to applicable measures and 
activities 
specified 
in 
paragraph 
(2)(B) with respect to each perform-
ance category applicable to such pro-
fessional for a performance period (as 
established under paragraph (4)) for 
a year. Using such methodology, the 
Secretary shall provide for a com-
posite assessment (in this subsection 
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referred to as the ‘composite perform-
ance score’) for each such profes-
sional for each performance period. 
‘‘(B) WEIGHTING PERFORMANCE CAT-
EGORIES, MEASURES, AND
ACTIVITIES.— 
Under the methodology under sub-
paragraph (A), the Secretary— 
‘‘(i) may assign different scor-
ing weights (including a weight of 
0) for— 
‘‘(I) each performance cat-
egory based on the extent to 
which the category is applica-
ble to the type of eligible pro-
fessional involved; and 
‘‘(II) each measure and ac-
tivity specified under para-
graph (2)(B) with respect to 
each such category based on 
the extent to which the meas-
ure or activity is applicable to 
the type of eligible profes-
sional involved; and 
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‘‘(ii) with respect to the per-
formance category described in 
paragraph (2)(A)(i)— 
‘‘(I) shall assign a higher 
scoring weight to outcomes 
measures than to other meas-
ures and increase the scoring 
weight for outcome measures 
over time; and 
‘‘(II) may assign a higher 
scoring weight to patient ex-
perience measures. 
‘‘(C) INCENTIVE
TO
REPORT; 
EN-
COURAGING
USE
OF
CERTIFIED
EHR 
TECHNOLOGY
FOR
REPORTING
QUALITY 
MEASURES.— 
‘‘(i) INCENTIVE
TO
REPORT.— 
Under the methodology estab-
lished under subparagraph (A), 
the Secretary shall provide that 
in the case of a VBP eligible pro-
fessional who fails to report on an 
applicable measure or activity 
that is required to be reported by 
the professional, the professional 
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shall be treated as achieving the 
lowest potential score applicable 
to such measure or activity. 
‘‘(ii) ENCOURAGING USE OF CER-
TIFIED
EHR
TECHNOLOGY
FOR
RE-
PORTING
QUALITY
MEASURES.— 
Under the methodology estab-
lished under subparagraph (A), 
the Secretary shall— 
‘‘(I) encourage VBP eligi-
ble professionals to report on 
applicable measures with re-
spect to the performance cat-
egory described in paragraph 
(2)(A)(i) through the use of 
certified EHR technology; and 
‘‘(II) with respect to a per-
formance period, with respect 
to a year, for which a VBP eli-
gible 
professional 
reports 
such measures through the 
use of such EHR technology, 
treat such professional as sat-
isfying the clinical quality 
measures reporting require-
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ment described in subsection 
(o)(2)(A)(iii) for such year. 
‘‘(D) CLINICAL
PRACTICE
IMPROVE-
MENT
ACTIVITIES
PERFORMANCE 
SCORE.— 
‘‘(i) 
RULE
FOR
ACCREDITA-
TION.—A VBP eligible professional 
who is in a practice that is cer-
tified as a patient-centered med-
ical home or comparable specialty 
practice pursuant to subsection 
(b)(8)(B)(i) with respect to a per-
formance period shall be given 
the highest potential score for the 
performance category described 
in paragraph (2)(A)(iii) for such 
period. 
‘‘(ii) APM PARTICIPATION.—Par-
ticipation by a VBP eligible pro-
fessional in an alternative pay-
ment model (as defined in section 
1833(z)(3)(C)) with respect to a 
performance period shall earn 
such eligible professional one-half 
of the highest potential score for 
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the 
performance 
category 
de-
scribed in paragraph (2)(A)(iii) 
for 
such 
performance 
period. 
Nothing in the previous sentence 
shall prevent such professional 
from earning more than one-half 
of such highest potential score for 
such performance period by per-
forming additional activities with 
respect to such performance cat-
egory. 
‘‘(iii) SUBCATEGORIES.—A VBP 
eligible professional shall not be 
required to perform activities in 
each 
subcategory 
under 
para-
graph (2)(B)(iii) to achieve the 
highest potential score for the 
performance category described 
in paragraph (2)(A)(iii). 
‘‘(E) DISTRIBUTION.—The Secretary 
shall ensure that the application of 
the methodology developed under 
subparagraph (A) results in a contin-
uous 
distribution 
of 
performance 
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scores, which shall result in differen-
tial payments under paragraph (7). 
‘‘(F) ACHIEVEMENT
AND
IMPROVE-
MENT.— 
‘‘(i) TAKING
INTO
ACCOUNT
IM-
PROVEMENT.—Beginning with the 
second year to which the VBP 
program applies, in addition to 
the achievement score of a VBP 
eligible professional, the method-
ology developed under subpara-
graph (A)— 
‘‘(I) in the case of the per-
formance score for the per-
formance category described 
in clauses (i) and (ii) of para-
graph (2)(A), shall take into 
account the improvement of 
the professional; and 
‘‘(II) in the case of per-
formance scores for other per-
formance categories, may take 
into account the improvement 
of the professional. 
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‘‘(ii) ASSIGNING HIGHER WEIGHT 
FOR
ACHIEVEMENT.—Beginning 
with the fourth year to which the 
VBP program applies, under the 
methodology 
developed 
under 
subparagraph (A), the Secretary 
may 
assign 
a 
higher 
scoring 
weight under subparagraph (B) 
with respect to the achievement 
score of a VBP eligible profes-
sional with respect to a measure 
or activity specified under para-
graph (2)(B) (or with respect to 
such a measure or activity and 
with respect to categories de-
scribed in paragraph (2)(A)) than 
to any improvement score applied 
under clause (i) with respect to 
such measure or activity (or such 
measure 
or 
activity 
and 
cat-
egories). 
‘‘(G) WEIGHTS
FOR
THE
PERFORM-
ANCE CATEGORIES.— 
‘‘(i) IN
GENERAL.—Under the 
methodology 
developed 
under 
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subparagraph 
(A), 
subject 
to 
clauses (ii) and (iii), the com-
posite performance score shall be 
determined as follows: 
‘‘(I) QUALITY.— 
‘‘(aa) 
IN
GENERAL.— 
Subject to item (bb), 30 
percent 
of 
such 
score 
shall be based on perform-
ance with respect to the 
category 
described 
in 
clause (i) of paragraph 
(2)(A). 
‘‘(bb) FIRST
YEARS 
AND
TEST
YEAR.—For the 
first and second years for 
which the VBP program 
applies to payments, 60 
percent 
of 
such 
score 
shall be based on perform-
ance with respect to the 
category 
described 
in 
clause (i) of paragraph 
(2)(A). With respect to the 
subsequent year, the per-
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cent 
described 
in 
item 
(aa) of such score shall be 
based 
on 
performance 
with respect to such cat-
egory only for purposes of 
feedback and 60 percent 
of such score shall be 
based 
on 
performance 
with respect to such cat-
egory for any other pur-
pose 
under 
this 
sub-
section. 
‘‘(II) RESOURCE USE.— 
‘‘(aa) 
IN
GENERAL.— 
Subject to item (bb), 30 
percent 
of 
such 
score 
shall be based on perform-
ance with respect to the 
category 
described 
in 
clause (ii) of paragraph 
(2)(A). 
‘‘(bb) FIRST
YEARS 
AND
TEST
YEAR.—For the 
first and second years for 
which the VBP program 
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applies to payments, zero 
percent 
of 
such 
score 
shall be based on perform-
ance with respect to the 
category 
described 
in 
clause (ii) of paragraph 
(2)(A). With respect to the 
subsequent year, the per-
cent 
described 
in 
item 
(aa) of such score shall be 
based 
on 
performance 
with respect to such cat-
egory only for purposes of 
feedback and zero percent 
of such score shall be 
based 
on 
performance 
with respect to such cat-
egory for any other pur-
pose 
under 
this 
sub-
section. 
‘‘(III) 
CLINICAL
PRACTICE 
IMPROVEMENT
ACTIVITIES.—Fif-
teen percent of such score 
shall be based on perform-
ance with respect to the cat-
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egory described in clause (iii) 
of paragraph (2)(A). 
‘‘(IV) MEANINGFUL
USE
OF 
CERTIFIED
EHR
TECHNOLOGY.— 
Twenty-five percent of such 
score shall be based on per-
formance with respect to the 
category described in clause 
(iv) of paragraph (2)(A). 
‘‘(ii) AUTHORITY TO ADJUST PER-
CENTAGES
IN
CASE
OF
HIGH
EHR 
MEANINGFUL
USE
ADOPTION.—In 
any year in which the Secretary 
estimates that the proportion of 
eligible professionals (as defined 
in 
subsection 
(o)(5)) 
who 
are 
meaningful EHR users (as deter-
mined under subsection (o)(2)) is 
75 percent or greater, the Sec-
retary may reduce the percent ap-
plicable under clause (i)(IV), but 
not below 15 percent. If the Sec-
retary makes such reduction for a 
year, the percentages applicable 
under one or more of subclauses 
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(I), (II), and (III) of clause (i) for 
such year (or, in the case of a 
year 
described 
in 
clause 
(i)(II)(bb), applicable under one 
or more of subclauses (I) and 
(III)) shall be increased in a man-
ner such that the total percentage 
points of the increase under this 
clause for such year equals the 
total number of percentage points 
reduced under the preceding sen-
tence for such year. 
‘‘(iii) 
AUTHORITY
TO
ADJUST 
PERCENTAGES FOR QUALITY AND RE-
SOURCE
USE.—Other than for a 
year 
described 
in 
clause 
(i)(II)(bb), 
the 
percentages 
de-
scribed in subclauses (I) and (II) 
of clause (i), including after appli-
cation of clause (ii), shall be 
equal. 
‘‘(H) RESOURCE
USE.—Analysis of 
the performance category described 
in paragraph (2)(A)(ii) shall include 
results from the methodology de-
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scribed in subsection (r)(5), as appro-
priate. 
‘‘(I) INCLUSION OF QUALITY MEASURE 
DATA FROM MULTIPLE PAYERS.—In ap-
plying subsections (k), (m), and (p) 
with respect to measures described in 
paragraph (2)(B)(i), analysis of the 
performance category described in 
paragraph (2)(A)(i) may include data 
submitted by VBP eligible profes-
sionals with respect to multiple pay-
ers. 
‘‘(J) USE
OF
VOLUNTARY
VIRTUAL 
GROUPS FOR CERTAIN ASSESSMENT PUR-
POSES.— 
‘‘(i) IN
GENERAL.—In the case 
of 
VBP 
eligible 
professionals 
electing to be a virtual group 
under clause (ii) with respect to a 
performance period for a year, for 
purposes of applying the method-
ology under subparagraph (A)— 
‘‘(I) the assessment of per-
formance 
provided 
under 
such methodology with re-
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spect to the performance cat-
egories described in clauses 
(i) and (ii) of paragraph (2)(A) 
that is to be applied to each 
such 
professional 
in 
such 
group for such performance 
period shall be with respect to 
the combined performance of 
all such professionals in such 
group for such period; and 
‘‘(II) the composite score 
provided 
under 
this 
para-
graph for such performance 
period with respect to each 
such 
performance 
category 
for each such VBP eligible 
professional in such virtual 
group shall be based on the 
assessment of the combined 
performance under subclause 
(I) for the performance cat-
egory and performance pe-
riod. 
‘‘(ii) ELECTION OF PRACTICES TO 
BE
A
VIRTUAL
GROUP.—The Sec-
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may not be changed during 
such performance period; and 
‘‘(II) a practice described 
in such clause, and each VBP 
eligible professional in such 
practice, may elect to be in no 
more than one virtual group 
for a performance period. 
‘‘(6) FUNDING FOR VBP PROGRAM INCEN-
TIVE PAYMENTS.— 
‘‘(A) TOTAL AMOUNT FOR INCENTIVE 
PAYMENTS.—The total amount for VBP 
program incentive payments under 
paragraph (7) for all VBP eligible pro-
fessionals for a year shall be equal to 
the total amount of the performance 
funding pool for all VBP eligible pro-
fessionals under subparagraph (B) for 
such year, as estimated by the Sec-
retary. 
‘‘(B) 
PERFORMANCE
FUNDING 
POOL.— 
‘‘(i) IN
GENERAL.—In the case 
of items and services furnished by 
a VBP eligible professional during 
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a year (beginning with 2017), the 
otherwise applicable fee schedule 
amount (as defined in clause (iii)) 
with respect to such items and 
services and eligible professional 
for such year shall be reduced by 
the 
applicable 
percent 
under 
clause (ii). The total amount of 
such reductions for a year shall 
be referred to in this subsection 
as the ‘performance funding pool’ 
for such year. 
‘‘(ii) APPLICABLE
PERCENT
DE-
FINED.—For purposes of clause (i), 
the 
term 
‘applicable 
percent’ 
means— 
‘‘(I) for 2017, 4 percent; 
‘‘(II) for 2018, 6 percent; 
‘‘(III) for 2019, 8 percent; 
‘‘(IV) for 2020, 10 percent; 
and 
‘‘(V) for 2021 and subse-
quent years, a percent speci-
fied by the Secretary (but in 
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no case less than 10 percent 
or more than 12 percent). 
‘‘(iii) 
OTHERWISE
APPLICABLE 
FEE
SCHEDULE
AMOUNT.—For pur-
poses of this subparagraph and 
paragraph (7), the term ‘other-
wise 
applicable 
fee 
schedule 
amount’ means, with respect to 
items and services furnished by a 
VBP eligible professional during a 
year, the fee schedule amount for 
such items and services and year 
that would otherwise apply (with-
out application of this subpara-
graph or paragraph (7)) with re-
spect to such eligible professional 
under subsection (b), after appli-
cation of subsection (a)(3), or 
under another fee schedule under 
this part. 
‘‘(7) VBP 
PROGRAM
INCENTIVE
PAY-
MENTS.— 
‘‘(A) VBP PROGRAM INCENTIVE PAY-
MENT
ADJUSTMENT
FACTOR.—Con-
sistent with section 2(g)(2) of the SGR 
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Repeal and Medicare Beneficiary Ac-
cess Act of 2013, the Secretary shall 
specify a VBP program incentive pay-
ment adjustment factor for each VBP 
eligible professional for a year. Such 
VBP program incentive payment ad-
justment factor for a VBP eligible 
professional for a year shall be deter-
mined— 
‘‘(i) by the composite perform-
ance score of the eligible profes-
sional for such year; 
‘‘(ii) in a manner such that the 
adjustment 
factors 
specified 
under this subparagraph for a 
year results in differential pay-
ments under this paragraph re-
flecting the full range of the dis-
tribution of composite perform-
ance scores of VBP eligible pro-
fessionals determined under para-
graph (5)(E) for such year, with 
such professionals having higher 
composite performance scores re-
ceiving higher payment; and 
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‘‘(iii) in a manner such that 
the adjustment factors specified 
under this subparagraph for a 
year— 
‘‘(I) does not result in a 
payment reduction for such 
year by an amount that ex-
ceeds the applicable percent 
described 
in 
paragraph 
(6)(B)(ii) for such year; and 
‘‘(II) does not result in a 
payment increase for such 
year by an amount that ex-
ceeds the applicable percent 
described 
in 
paragraph 
(6)(B)(ii) for such year. 
‘‘(B) CALCULATION OF VBP PROGRAM 
INCENTIVE
PAYMENT
AMOUNTS.—The 
VBP 
program 
incentive 
payment 
amount with respect to items and 
services furnished by a VBP eligible 
professional during a year shall be 
equal to the difference between— 
‘‘(i) the product of— 
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‘‘(I) the VBP program in-
centive payment adjustment 
factor determined under sub-
paragraph (A) for such VBP 
eligible professional for such 
year; and 
‘‘(II) the otherwise appli-
cable fee schedule amount (as 
defined 
in 
paragraph 
(6)(B)(iii)) 
with 
respect 
to 
such items and services and 
eligible professional for such 
year; and 
‘‘(ii) the otherwise applicable 
fee schedule amount, as reduced 
under paragraph (6)(B), with re-
spect to such items and services, 
eligible professional, and year. 
The application of the preceding sen-
tence may result in the VBP program 
incentive payment amount being 0.0 
with respect to an item or service fur-
nished by a VBP eligible professional. 
‘‘(C) APPLICATION OF VBP PROGRAM 
INCENTIVE
PAYMENT
AMOUNT.—In the 
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case of items and services furnished 
by a VBP eligible professional during 
a year (beginning with 2017), the oth-
erwise 
applicable 
fee 
schedule 
amount, as reduced under paragraph 
(6)(B), with respect to such items and 
services and eligible professional for 
such year shall be increased, if appli-
cable, by the VBP program incentive 
payment amount determined under 
subparagraph (B) with respect to 
such items and services, professional, 
and year. 
‘‘(D) 
BUDGET
NEUTRALITY.—In 
specifying the VBP program incentive 
payment adjustment factor for each 
VBP eligible professional for a year 
under subparagraph (A), the Sec-
retary shall ensure that the total 
amount of VBP program incentive 
payment amounts under this para-
graph for all VBP eligible profes-
sionals in a year shall be equal to the 
performance funding pool for such 
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‘‘(10) PUBLIC REPORTING.— 
‘‘(A) IN
GENERAL.—The Secretary 
shall, in an easily understandable for-
mat, make available on the Physician 
Compare Internet website under sub-
section (t) the following: 
‘‘(i) Information regarding the 
performance of VBP eligible pro-
fessionals under the VBP pro-
gram, which— 
‘‘(I) shall include the com-
posite score for each such 
VBP eligible professional and 
the performance of each such 
VBP eligible professional with 
respect to each performance 
category; and 
‘‘(II) may include the per-
formance of each such VBP el-
igible professional with re-
spect to each measure or ac-
tivity specified in paragraph 
(2)(B). 
‘‘(ii) The names of eligible pro-
fessionals in eligible alternative 
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payment models (as defined in 
section 1833(z)(3)(D)) and, to the 
extent feasible, the names of such 
eligible alternative payment mod-
els and performance of such mod-
els. 
‘‘(B) 
DISCLOSURE.—The 
informa-
tion made available under this para-
graph shall indicate, where appro-
priate, that publicized information 
may not be representative of the eli-
gible 
professional’s 
entire 
patient 
population, the variety of services 
furnished by the eligible professional, 
or the health conditions of individ-
uals treated. 
‘‘(C) OPPORTUNITY TO REVIEW AND 
SUBMIT
CORRECTIONS.—The Secretary 
shall provide for an opportunity for a 
professional described in subpara-
graph (A) to review, and submit cor-
rections for, the information to be 
made public with respect to the pro-
fessional under such subparagraph 
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prior to such information being made 
public. 
‘‘(D) 
AGGREGATE
INFORMATION.— 
The Secretary shall periodically post 
on the Physician Compare Internet 
website aggregate information on the 
VBP program, including the range of 
composite scores for all VBP eligible 
professionals and the range of the 
performance of all VBP eligible pro-
fessionals with respect to each per-
formance category. 
‘‘(11) CONSULTATION.—The Secretary 
shall consult with stakeholders in car-
rying out the VBP program, including for 
the identification of measures and activi-
ties under paragraph (2)(B) and the 
methodologies 
developed 
under 
para-
graphs (5)(A) and (7). Such consultation 
shall include the use of a request for in-
formation or other mechanisms deter-
mined appropriate. 
‘‘(12) TECHNICAL ASSISTANCE TO SMALL 
PRACTICES AND PRACTICES IN HEALTH PRO-
FESSIONAL SHORTAGE AREAS.— 
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‘‘(A) IN
GENERAL.—The Secretary 
shall enter into contracts or agree-
ments with appropriate entities (such 
as 
quality 
improvement 
organiza-
tions, regional extension centers (as 
described in section 3012(c) of the 
Public Health Service Act), or re-
gional health collaboratives) to offer 
guidance and assistance to VBP eligi-
ble professionals in practices of fewer 
than 20 professionals (with priority 
given to such practices located in 
rural areas, health professional short-
age areas (as designated under in sec-
tion 332(a)(1)(A) of the Public Health 
Service Act), or practices with low 
composite scores) with respect to— 
‘‘(i) 
the 
performance 
cat-
egories described in clauses (i) 
through (iv) of paragraph (2)(A); 
or 
‘‘(ii) how to transition to the 
implementation of and participa-
tion in an alternative payment 
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model as described in section 
1833(z)(3)(C). 
‘‘(B) FUNDING
FOR
IMPLEMENTA-
TION.—For purposes of implementing 
subparagraph (A), the Secretary shall 
provide for the transfer from the Fed-
eral Supplementary Medical Insur-
ance Trust Fund established under 
section 1841 to the Centers for Medi-
care & Medicaid Services Program 
Management Account of $50,000,000 
for each of fiscal years 2014 through 
2018. Amounts transferred under this 
subparagraph for a fiscal year shall 
be available until expended. 
‘‘(13) FEEDBACK
AND
INFORMATION
TO 
IMPROVE PERFORMANCE.— 
‘‘(A) PERFORMANCE FEEDBACK.— 
‘‘(i) 
IN
GENERAL.—Beginning 
July 1, 2015, the Secretary— 
‘‘(I) shall make available 
timely 
(such 
as 
quarterly) 
confidential feedback to each 
VBP eligible professional on 
the performance of such pro-
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fessional with respect to the 
performance categories under 
clauses (i) and (ii) of para-
graph (2)(A); and 
‘‘(II) may make available 
confidential feedback to each 
such professional on the per-
formance of such professional 
with respect to the perform-
ance categories under clauses 
(iii) and (iv) of such para-
graph. 
‘‘(ii) 
MECHANISMS.—The 
Sec-
retary may use one or more mech-
anisms to make feedback avail-
able under clause (i), which may 
include use of a web-based portal 
or other mechanisms determined 
appropriate by the Secretary. The 
Secretary shall encourage provi-
sion of feedback through quali-
fied clinical data registries as de-
scribed in subsection (m)(3)(E)). 
‘‘(iii) USE
OF
DATA.—For pur-
poses of clause (i), the Secretary 
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may use data, with respect to a 
VBP eligible professional, from 
periods prior to the current per-
formance period and may use 
rolling periods in order to make 
illustrative calculations about the 
performance of such professional. 
‘‘(iv) DISCLOSURE EXEMPTION.— 
Feedback made available under 
this subparagraph shall be ex-
empt from disclosure under sec-
tion 552 of title 5, United States 
Code. 
‘‘(v) 
RECEIPT
OF
INFORMA-
TION.—The Secretary may use the 
mechanisms 
established 
under 
clause (ii) to receive information 
from professionals, such as infor-
mation with respect to this sub-
section. 
‘‘(B) ADDITIONAL INFORMATION.— 
‘‘(i) 
IN
GENERAL.—Beginning 
July 1, 2016, the Secretary shall 
make available to each VBP eligi-
ble professional information, with 
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respect to individuals who are pa-
tients of such VBP eligible profes-
sional, about items and services 
for which payment is made under 
this title that are furnished to 
such individuals by other sup-
pliers and providers of services, 
which may include information 
described in clause (ii). Such in-
formation shall be made available 
under the previous sentence to 
such VBP eligible professionals 
by mechanisms determined ap-
propriate by the Secretary, which 
may include use of a web-based 
portal. Such information shall be 
made 
available 
in 
accordance 
with the same or similar terms as 
data are made available to ac-
countable 
care 
organizations 
under section 1899, including a 
beneficiary opt-out. 
‘‘(ii) TYPE
OF
INFORMATION.— 
For purposes of clause (i), the in-
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formation 
described 
in 
this 
clause, is the following: 
‘‘(I) With respect to se-
lected items and services (as 
determined 
appropriate 
by 
the Secretary) for which pay-
ment is made under this title 
and that are furnished to indi-
viduals, who are patients of a 
VBP eligible professional, by 
another supplier or provider 
of services during the most re-
cent period for which data 
are available (such as the 
most recent three-month pe-
riod), the name of such pro-
viders furnishing such items 
and services to such patients 
during such period, the types 
of such items and services so 
furnished, and the dates such 
items and services were so 
furnished. 
‘‘(II) Historical averages 
(and other measures of the 
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distribution if appropriate) of 
the total, and components of, 
allowed charges (and other 
figures as determined appro-
priate by the Secretary) for 
care episodes for such period. 
‘‘(14) REVIEW.— 
‘‘(A) TARGETED REVIEW.—The Sec-
retary shall establish a process under 
which a VBP eligible professional 
may seek an informal review of the 
calculation of the VBP program in-
centive payment adjustment factor 
applicable to such eligible profes-
sional under this subsection for a 
year. The results of a review con-
ducted pursuant to the previous sen-
tence shall not be taken into account 
for purposes of paragraph (7) with re-
spect to a year (other than with re-
spect to the calculation of such eligi-
ble professional’s VBP program in-
centive payment adjustment factor 
for such year) after the factors deter-
mined in subparagraph (A) of such 
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paragraph have been determined for 
such year. 
‘‘(B) LIMITATION.—Except as pro-
vided for in subparagraph (A), there 
shall be no administrative or judicial 
review under section 1869, section 
1878, or otherwise of the following: 
‘‘(i) The methodology used to 
determine the amount of the VBP 
program incentive payment ad-
justment factor under paragraph 
(7) and the determination of such 
amount. 
‘‘(ii) The determination of the 
amount of funding available for 
such VBP program incentive pay-
ments under paragraph (6)(A) and 
the 
payment 
reduction 
under 
paragraph (6)(B)(i). 
‘‘(iii) The establishment of the 
performance 
standards 
under 
paragraph (3) and the perform-
ance period under paragraph (4). 
‘‘(iv) 
The 
identification 
of 
measures and activities specified 
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under paragraph (2)(B) and infor-
mation made public or posted on 
the Physician Compare Internet 
website of the Centers for Medi-
care & Medicaid Services under 
paragraph (10). 
‘‘(v) The methodology devel-
oped under paragraph (5) that is 
used to calculate performance 
scores and the calculation of such 
scores, including the weighting of 
measures and activities under 
such methodology.’’. 
(2) GAO REPORTS.— 
(A) EVALUATION OF ELIGIBLE PRO-
FESSIONAL
VBP
PROGRAM.—Not later 
than October 1, 2018, and October 1, 
2021, the Comptroller General of the 
United States shall submit to Con-
gress a report evaluating the eligible 
professional value-based performance 
incentive program under subsection 
(q) of section 1848 of the Social Secu-
rity Act (42 U.S.C. 1395w–4), as added 
by paragraph (1). Such report shall— 
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(i) examine the distribution of 
the performance and incentive 
payments for VBP eligible profes-
sionals (as defined in subsection 
(q)(1)(C) of such section) under 
such program, and patterns relat-
ing to such performance and in-
centive 
payments, 
including 
based on type of provider, prac-
tice size, geographic location, and 
patient mix; and 
(ii) provide recommendations 
for improving such program. 
(B) STUDY TO EXAMINE ALIGNMENT 
OF QUALITY MEASURES USED IN PUBLIC 
AND
PRIVATE
PROGRAMS.—Not later 
than 18 months after the date of the 
enactment of this Act, the Comp-
troller General of the United States 
shall submit to Congress a report 
that— 
(i) compares the similarities 
and differences in the use of qual-
ity measures under the original 
medicare fee-for-service program 
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under parts A and B of title XVIII 
of the Social Security Act, the 
Medicare 
Advantage 
program 
under part C of such title, and 
private payer arrangements; and 
(ii) makes recommendations 
on how to reduce the administra-
tive burden involved in applying 
such quality measures. 
(3) FUNDING
FOR
IMPLEMENTATION.— 
For purposes of implementing the provi-
sions of and the amendments made by 
this section, the Secretary of Health and 
Human Services shall provide for the 
transfer of $50,000,000 from the Supple-
mentary Medical Insurance Trust Fund 
established under section 1841 of the So-
cial Security Act (42 U.S.C. 1395t) to the 
Centers for Medicare & Medicaid Pro-
gram Management Account for each of 
the 
fiscal 
years 
2014 
through 
2017. 
Amounts transferred under this para-
graph shall be available until expended. 
(d) IMPROVING
QUALITY
REPORTING
FOR 
COMPOSITE SCORES.— 
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(B) by inserting ‘‘and, for report-
ing periods occurring in 2014 and 
subsequent years, the Secretary may 
establish’’ following ‘‘shall establish’’. 
(3) PHYSICIAN FEEDBACK PROGRAM RE-
PORTS SUCCEEDED BY REPORTS UNDER VBP 
PROGRAM.—Section 1848(n) of the Social 
Security Act (42 U.S.C. 1395w–4(n)) is 
amended by adding at the end the fol-
lowing new paragraph: 
‘‘(11) REPORTS ENDING WITH 2016.—Re-
ports under the Program shall not be 
provided after December 31, 2016. See 
subsection (q)(13) for reports beginning 
with 2017.’’. 
(4) 
COORDINATION
WITH
SATISFYING 
MEANINGFUL
EHR
USE
CLINICAL
QUALITY 
MEASURE
REPORTING
REQUIREMENT.—Sec-
tion 1848(o)(2)(A)(iii) of the Social Secu-
rity Act (42 U.S.C. 1395w–4(o)(2)(A)(iii)) is 
amended by inserting ‘‘and subsection 
(q)(5)(C)(ii)(II)’’ after ‘‘Subject to subpara-
graph (B)(ii)’’. 
(e) 
PROMOTING
ALTERNATIVE
PAYMENT 
MODELS.— 
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(1) INCENTIVE
PAYMENTS
FOR
PARTICI-
PATION IN ELIGIBLE ALTERNATIVE PAYMENT 
MODELS.—Section 1833 of the Social Secu-
rity Act (42 U.S.C. 1395l) is amended by 
adding at the end the following new sub-
section: 
‘‘(z) INCENTIVE PAYMENTS
FOR PARTICIPA-
TION IN ELIGIBLE ALTERNATIVE PAYMENT MOD-
ELS.— 
‘‘(1) PAYMENT INCENTIVE.— 
‘‘(A) IN
GENERAL.—In the case of 
covered 
professional 
services 
fur-
nished by an eligible professional 
during a year that is in the period be-
ginning with 2017 and ending with 
2022 and for which the professional is 
a qualifying APM participant, in addi-
tion to the amount of payment that 
would otherwise be made for such 
covered professional services under 
this part for such year, there also 
shall be paid to such professional an 
amount equal to 5 percent of the pay-
ment amount for the covered profes-
sional services under this part for the 
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preceding year. For purposes of the 
previous 
sentence, 
the 
payment 
amount for the preceding year may 
be an estimation for the full pre-
ceding year based on a period of such 
preceding year that is less than the 
full year. The Secretary shall estab-
lish policies to implement this sub-
paragraph in cases where payment 
for covered professional services fur-
nished by a qualifying APM partici-
pant in an alternative payment model 
is made to an entity participating in 
the alternative payment model rather 
than directly to the qualifying APM 
participant. 
‘‘(B) FORM OF PAYMENT.—Payments 
under this subsection shall be made 
in a lump sum, on an annual basis, as 
soon as practicable. 
‘‘(C) TREATMENT
OF
PAYMENT
IN-
CENTIVE.—Payments under this sub-
section shall not be taken into ac-
count for purposes of determining ac-
tual expenditures under an alter-
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native payment model and for pur-
poses of determining or rebasing any 
benchmarks used under the alter-
native payment model. 
‘‘(D) COORDINATION.—The amount 
of the additional payment for an item 
or service under this subsection or 
subsection (m) shall be determined 
without regard to any additional pay-
ment for the item or service under 
subsection (m) and this subsection, 
respectively. The amount of the addi-
tional payment for an item or service 
under this subsection or subsection 
(x) shall be determined without re-
gard to any additional payment for 
the item or service under subsection 
(x) and this subsection, respectively. 
The amount of the additional pay-
ment for an item or service under 
this subsection or subsection (y) shall 
be determined without regard to any 
additional payment for the item or 
service under subsection (y) and this 
subsection, respectively. 
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‘‘(2) QUALIFYING
APM
PARTICIPANT.— 
For purposes of this subsection, the term 
‘qualifying APM participant’ means the 
following: 
‘‘(A) 2017 AND 2018.—With respect 
to 2017 and 2018, an eligible profes-
sional for whom the Secretary deter-
mines that at least 25 percent of pay-
ments under this part for covered 
professional services furnished by 
such professional during the most re-
cent period for which data are avail-
able (which may be less than a year) 
were attributable to such services 
furnished under this part through an 
entity that participates in an eligible 
alternative payment model with re-
spect to such services. 
‘‘(B) 2019 AND 2020.—With respect 
to 2019 and 2020, an eligible profes-
sional described in either of the fol-
lowing clauses: 
‘‘(i) 
MEDICARE
REVENUE 
THRESHOLD
OPTION.—An 
eligible 
professional for whom the Sec-
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retary determines that at least 50 
percent of payments under this 
part 
for 
covered 
professional 
services furnished by such profes-
sional during the most recent pe-
riod for which data are available 
(which may be less than a year) 
were attributable to such services 
furnished under this part through 
an entity that participates in an 
eligible 
alternative 
payment 
model with respect to such serv-
ices. 
‘‘(ii) COMBINATION
ALL-PAYER 
AND MEDICARE REVENUE THRESHOLD 
OPTION.—An 
eligible 
profes-
sional— 
‘‘(I) for whom the Sec-
retary determines, with re-
spect to items and services 
furnished 
by 
such 
profes-
sional during the most recent 
period for which data are 
available (which may be less 
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166 
than a year), that at least 50 
percent of the sum of— 
‘‘(aa) 
payments 
de-
scribed in clause (i); and 
‘‘(bb) all other pay-
ments, regardless of payer 
(other 
than 
payments 
made by the Secretary of 
Defense or the Secretary 
of Veterans Affairs under 
chapter 55 of title 10, 
United States Code, or 
title 
38, 
United 
States 
Code, or any other provi-
sion of law), 
meet 
the 
requirement 
de-
scribed in clause (iii)(I) with 
respect to payments described 
in item (aa) and meet the re-
quirement described in clause 
(iii)(II) with respect to pay-
ments described in item (bb); 
‘‘(II) for whom the Sec-
retary determines at least 25 
percent of payments under 
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this part for covered profes-
sional services furnished by 
such professional during the 
most recent period for which 
data are available (which may 
be less than a year) were at-
tributable to such services 
furnished 
under 
this 
part 
through an entity that partici-
pates in an eligible alter-
native payment model with 
respect to such services; and 
‘‘(III) who provides to the 
Secretary such information as 
is necessary for the Secretary 
to 
make 
a 
determination 
under subclause (I), with re-
spect to such professional. 
‘‘(iii) REQUIREMENT.—For pur-
poses of clause (ii)(I)— 
‘‘(I) the requirement de-
scribed in this subclause, with 
respect to payments described 
in item (aa) of such clause, is 
that such payments are made 
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168 
under an eligible alternative 
payment model; and 
‘‘(II) the requirement de-
scribed in this subclause, with 
respect to payments described 
in item (bb) of such clause, is 
that such payments are made 
under 
an 
arrangement 
in 
which— 
‘‘(aa) quality measures 
comparable to measures 
under 
the 
performance 
category described in sec-
tion 1848(q)(2)(B)(i) apply; 
‘‘(bb) 
certified 
EHR 
technology is used; and 
‘‘(cc) the eligible pro-
fessional bears more than 
nominal financial risk if 
actual aggregate expendi-
tures exceeds expected ag-
gregate expenditures. 
‘‘(C) BEGINNING IN 2021.—With re-
spect to 2021 and each subsequent 
year, an eligible professional de-
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scribed in either of the following 
clauses: 
‘‘(i) 
MEDICARE
REVENUE 
THRESHOLD
OPTION.—An 
eligible 
professional for whom the Sec-
retary determines that at least 75 
percent of payments under this 
part 
for 
covered 
professional 
services furnished by such profes-
sional during the most recent pe-
riod for which data are available 
(which may be less than a year) 
were attributable to such services 
furnished under this part through 
an entity that participates in an 
eligible 
alternative 
payment 
model with respect to such serv-
ices. 
‘‘(ii) COMBINATION
ALL-PAYER 
AND MEDICARE REVENUE THRESHOLD 
OPTION.—An 
eligible 
profes-
sional— 
‘‘(I) for whom the Sec-
retary determines, with re-
spect to items and services 
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furnished 
by 
such 
profes-
sional during the most recent 
period for which data are 
available (which may be less 
than a year), that at least 75 
percent of the sum of— 
‘‘(aa) 
payments 
de-
scribed in clause (i); and 
‘‘(bb) all other pay-
ments, regardless of payer 
(other 
than 
payments 
made by the Secretary of 
Defense or the Secretary 
of Veterans Affairs under 
chapter 55 of title 10, 
United States Code, or 
title 
38, 
United 
States 
Code, or any other provi-
sion of law), 
meet 
the 
requirement 
de-
scribed in clause (iii)(I) with 
respect to payments described 
in item (aa) and meet the re-
quirement described in clause 
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(iii)(II) with respect to pay-
ments described in item (bb); 
‘‘(II) for whom the Sec-
retary determines at least 25 
percent of payments under 
this part for covered profes-
sional services furnished by 
such professional during the 
most recent period for which 
data are available (which may 
be less than a year) were at-
tributable to such services 
furnished 
under 
this 
part 
through an entity that partici-
pates in an eligible alter-
native payment model with 
respect to such services; and 
‘‘(III) who provides to the 
Secretary such information as 
is necessary for the Secretary 
to 
make 
a 
determination 
under subclause (I), with re-
spect to such professional. 
‘‘(iii) REQUIREMENT.—For pur-
poses of clause (ii)(I)— 
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‘‘(I) the requirement de-
scribed in this subclause, with 
respect to payments described 
in item (aa) of such clause, is 
that such payments are made 
under an eligible alternative 
payment model; and 
‘‘(II) the requirement de-
scribed in this subclause, with 
respect to payments described 
in item (bb) of such clause, is 
that such payments are made 
under 
an 
arrangement 
in 
which— 
‘‘(aa) quality measures 
comparable to measures 
under 
the 
performance 
category described in sec-
tion 1848(q)(2)(B)(i) apply; 
‘‘(bb) 
certified 
EHR 
technology is used; and 
‘‘(cc) the eligible pro-
fessional bears more than 
nominal financial risk if 
actual aggregate expendi-
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tures exceeds expected ag-
gregate expenditures. 
‘‘(2) ADDITIONAL DEFINITIONS.—In this 
subsection: 
‘‘(A) COVERED PROFESSIONAL SERV-
ICES.—The term ‘covered professional 
services’ has the meaning given that 
term in section 1848(k)(3)(A). 
‘‘(B) ELIGIBLE PROFESSIONAL.—The 
term ‘eligible professional’ has the 
meaning given that term in section 
1848(k)(3)(B). 
‘‘(C) ALTERNATIVE PAYMENT MODEL 
(APM).—The term ‘alternative payment 
model’ means any of the following: 
‘‘(i) A model under section 
1115A (other than a health care 
innovation award). 
‘‘(ii) An accountable care or-
ganization under section 1899. 
‘‘(iii) A demonstration under 
section 1866C. 
‘‘(iv) 
A 
demonstration 
re-
quired by Federal law. 
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‘‘(D) ELIGIBLE
ALTERNATIVE
PAY-
MENT MODEL (APM).— 
‘‘(i) IN GENERAL.—The term ‘el-
igible alternative payment model’ 
means, with respect to a year, an 
alternative payment model— 
‘‘(I) that requires use of 
certified EHR technology (as 
defined in subsection (o)(4)); 
‘‘(II) that provides for pay-
ment for covered professional 
services 
based 
on 
quality 
measures 
comparable 
to 
measures under the perform-
ance category described in 
section 1848(q)(2)(B)(i); and 
‘‘(III) that satisfies the re-
quirement described in clause 
(ii). 
‘‘(ii) 
ADDITIONAL
REQUIRE-
MENT.—For purposes of clause 
(i)(III), the requirement described 
in this clause, with respect to a 
year and an alternative payment 
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model, is that the alternative pay-
ment model— 
‘‘(I) is one in which one or 
more entities bear financial 
risk 
for 
monetary 
losses 
under such model that are in 
excess of a nominal amount; 
or 
‘‘(II) is a medical home ex-
panded 
under 
section 
1115A(c). 
‘‘(3) LIMITATION.—There shall be no 
administrative or judicial review under 
section 1869, 1878, or otherwise, of the 
following: 
‘‘(A) The determination that an el-
igible professional is a qualifying 
APM participant under paragraph (2) 
and the determination that an alter-
native payment model is an eligible 
alternative 
payment 
model 
under 
paragraph (3)(D). 
‘‘(B) The determination of the 
amount of the 5 percent payment in-
centive under paragraph (1)(A), in-
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cluding any estimation as part of 
such determination.’’. 
(2) COORDINATION CONFORMING AMEND-
MENTS.—Section 1833 of the Social Secu-
rity Act (42 U.S.C. 1395l) is further 
amended— 
(A) in subsection (x)(3), by adding 
at the end the following new sen-
tence: ‘‘The amount of the additional 
payment for a service under this sub-
section and subsection (z) shall be de-
termined without regard to any addi-
tional payment for the service under 
subsection (z) and this subsection, re-
spectively.’’; and 
(B) in subsection (y)(3), by adding 
at the end the following new sen-
tence: ‘‘The amount of the additional 
payment for a service under this sub-
section and subsection (z) shall be de-
termined without regard to any addi-
tional payment for the service under 
subsection (z) and this subsection, re-
spectively.’’. 
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(3) ENCOURAGING
DEVELOPMENT
AND 
TESTING
OF
CERTAIN
MODELS.—Section 
1115A(b)(2) of the Social Security Act (42 
U.S.C. 1315a(b)(2)) is amended— 
(A) in subparagraph (B), by add-
ing at the end the following new 
clauses: 
‘‘(xxi) Focusing primarily on 
physicians’ services (as defined in 
section 1848(j)(3)) furnished by 
physicians who are not primary 
care practitioners. 
‘‘(xxii) Focusing on practices 
of fewer than 20 professionals.’’; 
and 
(B) in subparagraph (C)(viii), by 
striking ‘‘other public sector or pri-
vate sector payers’’ and inserting 
‘‘other public sector payers, private 
sector payers, or Statewide payment 
models’’. 
(f) STUDY AND REPORT ON FRAUD RELATED 
TO ALTERNATIVE PAYMENT MODELS UNDER THE 
MEDICARE PROGRAM.— 
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(1) STUDY.—The Secretary of Health 
and Human Services, in consultation 
with the Inspector General of the Depart-
ment of Health and Human Services, 
shall conduct a study that— 
(A) examines the applicability of 
the Federal fraud prevention laws to 
items and services furnished under 
title XVIII of the Social Security Act 
for which payment is made under an 
alternative payment model (as de-
fined in section 1833(z)(3)(C) of such 
Act (42 U.S.C. 1395l(z)(3)(C))); 
(B) identifies aspects of such al-
ternative payment models that are 
vulnerable to fraudulent activity; and 
(C) examines the implications of 
waivers to such laws granted in sup-
port of such alternative payment 
models, including under any poten-
tial expansion of such models. 
(2) REPORT.—Not later than 2 years 
after the date of the enactment of this 
Act, the Secretary shall submit to Con-
gress a report containing the results of 
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the study conducted under paragraph (1). 
Such report shall include recommenda-
tions for actions to be taken to reduce 
the vulnerability of such alternative pay-
ment models to fraudulent activity. Such 
report also shall include, as appropriate, 
recommendations of the Inspector Gen-
eral for changes in Federal fraud preven-
tion laws to reduce such vulnerability. 
(g) IMPROVING PAYMENT ACCURACY.— 
(1) STUDIES AND REPORTS OF EFFECT OF 
CERTAIN INFORMATION ON QUALITY AND RE-
SOURCE USE .— 
(A) STUDY
USING
EXISTING
MEDI-
CARE DATA.— 
(i) STUDY.—The Secretary of 
Health and Human Services (in 
this subsection referred to as the 
‘‘Secretary’’) shall conduct a study 
that examines the effect of indi-
viduals’ socioeconomic status on 
quality and resource use outcome 
measures for individuals under 
the Medicare program (such as to 
recognize that less healthy indi-
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viduals may require more inten-
sive 
interventions). 
The 
study 
shall use information collected on 
such individuals in carrying out 
such program, such as urban and 
rural location, eligibility for Med-
icaid (recognizing and accounting 
for varying Medicaid eligibility 
across States), and eligibility for 
benefits under the supplemental 
security income (SSI) program. 
The Secretary shall carry out this 
paragraph acting through the As-
sistant Secretary for Planning 
and Evaluation. 
(ii) REPORT.—Not later than 2 
years after the date of the enact-
ment of this Act, the Secretary 
shall submit to Congress a report 
on the study conducted under 
clause (i). 
(B) STUDY USING OTHER DATA.— 
(i) 
STUDY.—The 
Secretary 
shall conduct a study that exam-
ines the impact of risk factors, 
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such as those described in section 
1848(p)(3) of the Social Security 
Act (42 U.S.C. 1395w–4(p)(3)), race, 
health literacy, limited English 
proficiency (LEP), and patient ac-
tivation, on quality and resource 
use outcome measures under the 
Medicare program (such as to rec-
ognize that less healthy individ-
uals may require more intensive 
interventions). 
In 
conducting 
such study the Secretary may use 
existing Federal data and collect 
such additional data as may be 
necessary to complete the study. 
(ii) REPORT.—Not later than 5 
years after the date of the enact-
ment of this Act, the Secretary 
shall submit to Congress a report 
on the study conducted under 
clause (i). 
(C) EXAMINATION OF DATA IN CON-
DUCTING
STUDIES.—In conducting the 
studies under subparagraphs (A) and 
(B), the Secretary shall examine what 
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non-Medicare data sets, such as data 
from the American Community Sur-
vey (ACS), can be useful in con-
ducting the types of studies under 
such paragraphs and how such data 
sets that are identified as useful can 
be coordinated with Medicare admin-
istrative data in order to improve the 
overall data set available to do such 
studies and for the administration of 
the Medicare program. 
(D) RECOMMENDATIONS TO ACCOUNT 
FOR INFORMATION IN PAYMENT ADJUST-
MENT MECHANISMS.—If the studies con-
ducted under subparagraphs (A) and 
(B) find a relationship between the 
factors examined in the studies and 
quality and resource use outcome 
measures, then the Secretary shall 
also provide recommendations for 
how the Centers for Medicare & Med-
icaid Services should— 
(i) obtain access to the nec-
essary data (if such data is not al-
ready being collected) on such 
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‘‘(i) 
distinct 
care 
episode 
groups; and 
‘‘(ii) distinct patient condition 
groups. 
‘‘(D) DEVELOPMENT
OF
PROPOSED 
CLASSIFICATION CODES.— 
‘‘(i) IN GENERAL.—Taking into 
account 
the 
information 
de-
scribed in subparagraph (B) and 
the information received under 
subparagraph (C), the Secretary 
shall— 
‘‘(I) establish distinct care 
episode groups and distinct 
patient 
condition 
groups, 
which account for at least an 
estimated two-thirds of ex-
penditures under parts A and 
B; and 
‘‘(II) assign codes to such 
groups. 
‘‘(ii) CARE EPISODE GROUPS.—In 
establishing 
the 
care 
episode 
groups under clause (i), the Sec-
retary shall take into account— 
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‘‘(IV) 
Codes 
which 
are 
multiple codes that are fre-
quently billed in conjunction 
with furnishing a single serv-
ice. 
‘‘(V) Codes with low rel-
ative 
values, 
particularly 
those that are often billed 
multiple times for a single 
treatment. 
‘‘(VI) Codes that have not 
been subject to review since 
implementation 
of 
the 
fee 
schedule. 
‘‘(VII) Codes that account 
for the majority of spending 
under 
the 
physician 
fee 
schedule. 
‘‘(VIII) Codes for services 
that have experienced a sub-
stantial change in the hospital 
length of stay or procedure 
time. 
‘‘(IX) 
Codes 
for 
which 
there may be a change in the 
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