most recent period 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 par-
ticipates in an eligible alternative payment 
model with respect to such services. 
‘‘(ii) COMBINATION
ALL-PAYER
AND 
MEDICARE
REVENUE
THRESHOLD
OP-
TION.—An eligible professional— 
‘‘(I) for whom the Secretary de-
termines, with respect to items and 
services furnished by such professional 
during the most recent period for 
which data are available (which may 
be less than a year), that at least 50 
percent of the sum of— 
‘‘(aa) payments described in 
clause (i); and 
‘‘(bb) all other payments, re-
gardless 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 
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Code, or any other provision of 
law, and other than payments 
made under title XIX in a State 
in which no medical home or al-
ternative payment model is avail-
able under the State program 
under that title), 
meet the requirement described in 
clause (iii)(I) with respect to pay-
ments described in item (aa) and meet 
the requirement described in clause 
(iii)(II) with respect to payments de-
scribed in item (bb); 
‘‘(II) for whom the Secretary de-
termines at least 25 percent of pay-
ments under this part for covered pro-
fessional services furnished by such 
professional during the most recent 
period 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 
services; and 
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‘‘(III) who provides to the Sec-
retary such information as is nec-
essary for the Secretary to make a de-
termination under subclause (I), with 
respect to such professional. 
‘‘(iii) REQUIREMENT.—For purposes 
of clause (ii)(I)— 
‘‘(I) the requirement described in 
this subclause, with respect to pay-
ments described in item (aa) of such 
clause, is that such payments are 
made under an eligible alternative 
payment model; and 
‘‘(II) the requirement described 
in this subclause, with respect to pay-
ments described in item (bb) of such 
clause, is that such payments are 
made 
under 
an 
arrangement 
in 
which— 
‘‘(aa) quality measures com-
parable to measures under the 
performance category described 
in section 1848(q)(2)(B)(i) apply; 
‘‘(bb) certified EHR tech-
nology is used; and 
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‘‘(cc) the eligible profes-
sional (AA) bears more than 
nominal financial risk if actual 
aggregate expenditures exceeds 
expected aggregate expenditures; 
or (BB) is a medical home (with 
respect to beneficiaries under 
title XIX) that meets criteria 
comparable to medical homes ex-
panded under section 1115A(c). 
‘‘(C) BEGINNING IN 2022.—With respect to 
2022 and each subsequent year, an eligible pro-
fessional described in either of the following 
clauses: 
‘‘(i) MEDICARE REVENUE THRESHOLD 
OPTION.—An 
eligible 
professional 
for 
whom the Secretary determines that at 
least 75 percent of payments under this 
part for covered professional services fur-
nished by such professional during the 
most recent period 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 par-
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ticipates in an eligible alternative payment 
model with respect to such services. 
‘‘(ii) COMBINATION
ALL-PAYER
AND 
MEDICARE
REVENUE
THRESHOLD
OP-
TION.—An eligible professional— 
‘‘(I) for whom the Secretary de-
termines, with respect to items and 
services furnished by such professional 
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 described in 
clause (i); and 
‘‘(bb) all other payments, re-
gardless 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 provision of 
law, and other than payments 
made under title XIX in a State 
in which no medical home or al-
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ternative payment model is avail-
able under the State program 
under that title), 
meet the requirement described in 
clause (iii)(I) with respect to pay-
ments described in item (aa) and meet 
the requirement described in clause 
(iii)(II) with respect to payments de-
scribed in item (bb); 
‘‘(II) for whom the Secretary de-
termines at least 25 percent of pay-
ments under this part for covered pro-
fessional services furnished by such 
professional during the most recent 
period 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 
services; and 
‘‘(III) who provides to the Sec-
retary such information as is nec-
essary for the Secretary to make a de-
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termination under subclause (I), with 
respect to such professional. 
‘‘(iii) REQUIREMENT.—For purposes 
of clause (ii)(I)— 
‘‘(I) the requirement described in 
this subclause, with respect to pay-
ments described in item (aa) of such 
clause, is that such payments are 
made under an eligible alternative 
payment model; and 
‘‘(II) the requirement described 
in this subclause, with respect to pay-
ments described in item (bb) of such 
clause, is that such payments are 
made 
under 
an 
arrangement 
in 
which— 
‘‘(aa) quality measures com-
parable to measures under the 
performance category described 
in section 1848(q)(2)(B)(i) apply; 
‘‘(bb) certified EHR tech-
nology is used; and 
‘‘(cc) the eligible profes-
sional (AA) bears more than 
nominal financial risk if actual 
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aggregate expenditures exceeds 
expected aggregate expenditures; 
or (BB) is a medical home (with 
respect to beneficiaries under 
title XIX) that meets criteria 
comparable to medical homes ex-
panded under section 1115A(c). 
‘‘(3) ADDITIONAL DEFINITIONS.—In this sub-
section: 
‘‘(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) The shared savings program 
under section 1899. 
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‘‘(iii) A demonstration under section 
1866C. 
‘‘(iv) A demonstration required by 
Federal law. 
‘‘(D) ELIGIBLE
ALTERNATIVE
PAYMENT 
MODEL (APM).— 
‘‘(i) IN GENERAL.—The term ‘eligible 
alternative payment model’ means, with re-
spect to a year, an alternative payment 
model— 
‘‘(I) that requires use of certified 
EHR technology (as defined in sub-
section (o)(4)); 
‘‘(II) that provides for payment 
for covered professional services based 
on quality measures comparable to 
measures under the performance cat-
egory 
described 
in 
section 
1848(q)(2)(B)(i); and 
‘‘(III) that satisfies the require-
ment described in clause (ii). 
‘‘(ii) ADDITIONAL
REQUIREMENT.— 
For purposes of clause (i)(III), the require-
ment described in this clause, with respect 
to a year and an alternative payment 
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model, is that the alternative payment 
model— 
‘‘(I) is one in which one or more 
entities bear financial risk for mone-
tary losses under such model that are 
in excess of a nominal amount; or 
‘‘(II) is a medical home expanded 
under section 1115A(c). 
‘‘(4) LIMITATION.—There shall be no adminis-
trative or judicial review under section 1869, 1878, 
or otherwise, of the following: 
‘‘(A) The determination that an eligible 
professional is a qualifying APM participant 
under paragraph (2) and the determination 
that an alternative payment model is an eligible 
alternative payment model under paragraph 
(3)(D). 
‘‘(B) The determination of the amount of 
the 5 percent payment incentive under para-
graph (1)(A), including any estimation as part 
of such determination.’’. 
(3) 
COORDINATION
CONFORMING
AMEND-
MENTS.—Section 1833 of the Social Security Act 
(42 U.S.C. 1395l) is further amended— 
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(A) in subsection (x)(3), by adding at the 
end the following new sentence: ‘‘The amount 
of the additional payment for a service under 
this subsection and subsection (z) shall be de-
termined without regard to any additional pay-
ment for the service under subsection (z) and 
this subsection, respectively.’’; and 
(B) in subsection (y)(3), by adding at the 
end the following new sentence: ‘‘The amount 
of the additional payment for a service under 
this subsection and subsection (z) shall be de-
termined without regard to any additional pay-
ment for the service under subsection (z) and 
this subsection, respectively.’’. 
(4) ENCOURAGING DEVELOPMENT AND TEST-
ING 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 adding at the 
end the following new clauses: 
‘‘(xxi) Focusing primarily on physi-
cians’ services (as defined in section 
1848(j)(3)) furnished by physicians who 
are not primary care practitioners. 
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‘‘(xxii) Focusing on practices of 15 or 
fewer professionals. 
‘‘(xxiii) Focusing on risk-based models 
for small physician practices which may in-
volve two-sided risk and prospective patient 
assignment, and which examine risk-ad-
justed decreases in mortality rates, hos-
pital readmissions rates, and other relevant 
and appropriate clinical measures. 
‘‘(xxiv) Focusing primarily on title 
XIX, working in conjunction with the Cen-
ter for Medicaid and CHIP Services.’’; and 
(B) in subparagraph (C)(viii), by striking 
‘‘other public sector or private sector payers’’ 
and inserting ‘‘other public sector payers, pri-
vate sector payers, or Statewide payment mod-
els’’. 
(5) CONSTRUCTION
REGARDING
TELEHEALTH 
SERVICES.—Nothing in the provisions of, or amend-
ments made by, this Act shall be construed as pre-
cluding an alternative payment model or a qualifying 
APM participant (as those terms are defined in sec-
tion 1833(z) of the Social Security Act, as added by 
paragraph (1)) from furnishing a telehealth service 
for which payment is not made under section 
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100 
1834(m) of the Social Security Act (42 U.S.C. 
1395m(m)). 
(6) INTEGRATING
MEDICARE
ADVANTAGE
AL-
TERNATIVE PAYMENT MODELS.—Not later than July 
1, 2015, the Secretary of Health and Human Serv-
ices shall submit to Congress a study that examines 
the feasibility of integrating alternative payment 
models in the Medicare Advantage payment system. 
The study shall include the feasibility of including a 
value-based modifier and whether such modifier 
should be budget neutral. 
(7) STUDY AND REPORT ON FRAUD RELATED 
TO
ALTERNATIVE
PAYMENT
MODELS
UNDER
THE 
MEDICARE PROGRAM.— 
(A) STUDY.—The Secretary of Health and 
Human Services, in consultation with the In-
spector General of the Department of Health 
and Human Services, shall conduct a study 
that— 
(i) 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 
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101 
(as defined in section 1833(z)(3)(C) of 
such Act (42 U.S.C. 1395l(z)(3)(C))); 
(ii) identifies aspects of such alter-
native payment models that are vulnerable 
to fraudulent activity; and 
(iii) examines the implications of waiv-
ers to such laws granted in support of such 
alternative 
payment 
models, 
including 
under any potential expansion of such 
models. 
(B) REPORT.—Not later than 2 years after 
the date of the enactment of this Act, the Sec-
retary shall submit to Congress a report con-
taining the results of the study conducted under 
subparagraph (A). Such report shall include 
recommendations for actions to be taken to re-
duce the vulnerability of such alternative pay-
ment models to fraudulent activity. Such report 
also shall include, as appropriate, recommenda-
tions of the Inspector General for changes in 
Federal fraud prevention laws to reduce such 
vulnerability. 
(f) IMPROVING PAYMENT ACCURACY.— 
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102 
(1) STUDIES AND REPORTS OF EFFECT OF CER-
TAIN
INFORMATION
ON
QUALITY
AND
RESOURCE 
USE.— 
(A) STUDY
USING
EXISTING
MEDICARE 
DATA.— 
(i) STUDY.—The Secretary of Health 
and Human Services (in this subsection re-
ferred to as the ‘‘Secretary’’) shall conduct 
a study that examines the effect of individ-
uals’ socioeconomic status on quality and 
resource use outcome measures for individ-
uals under the Medicare program (such as 
to recognize that less healthy individuals 
may require more intensive interventions). 
The study shall use information collected 
on such individuals in carrying out such 
program, such as urban and rural location, 
eligibility for Medicaid (recognizing and ac-
counting 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 Evalua-
tion. 
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103 
(ii) REPORT.—Not later than 2 years 
after the date of the enactment 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 con-
duct a study that examines the impact of 
risk factors, such as those described in sec-
tion 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 activation, on quality and re-
source use outcome measures under the 
Medicare program (such as to recognize 
that less healthy individuals may require 
more intensive interventions). In con-
ducting such study the Secretary may use 
existing Federal data and collect such ad-
ditional data as may be necessary to com-
plete the study. 
(ii) REPORT.—Not later than 5 years 
after the date of the enactment of this Act, 
the Secretary shall submit to Congress a 
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104 
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 Sec-
retary shall examine what non-Medicare data 
sets, such as data from the American Commu-
nity Survey (ACS), can be useful in conducting 
the types of studies under such paragraphs and 
how such data sets that are identified as useful 
can be coordinated with Medicare administra-
tive data in order to improve the overall data 
set available to do such studies and for the ad-
ministration of the Medicare program. 
(D) RECOMMENDATIONS TO ACCOUNT FOR 
INFORMATION
IN
PAYMENT
ADJUSTMENT 
MECHANISMS.—If the studies conducted 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 rec-
ommendations for how the Centers for Medicare 
& Medicaid Services should— 
(i) obtain access to the necessary data 
(if such data is not already being collected) 
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105 
on such factors, including recommenda-
tions on how to address barriers to the 
Centers in accessing such data; and 
(ii) account for such factors in deter-
mining payment adjustments based on 
quality and resource use outcome measures 
under the eligible professional Merit-based 
Incentive Payment System under section 
1848(q) of the Social Security Act (42 
U.S.C. 1395w–4(q)) and, as the Secretary 
determines appropriate, other similar pro-
visions of title XVIII of such Act. 
(E) FUNDING.—There are hereby appro-
priated from the Federal Supplementary Med-
ical Insurance Trust Fund under section 1841 
of the Social Security Act to the Secretary to 
carry out this paragraph $6,000,000, to remain 
available until expended. 
(2) CMS ACTIVITIES.— 
(A) HIERARCHAL
CONDITION
CATEGORY 
(HCC) IMPROVEMENT.—Taking into account the 
relevant studies conducted and recommenda-
tions made in reports under paragraph (1), the 
Secretary, on an ongoing basis, shall, as the 
Secretary determines appropriate, estimate how 
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106 
an individual’s health status and other risk fac-
tors affect quality and resource use outcome 
measures and, as feasible, shall incorporate in-
formation from quality and resource use out-
come measurement (including care episode and 
patient condition groups) into provisions of title 
XVIII of the Social Security Act that are simi-
lar to the eligible professional Merit-based In-
centive Payment System under section 1848(q) 
of such Act. 
(B) ACCOUNTING FOR OTHER FACTORS IN 
PAYMENT ADJUSTMENT MECHANISMS.— 
(i) IN
GENERAL.—Taking into ac-
count the studies conducted and rec-
ommendations made in reports under para-
graph (1) and other information as appro-
priate, the Secretary shall, as the Sec-
retary determines appropriate, account for 
identified factors with an effect on quality 
and resource use outcome measures when 
determining payment adjustment mecha-
nisms under provisions of title XVIII of 
the Social Security Act that are similar to 
the eligible professional Merit-based Incen-
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107 
tive 
Payment 
System 
under 
section 
1848(q) of such Act. 
(ii) ACCESSING DATA.—The Secretary 
shall collect or otherwise obtain access to 
the data necessary to carry out this para-
graph through existing and new data 
sources. 
(iii) PERIODIC ANALYSES.—The Sec-
retary shall carry out periodic analyses, at 
least every 3 years, based on the factors 
referred to in clause (i) so as to monitor 
changes in possible relationships. 
(C) FUNDING.—There are hereby appro-
priated from the Federal Supplementary Med-
ical Insurance Trust Fund under section 1841 
of the Social Security Act to the Secretary to 
carry out this paragraph and the application of 
this paragraph to the Merit-based Incentive 
Payment System under section 1848(q) of such 
Act $10,000,000, to remain available until ex-
pended. 
(3) STRATEGIC
PLAN
FOR
ACCESSING
RACE 
AND ETHNICITY DATA.—Not later than 18 months 
after the date of the enactment of this Act, the Sec-
retary shall develop and report to Congress on a 
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108 
strategic plan for collecting or otherwise accessing 
data on race and ethnicity for purposes of carrying 
out the eligible professional Merit-based Incentive 
Payment System under section 1848(q) of the Social 
Security Act and, as the Secretary determines ap-
propriate, other similar provisions of title XVIII of 
such Act. 
(g) COLLABORATING WITH THE PHYSICIAN, PRACTI-
TIONER, AND OTHER STAKEHOLDER COMMUNITIES TO 
IMPROVE RESOURCE USE MEASUREMENT.—Section 1848 
of the Social Security Act (42 U.S.C. 1395w–4), as 
amended by subsection (c), is further amended by adding 
at the end the following new subsection: 
‘‘(r) COLLABORATING WITH THE PHYSICIAN, PRAC-
TITIONER, AND OTHER STAKEHOLDER COMMUNITIES TO 
IMPROVE RESOURCE USE MEASUREMENT.— 
‘‘(1) IN GENERAL.—In order to involve the phy-
sician, practitioner, and other stakeholder commu-
nities in enhancing the infrastructure for resource 
use measurement, including for purposes of the 
value-based performance incentive program under 
subsection (q) and alternative payment models under 
section 1833(z), the Secretary shall undertake the 
steps described in the succeeding provisions of this 
subsection. 
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109 
‘‘(2) DEVELOPMENT OF CARE EPISODE AND PA-
TIENT
CONDITION
GROUPS
AND
CLASSIFICATION 
CODES.— 
‘‘(A) IN
GENERAL.—In order to classify 
similar patients into care episode groups and 
patient condition groups, the Secretary shall 
undertake the steps described in the succeeding 
provisions of this paragraph. 
‘‘(B) PUBLIC AVAILABILITY OF EXISTING 
EFFORTS TO DESIGN AN EPISODE GROUPER.— 
Not later than 120 days after the date of the 
enactment of this subsection, the Secretary 
shall post on the Internet website of the Cen-
ters for Medicare & Medicaid Services a list of 
the episode groups developed pursuant to sub-
section (n)(9)(A) and related descriptive infor-
mation. 
‘‘(C) STAKEHOLDER
INPUT.—The Sec-
retary shall accept, through the date that is 60 
days after the day the Secretary posts the list 
pursuant to subparagraph (B), suggestions 
from physician specialty societies, applicable 
practitioner organizations, and other stake-
holders for episode groups in addition to those 
posted pursuant to such subparagraph, and 
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110 
specific clinical criteria and patient characteris-
tics to classify patients into— 
‘‘(i) care episode groups; and 
‘‘(ii) patient condition groups. 
‘‘(D) DEVELOPMENT OF PROPOSED CLAS-
SIFICATION CODES.— 
‘‘(i) IN
GENERAL.—Taking into ac-
count the information described in sub-
paragraph (B) and the information re-
ceived under subparagraph (C), the Sec-
retary shall— 
‘‘(I) establish care episode groups 
and patient condition groups, which 
account for a target of an estimated 
2⁄3 of expenditures under parts A and 
B; and 
‘‘(II) 
assign 
codes 
to 
such 
groups. 
‘‘(ii) CARE EPISODE GROUPS.—In es-
tablishing the care episode groups under 
clause (i), the Secretary shall take into ac-
count— 
‘‘(I) the patient’s clinical prob-
lems at the time items and services 
are furnished during an episode of 
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care, such as the clinical conditions or 
diagnoses, whether or not inpatient 
hospitalization is anticipated or oc-
curs, and the principal procedures or 
services planned or furnished; and 
‘‘(II) other factors determined 
appropriate by the Secretary. 
‘‘(iii) PATIENT CONDITION GROUPS.— 
In 
establishing 
the 
patient 
condition 
groups under clause (i), the Secretary shall 
take into account— 
‘‘(I) the patient’s clinical history 
at the time of each medical visit, such 
as the patient’s combination of chron-
ic conditions, current health status, 
and recent significant history (such as 
hospitalization and major surgery dur-
ing a previous period, such as 3 
months); and 
‘‘(II) other factors determined 
appropriate by the Secretary, such as 
eligibility status under this title (in-
cluding 
eligibility 
under 
section 
226(a), 226(b), or 226A, and dual eli-
gibility under this title and title XIX). 
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‘‘(E) DRAFT CARE EPISODE AND PATIENT 
CONDITION
GROUPS
AND
CLASSIFICATION 
CODES.—Not later than 180 days after the end 
of the comment period described in subpara-
graph (C), the Secretary shall post on the 
Internet website of the Centers for Medicare & 
Medicaid Services a draft list of the care epi-
sode and patient condition codes established 
under subparagraph (D) (and the criteria and 
characteristics assigned to such code). 
‘‘(F) SOLICITATION OF INPUT.—The Sec-
retary shall seek, through the date that is 60 
days after the Secretary posts the list pursuant 
to subparagraph (E), comments from physician 
specialty societies, applicable practitioner orga-
nizations, and other stakeholders, including rep-
resentatives of individuals entitled to benefits 
under part A or enrolled under this part, re-
garding the care episode and patient condition 
groups (and codes) posted under subparagraph 
(E). In seeking such comments, the Secretary 
shall use one or more mechanisms (other than 
notice and comment rulemaking) that may in-
clude use of open door forums, town hall meet-
ings, or other appropriate mechanisms. 
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‘‘(G) OPERATIONAL
LIST
OF
CARE
EPI-
SODE AND PATIENT CONDITION GROUPS AND 
CODES.—Not later than 180 days after the end 
of the comment period described in subpara-
graph (F), taking into account the comments 
received under such subparagraph, the Sec-
retary shall post on the Internet website of the 
Centers for Medicare & Medicaid Services an 
operational list of care episode and patient con-
dition codes (and the criteria and characteris-
tics assigned to such code). 
‘‘(H) SUBSEQUENT REVISIONS.—Not later 
than November 1 of each year (beginning with 
2017), the Secretary shall, through rulemaking, 
make revisions to the operational lists of care 
episode and patient condition codes as the Sec-
retary determines may be appropriate. Such re-
visions may be based on experience, new infor-
mation 
developed 
pursuant 
to 
subsection 
(n)(9)(A), and input from the physician spe-
cialty societies, applicable practitioner organiza-
tions, and other stakeholders, including rep-
resentatives of individuals entitled to benefits 
under part A or enrolled under this part. 
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‘‘(3) ATTRIBUTION
OF
PATIENTS
TO
PHYSI-
CIANS OR PRACTITIONERS.— 
‘‘(A) IN GENERAL.—In order to facilitate 
the attribution of patients and episodes (in 
whole or in part) to one or more physicians or 
applicable practitioners furnishing items and 
services, the Secretary shall undertake the steps 
described in the succeeding provisions of this 
paragraph. 
‘‘(B) DEVELOPMENT
OF
PATIENT
RELA-
TIONSHIP CATEGORIES AND CODES.—The Sec-
retary shall develop patient relationship cat-
egories and codes that define and distinguish 
the relationship and responsibility of a physi-
cian or applicable practitioner with a patient at 
the time of furnishing an item or service. Such 
patient relationship categories shall include dif-
ferent relationships of the physician or applica-
ble practitioner to the patient (and the codes 
may reflect combinations of such categories), 
such as a physician or applicable practitioner 
who— 
‘‘(i) considers themself to have the 
primary responsibility for the general and 
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ongoing care for the patient over extended 
periods of time; 
‘‘(ii) considers themself to be the lead 
physician or practitioner and who furnishes 
items and services and coordinates care 
furnished by other physicians or practi-
tioners for the patient during an acute epi-
sode; 
‘‘(iii) furnishes items and services to 
the patient on a continuing basis during an 
acute episode of care, but in a supportive 
rather than a lead role; 
‘‘(iv) furnishes items and services to 
the patient on an occasional basis, usually 
at the request of another physician or 
practitioner; or 
‘‘(v) furnishes items and services only 
as ordered by another physician or practi-
tioner. 
‘‘(C) DRAFT LIST OF PATIENT RELATION-
SHIP CATEGORIES AND CODES.—Not later than 
270 days after the date of the enactment of this 
subsection, the Secretary shall post on the 
Internet website of the Centers for Medicare & 
Medicaid Services a draft list of the patient re-
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lationship categories and codes developed under 
subparagraph (B). 
‘‘(D) STAKEHOLDER
INPUT.—The Sec-
retary shall seek, through the date that is 60 
days after the Secretary posts the list pursuant 
to subparagraph (C), comments from physician 
specialty societies, applicable practitioner orga-
nizations, and other stakeholders, including rep-
resentatives of individuals entitled to benefits 
under part A or enrolled under this part, re-
garding the patient relationship categories and 
codes posted under subparagraph (C). In seek-
ing such comments, the Secretary shall use one 
or more mechanisms (other than notice and 
comment rulemaking) that may include open 
door forums, town hall meetings, or other ap-
propriate mechanisms. 
‘‘(E) OPERATIONAL LIST OF PATIENT RE-
LATIONSHIP
CATEGORIES
AND
CODES.—Not 
later than 180 days after the end of the com-
ment period described in subparagraph (D), 
taking into account the comments received 
under such subparagraph, the Secretary shall 
post on the Internet website of the Centers for 
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Medicare & Medicaid Services an operational 
list of patient relationship categories and codes. 
‘‘(F) SUBSEQUENT REVISIONS.—Not later 
than November 1 of each year (beginning with 
2017), the Secretary shall, through rulemaking, 
make revisions to the operational list of patient 
relationship categories and codes as the Sec-
retary determines appropriate. Such revisions 
may be based on experience, new information 
developed pursuant to subsection (n)(9)(A), and 
input from the physician specialty societies, ap-
plicable practitioner organizations, and other 
stakeholders, including representatives of indi-
viduals entitled to benefits under part A or en-
rolled under this part. 
‘‘(4) REPORTING
OF
INFORMATION
FOR
RE-
SOURCE USE MEASUREMENT.—Claims submitted for 
items and services furnished by a physician or appli-
cable practitioner on or after January 1, 2017, shall, 
as determined appropriate by the Secretary, in-
clude— 
‘‘(A) applicable codes established under 
paragraphs (2) and (3); and 
‘‘(B) the national provider identifier of the 
ordering physician or applicable practitioner (if 
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different from the billing physician or applicable 
practitioner). 
‘‘(5) METHODOLOGY FOR RESOURCE USE ANAL-
YSIS.— 
‘‘(A) IN GENERAL.—In order to evaluate 
the resources used to treat patients (with re-
spect to care episode and patient condition 
groups), the Secretary shall— 
‘‘(i) use the patient relationship codes 
reported on claims pursuant to paragraph 
(4) to attribute patients (in whole or in 
part) to one or more physicians and appli-
cable practitioners; 
‘‘(ii) use the care episode and patient 
condition codes reported on claims pursu-
ant to paragraph (4) as a basis to compare 
similar patients and care episodes and pa-
tient condition groups; and 
‘‘(iii) conduct an analysis of resource 
use (with respect to care episodes and pa-
tient condition groups of such patients), as 
the Secretary determines appropriate. 
‘‘(B) ANALYSIS OF PATIENTS OF PHYSI-
CIANS AND PRACTITIONERS.—In conducting the 
analysis described in subparagraph (A)(iii) with 
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respect to patients attributed to physicians and 
applicable practitioners, the Secretary shall, as 
feasible— 
‘‘(i) use the claims data experience of 
such patients by patient condition codes 
during a common period, such as 12 
months; and 
‘‘(ii) use the claims data experience of 
such patients by care episode codes— 
‘‘(I) in the case of episodes with-
out a hospitalization, during periods 
of time (such as the number of days) 
determined appropriate by the Sec-
retary; and 
‘‘(II) in the case of episodes with 
a hospitalization, during periods of 
time (such as the number of days) be-
fore, during, and after the hospitaliza-
tion. 
‘‘(C) MEASUREMENT OF RESOURCE USE.— 
In measuring such resource use, the Sec-
retary— 
‘‘(i) shall use per patient total allowed 
charges for all services under part A and 
this part (and, if the Secretary determines 
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appropriate, part D) for the analysis of pa-
tient resource use, by care episode codes 
and by patient condition codes; and 
‘‘(ii) may, as determined appropriate, 
use other measures of allowed charges 
(such as subtotals for categories of items 
and services) and measures of utilization of 
items and services (such as frequency of 
specific items and services and the ratio of 
specific items and services among attrib-
uted patients or episodes). 
‘‘(D) STAKEHOLDER
INPUT.—The Sec-
retary shall seek comments from the physician 
specialty societies, applicable practitioner orga-
nizations, and other stakeholders, including rep-
resentatives of individuals entitled to benefits 
under part A or enrolled under this part, re-
garding the resource use methodology estab-
lished pursuant to this paragraph. In seeking 
comments the Secretary shall use one or more 
mechanisms (other than notice and comment 
rulemaking) that may include open door fo-
rums, town hall meetings, or other appropriate 
mechanisms. 
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‘‘(6) IMPLEMENTATION.—To the extent that 
the Secretary contracts with an entity to carry out 
any part of the provisions of this subsection, the 
Secretary may not contract with an entity or an en-
tity with a subcontract if the entity or subcon-
tracting entity currently makes recommendations to 
the Secretary on relative values for services under 
the fee schedule for physicians’ services under this 
section. 
‘‘(7) LIMITATION.—There shall be no adminis-
trative or judicial review under section 1869, section 
1878, or otherwise of— 
‘‘(A) care episode and patient condition 
groups and codes established under paragraph 
(2); 
‘‘(B) patient relationship categories and 
codes established under paragraph (3); and 
‘‘(C) measurement of, and analyses of re-
source use with respect to, care episode and pa-
tient condition codes and patient relationship 
codes pursuant to paragraph (5). 
‘‘(8) ADMINISTRATION.—Chapter 35 of title 44, 
United States Code, shall not apply to this section. 
‘‘(9) DEFINITIONS.—In this section: 
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‘‘(A) PHYSICIAN.—The term ‘physician’ 
has the meaning given such term in section 
1861(r)(1). 
‘‘(B) APPLICABLE
PRACTITIONER.—The 
term ‘applicable practitioner’ means— 
‘‘(i) a physician assistant, nurse prac-
titioner, and clinical nurse specialist (as 
such 
terms 
are 
defined 
in 
section 
1861(aa)(5)), and a certified registered 
nurse anesthetist (as defined in section 
1861(bb)(2)); and 
‘‘(ii) beginning January 1, 2018, such 
other eligible professionals (as defined in 
subsection (k)(3)(B)) as specified by the 
Secretary. 
‘‘(10) CLARIFICATION.—The provisions of sec-
tions 1890(b)(7) and 1890A shall not apply to this 
subsection.’’. 
SEC. 3. PRIORITIES AND FUNDING FOR MEASURE DEVEL-
OPMENT. 
Section 1848 of the Social Security Act (42 U.S.C. 
1395w–4), as amended by subsections (c) and (g) of sec-
tion 2, is further amended by inserting at the end the fol-
lowing new subsection: 
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‘‘(s) PRIORITIES AND FUNDING FOR MEASURE DE-
VELOPMENT.— 
‘‘(1) PLAN IDENTIFYING MEASURE DEVELOP-
MENT PRIORITIES AND TIMELINES.— 
‘‘(A) DRAFT
MEASURE
DEVELOPMENT 
PLAN.—Not later than January 1, 2015, the 
Secretary shall develop, and post on the Inter-
net website of the Centers for Medicare & Med-
icaid Services, a draft plan for the development 
of quality measures for application under the 
applicable provisions (as defined in paragraph 
(5)). Under such plan the Secretary shall— 
‘‘(i) address how measures used by 
private payers and integrated delivery sys-
tems could be incorporated under title 
XVIII; 
‘‘(ii) describe how coordination, to the 
extent possible, will occur across organiza-
tions developing such measures; and 
‘‘(iii) take into account how clinical 
best practices and clinical practice guide-
lines should be used in the development of 
quality measures. 
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‘‘(B) QUALITY DOMAINS.—For purposes of 
this subsection, the term ‘quality domains’ 
means at least the following domains: 
‘‘(i) Clinical care. 
‘‘(ii) Safety. 
‘‘(iii) Care coordination. 
‘‘(iv) Patient and caregiver experience. 
‘‘(v) Population health and preven-
tion. 
‘‘(C) CONSIDERATION.—In developing the 
draft plan under this paragraph, the Secretary 
shall consider— 
‘‘(i) gap analyses conducted by the en-
tity with a contract under section 1890(a) 
or other contractors or entities; 
‘‘(ii) whether measures are applicable 
across health care settings; 
‘‘(iii) clinical practice improvement ac-
tivities 
submitted 
under 
subsection 
(q)(2)(C)(iv) for identifying possible areas 
for future measure development and identi-
fying existing gaps with respect to such 
measures; and 
‘‘(iv) the quality domains applied 
under this subsection. 
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‘‘(D) PRIORITIES.—In developing the draft 
plan under this paragraph, the Secretary shall 
give priority to the following types of measures: 
‘‘(i) Outcome measures, including pa-
tient reported outcome and functional sta-
tus measures. 
‘‘(ii) Patient experience measures. 
‘‘(iii) Care coordination measures. 
‘‘(iv) Measures of appropriate use of 
services, including measures of over use. 
‘‘(E) STAKEHOLDER
INPUT.—The Sec-
retary shall accept through March 1, 2015, 
comments on the draft plan posted under para-
graph (1)(A) from the public, including health 
care providers, payers, consumers, and other 
stakeholders. 
‘‘(F) 
FINAL
MEASURE
DEVELOPMENT 
PLAN.—Not later than May 1, 2015, taking 
into account the comments received under this 
subparagraph, the Secretary shall finalize the 
plan and post on the Internet website of the 
Centers for Medicare & Medicaid Services an 
operational plan for the development of quality 
measures for use under the applicable provi-
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sions. Such plan shall be updated as appro-
priate. 
‘‘(2) CONTRACTS AND OTHER ARRANGEMENTS 
FOR QUALITY MEASURE DEVELOPMENT.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
enter into contracts or other arrangements with 
entities for the purpose of developing, improv-
ing, updating, or expanding in accordance with 
the plan under paragraph (1) quality measures 
for application under the applicable provisions. 
Such entities shall include organizations with 
quality measure development expertise. 
‘‘(B) PRIORITIZATION.— 
‘‘(i) IN
GENERAL.—In entering into 
contracts or other arrangements under 
subparagraph (A), the Secretary shall give 
priority to the development of the types of 
measures described in paragraph (1)(D). 
‘‘(ii) CONSIDERATION.—In selecting 
measures for development under this sub-
section, the Secretary shall consider— 
‘‘(I) 
whether 
such 
measures 
would be electronically specified; and 
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‘‘(II) clinical practice guidelines 
to the extent that such guidelines 
exist. 
‘‘(3) ANNUAL REPORT BY THE SECRETARY.— 
‘‘(A) IN GENERAL.—Not later than May 1, 
2016, and annually thereafter, the Secretary 
shall post on the Internet website of the Cen-
ters for Medicare & Medicaid Services a report 
on the progress made in developing quality 
measures for application under the applicable 
provisions. 
‘‘(B) REQUIREMENTS.—Each report sub-
mitted pursuant to subparagraph (A) shall in-
clude the following: 
‘‘(i) A description of the Secretary’s 
efforts to implement this paragraph. 
‘‘(ii) With respect to the measures de-
veloped during the previous year— 
‘‘(I) a description of the total 
number of quality measures developed 
and the types of such measures, such 
as an outcome or patient experience 
measure; 
‘‘(II) the name of each measure 
developed; 
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‘‘(III) the name of the developer 
and steward of each measure; 
‘‘(IV) with respect to each type 
of measure, an estimate of the total 
amount expended under this title to 
develop all measures of such type; and 
‘‘(V) whether the measure would 
be electronically specified. 
‘‘(iii) With respect to measures in de-
velopment at the time of the report— 
‘‘(I) the information described in 
clause (ii), if available; and 
‘‘(II) a timeline for completion of 
the development of such measures. 
‘‘(iv) A description of any updates to 
the plan under paragraph (1) (including 
newly identified gaps and the status of pre-
viously identified gaps) and the inventory 
of measures applicable under the applicable 
provisions. 
‘‘(v) Other information the Secretary 
determines to be appropriate. 
‘‘(4) STAKEHOLDER
INPUT.—With respect to 
paragraph (1), the Secretary shall seek stakeholder 
input with respect to— 
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‘‘(A) the identification of gaps where no 
quality measures exist, particularly with respect 
to the types of measures described in paragraph 
(1)(D); 
‘‘(B) prioritizing quality measure develop-
ment to address such gaps; and 
‘‘(C) other areas related to quality measure 
development determined appropriate by the Sec-
retary. 
‘‘(5) 
DEFINITION
OF
APPLICABLE
PROVI-
SIONS.—In this subsection, the term ‘applicable pro-
visions’ means the following provisions: 
‘‘(A) Subsection (q)(2)(B)(i). 
‘‘(B) Section 1833(z)(2)(C). 
‘‘(6) FUNDING.—For purposes of carrying out 
this subsection, the Secretary shall provide for the 
transfer, from the Federal Supplementary Medical 
Insurance Trust Fund under section 1841, of 
$15,000,000 to the Centers for Medicare & Medicaid 
Services Program Management Account for each of 
fiscal years 2014 through 2018. Amounts trans-
ferred under this paragraph shall remain available 
through the end of fiscal year 2021.’’. 
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SEC. 4. ENCOURAGING CARE MANAGEMENT FOR INDIVID-
UALS WITH CHRONIC CARE NEEDS. 
(a) IN GENERAL.—Section 1848(b) of the Social Se-
curity Act (42 U.S.C. 1395w–4(b)) is amended by adding 
at the end the following new paragraph: 
‘‘(8) ENCOURAGING
CARE
MANAGEMENT
FOR 
INDIVIDUALS WITH CHRONIC CARE NEEDS.— 
‘‘(A) IN GENERAL.—In order to encourage 
the management of care by an applicable pro-
vider (as defined in subparagraph (B)) for indi-
viduals with chronic care needs the Secretary 
shall— 
‘‘(i) establish one or more HCPCS 
codes for chronic care management serv-
ices for such individuals; and 
‘‘(ii) subject to subparagraph (D), 
make payment (as the Secretary deter-
mines to be appropriate) under this section 
for such management services furnished on 
or after January 1, 2015, by an applicable 
provider. 
‘‘(B) APPLICABLE PROVIDER DEFINED.— 
For purposes of this paragraph, the term ‘ap-
plicable provider’ means a physician (as defined 
in section 1861(r)(1)), physician assistant or 
nurse practitioner (as defined in section 
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1861(aa)(5)(A)), or clinical nurse specialist (as 
defined in section 1861(aa)(5)(B)) who fur-
nishes services as part of a patient-centered 
medical home or a comparable specialty practice 
that— 
‘‘(i) is recognized as such a medical 
home or comparable specialty practice by 
an organization that is recognized by the 
Secretary for purposes of such recognition 
as such a medical home or practice; or 
‘‘(ii) 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) POLICIES RELATING TO PAYMENT.— 
In carrying out this paragraph, with respect to 
chronic care management services, the Sec-
retary shall— 
‘‘(i) make payment to only one appli-
cable provider for such services furnished 
to an individual during a period; 
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‘‘(ii) not make payment under sub-
paragraph (A) if such payment would be 
duplicative of payment that is otherwise 
made under this title for such services 
(such as in the case of hospice care or 
home health services); and 
‘‘(iii) not require that an annual 
wellness visit (as defined in section 
1861(hhh)) or an initial preventive phys-
ical examination (as defined in section 
1861(ww)) be furnished as a condition of 
payment for such management services.’’. 
(b) EDUCATION AND OUTREACH.— 
(1) CAMPAIGN.— 
(A) 
IN
GENERAL.—The 
Secretary 
of 
Health and Human Services (in this subsection 
referred to as the ‘‘Secretary’’) shall conduct an 
education and outreach campaign to inform 
professionals who furnish items and services 
under part B of title XVIII of the Social Secu-
rity Act and individuals enrolled under such 
part of the benefits of chronic care management 
services described in section 1848(b)(8) of the 
Social Security Act, as added by subsection (a), 
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and encourage such individuals with chronic 
care needs to receive such services. 
(B) 
REQUIREMENTS.—Such 
campaign 
shall— 
(i) be directed by the Office of Rural 
Health Policy of the Department of Health 
and Human Services and the Office of Mi-
nority Health of the Centers for Medicare 
& Medicaid Services; and 
(ii) focus on encouraging participation 
by underserved rural populations and ra-
cial and ethnic minority populations. 
(2) REPORT.— 
(A) IN GENERAL.—Not later than Decem-
ber 31, 2017, the Secretary shall submit to 
Congress a report on the use of chronic care 
management services described in such section 
1848(b)(8) by individuals living in rural areas 
and by racial and ethnic minority populations. 
Such report shall— 
(i) identify barriers to receiving chron-
ic care management services; and 
(ii) make recommendations for in-
creasing the appropriate use of chronic 
care management services. 
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SEC. 5. ENSURING ACCURATE VALUATION OF SERVICES 
UNDER THE PHYSICIAN FEE SCHEDULE. 
(a) AUTHORITY TO COLLECT AND USE INFORMA-
TION ON PHYSICIANS’ SERVICES IN THE DETERMINATION 
OF RELATIVE VALUES.— 
(1) 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) AUTHORITY TO COLLECT AND USE 
INFORMATION
ON
PHYSICIANS’ SERVICES
IN 
THE DETERMINATION OF RELATIVE VALUES.— 
‘‘(i) COLLECTION OF INFORMATION.— 
Notwithstanding any other provision of 
law, the Secretary may collect or obtain in-
formation on the resources directly or indi-
rectly related to furnishing services for 
which payment is made under the fee 
schedule established under subsection (b). 
Such information may be collected or ob-
tained from any eligible professional or any 
other source. 
‘‘(ii) USE
OF
INFORMATION.—Not-
withstanding any other provision of law, 
subject to clause (v), the Secretary may 
(as the Secretary determines appropriate) 
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use information collected or obtained pur-
suant to clause (i) in the determination of 
relative values for services under this sec-
tion. 
‘‘(iii) TYPES OF INFORMATION.—The 
types of information described in clauses 
(i) and (ii) may, at the Secretary’s discre-
tion, include any or all of the following: 
‘‘(I) Time involved in furnishing 
services. 
‘‘(II) Amounts and types of prac-
tice expense inputs involved with fur-
nishing services. 
‘‘(III) Prices (net of any dis-
counts) for practice expense inputs, 
which may include paid invoice prices 
or other documentation or records. 
‘‘(IV) Overhead and accounting 
information for practices of physicians 
and other suppliers. 
‘‘(V) Any other element that 
would improve the valuation of serv-
ices under this section. 
‘‘(iv) 
INFORMATION
COLLECTION 
MECHANISMS.—Information may be col-
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lected or obtained pursuant to this sub-
paragraph from any or all of the following: 
‘‘(I) Surveys of physicians, other 
suppliers, providers of services, manu-
facturers, and vendors. 
‘‘(II) Surgical logs, billing sys-
tems, or other practice or facility 
records. 
‘‘(III) Electronic health records. 
‘‘(IV) Any other mechanism de-
termined appropriate by the Sec-
retary. 
‘‘(v) TRANSPARENCY OF USE OF IN-
FORMATION.— 
‘‘(I) IN
GENERAL.—Subject to 
subclauses (II) and (III), if the Sec-
retary uses information collected or 
obtained under this subparagraph in 
the determination of relative values 
under this subsection, the Secretary 
shall disclose the information source 
and discuss the use of such informa-
tion in such determination of relative 
values through notice and comment 
rulemaking. 
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‘‘(II) THRESHOLDS FOR USE.— 
The Secretary may establish thresh-
olds in order to use such information, 
including the exclusion of information 
collected or obtained from eligible pro-
fessionals who use very high resources 
(as determined by the Secretary) in 
furnishing a service. 
‘‘(III) DISCLOSURE OF INFORMA-
TION.—The Secretary shall make ag-
gregate information available under 
this subparagraph but shall not dis-
close information in a form or manner 
that identifies an eligible professional 
or a group practice, or information 
collected or obtained pursuant to a 
nondisclosure agreement. 
‘‘(vi) INCENTIVE TO PARTICIPATE.— 
The Secretary may provide for such pay-
ments under this part to an eligible profes-
sional that submits such solicited informa-
tion under this subparagraph as the Sec-
retary determines appropriate in order to 
compensate such eligible professional for 
such submission. Such payments shall be 
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provided in a form and manner specified 
by the Secretary. 
‘‘(vii) ADMINISTRATION.—Chapter 35 
of title 44, United States Code, shall not 
apply to information collected or obtained 
under this subparagraph. 
‘‘(viii) DEFINITION OF ELIGIBLE PRO-
FESSIONAL.—In this subparagraph, the 
term ‘eligible professional’ has the meaning 
given such term in subsection (k)(3)(B). 
‘‘(ix) FUNDING.—For purposes of car-
rying out this subparagraph, in addition to 
funds otherwise appropriated, the Sec-
retary shall provide for the transfer, from 
the Federal Supplementary Medical Insur-
ance Trust Fund under section 1841, of 
$2,000,000 to the Centers for Medicare & 
Medicaid Services Program Management 
Account for each fiscal year beginning with 
fiscal year 2014. Amounts transferred 
under the preceding sentence for a fiscal 
year shall be available until expended.’’. 
(2) 
LIMITATION
ON
REVIEW.—Section 
1848(i)(1) of the Social Security Act (42 U.S.C. 
1395w–4(i)(1)) is amended— 
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(A) in subparagraph (D), by striking 
‘‘and’’ at the end; 
(B) in subparagraph (E), by striking the 
period at the end and inserting ‘‘, and’’; and 
(C) by adding at the end the following new 
subparagraph: 
‘‘(F) the collection and use of information 
in the determination of relative values under 
subsection (c)(2)(M).’’. 
(b) AUTHORITY FOR ALTERNATIVE APPROACHES TO 
ESTABLISHING
PRACTICE
EXPENSE
RELATIVE
VAL-
UES.—Section 1848(c)(2) of the Social Security Act (42 
U.S.C. 1395w–4(c)(2)), as amended by subsection (a), is 
amended by adding at the end the following new subpara-
graph: 
‘‘(N) AUTHORITY FOR ALTERNATIVE AP-
PROACHES
TO
ESTABLISHING
PRACTICE
EX-
PENSE RELATIVE VALUES.—The Secretary may 
establish or adjust practice expense relative val-
ues under this subsection using cost, charge, or 
other data from suppliers or providers of serv-
ices, including information collected or obtained 
under subparagraph (M).’’. 
(c) REVISED AND EXPANDED IDENTIFICATION OF 
POTENTIALLY
MISVALUED
CODES.—Section 
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1848(c)(2)(K)(ii) of the Social Security Act (42 U.S.C. 
1395w–4(c)(2)(K)(ii)) is amended to read as follows: 
‘‘(ii) 
IDENTIFICATION
OF
POTEN-
TIALLY MISVALUED CODES.—For purposes 
of identifying potentially misvalued codes 
pursuant to clause (i)(I), the Secretary 
shall examine codes (and families of codes 
as appropriate) based on any or all of the 
following criteria: 
‘‘(I) Codes that have experienced 
the fastest growth. 
‘‘(II) Codes that have experi-
enced substantial changes in practice 
expenses. 
‘‘(III) Codes that describe new 
technologies or services within an ap-
propriate time period (such as 3 
years) after the relative values are ini-
tially established for such codes. 
‘‘(IV) Codes which are multiple 
codes that are frequently billed in con-
junction with furnishing a single serv-
ice. 
‘‘(V) Codes with low relative val-
ues, particularly those that are often 
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billed multiple times for a single treat-
ment. 
‘‘(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 substantial change 
in the hospital length of stay or proce-
dure time. 
‘‘(IX) Codes for which there may 
be a change in the typical site of serv-
ice since the code was last valued. 
‘‘(X) Codes for which there is a 
significant difference in payment for 
the same service between different 
sites of service. 
‘‘(XI) Codes for which there may 
be anomalies in relative values within 
a family of codes. 
‘‘(XII) Codes for services where 
there may be efficiencies when a serv-
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ice is furnished at the same time as 
other services. 
‘‘(XIII) Codes with high intra- 
service work per unit of time. 
‘‘(XIV) Codes with high practice 
expense relative value units. 
‘‘(XV) Codes with high cost sup-
plies. 
‘‘(XVI) Codes as determined ap-
propriate by the Secretary.’’. 
(d) TARGET FOR RELATIVE VALUE ADJUSTMENTS 
FOR MISVALUED SERVICES.— 
(1) IN
GENERAL.—Section 1848(c)(2) of the 
Social Security Act (42 U.S.C. 1395w–4(c)(2)), as 
amended by subsections (a) and (b), is amended by 
adding at the end the following new subparagraph: 
‘‘(O) TARGET FOR RELATIVE VALUE AD-
JUSTMENTS FOR MISVALUED SERVICES.—With 
respect to fee schedules established for each of 
2015 through 2018, the following shall apply: 
‘‘(i) DETERMINATION OF NET REDUC-
TION IN EXPENDITURES.—For each year, 
the Secretary shall determine the esti-
mated net reduction in expenditures under 
the fee schedule under this section with re-
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spect to the year as a result of adjust-
ments to the relative values established 
under this paragraph for misvalued codes. 
‘‘(ii) BUDGET NEUTRAL REDISTRIBU-
TION
OF
FUNDS
IF
TARGET
MET
AND 
COUNTING OVERAGES TOWARDS THE TAR-
GET FOR THE SUCCEEDING YEAR.—If the 
estimated net reduction in expenditures de-
termined under clause (i) for the year is 
equal to or greater than the target for the 
year— 
‘‘(I) reduced expenditures attrib-
utable to such adjustments shall be 
redistributed for the year in a budget 
neutral manner in accordance with 
subparagraph (B)(ii)(II); and 
‘‘(II) the amount by which such 
reduced expenditures exceeds the tar-
get for the year shall be treated as a 
reduction in expenditures described in 
clause (i) for the succeeding year, for 
purposes of determining whether the 
target has or has not been met under 
this subparagraph with respect to that 
year. 
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(2) 
CONFORMING
AMENDMENT.—Section 
1848(c)(2)(B)(v) of the Social Security Act (42 
U.S.C. 1395w–4(c)(2)(B)(v)) is amended by adding 
at the end the following new subclause: 
‘‘(VIII) 
REDUCTIONS
FOR 
MISVALUED SERVICES IF TARGET NOT 
MET.—Effective for fee schedules be-
ginning with 2015, reduced expendi-
tures attributable to the application of 
the target recapture amount described 
in subparagraph (O)(iii).’’. 
(e) PHASE-IN
OF SIGNIFICANT RELATIVE VALUE 
UNIT (RVU) REDUCTIONS.— 
(1) IN GENERAL.—Section 1848(c) of the So-
cial Security Act (42 U.S.C. 1395w–4(c)) is amend-
ed by adding at the end the following new para-
graph: 
‘‘(7) PHASE-IN
OF
SIGNIFICANT
RELATIVE 
VALUE UNIT (RVU) REDUCTIONS.—Effective for fee 
schedules established beginning with 2015, if the 
total relative value units for a service for a year 
would otherwise be decreased by an estimated 
amount equal to or greater than 20 percent as com-
pared to the total relative value units for the pre-
vious year, the applicable adjustments in work, prac-
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tice expense, and malpractice relative value units 
shall be phased-in over a 2-year period.’’. 
(2) 
CONFORMING
AMENDMENTS.—Section 
1848(c)(2) of the Social Security Act (42 U.S.C. 
1395w–4(c)(2)) is amended— 
(A) in subparagraph (B)(ii)(I), by striking 
‘‘subclause (II)’’ and inserting ‘‘subclause (II) 
and paragraph (7)’’; and 
(B) in subparagraph (K)(iii)(VI)— 
(i) by striking ‘‘provisions of subpara-
graph (B)(ii)(II)’’ and inserting ‘‘provi-
sions of subparagraph (B)(ii)(II) and para-
graph (7)’’; and 
(ii) by striking ‘‘under subparagraph 
(B)(ii)(II)’’ and inserting ‘‘under subpara-
graph (B)(ii)(I)’’. 
(f) AUTHORITY TO SMOOTH RELATIVE VALUES 
WITHIN GROUPS OF SERVICES.—Section 1848(c)(2)(C) of 
the Social Security Act (42 U.S.C. 1395w–4(c)(2)(C)) is 
amended— 
(1) in each of clauses (i) and (iii), by striking 
‘‘the service’’ and inserting ‘‘the service or group of 
services’’ each place it appears; and 
(2) in the first sentence of clause (ii), by insert-
ing ‘‘or group of services’’ before the period. 
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(g) GAO STUDY AND REPORT ON RELATIVE VALUE 
SCALE UPDATE COMMITTEE.— 
(1) STUDY.—The Comptroller General of the 
United States (in this subsection referred to as the 
‘‘Comptroller General’’) shall conduct a study of the 
processes used by the Relative Value Scale Update 
Committee (RUC) to provide recommendations to 
the Secretary of Health and Human Services regard-
ing relative values for specific services under the 
Medicare physician fee schedule under section 1848 
of the Social Security Act (42 U.S.C. 1395w–4). 
(2) REPORT.—Not later than 1 year after the 
date of the enactment of this Act, the Comptroller 
General shall submit to Congress a report containing 
the results of the study conducted under paragraph 
(1). 
(h) ADJUSTMENT TO MEDICARE PAYMENT LOCAL-
ITIES.— 
(1) IN GENERAL.—Section 1848(e) of the So-
cial Security Act (42 U.S.C. 1395w–4(e)) is amend-
ed by adding at the end the following new para-
graph: 
‘‘(6) USE OF MSAS AS FEE SCHEDULE AREAS IN 
CALIFORNIA.— 
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‘‘(A) IN
GENERAL.—Subject to the suc-
ceeding provisions of this paragraph and not-
withstanding the previous provisions of this 
subsection, for services furnished on or after 
January 1, 2017, the fee schedule areas used 
for payment 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 December 31 of the previous year, shall 
be a fee schedule area. 
‘‘(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 
LOCALITY 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 subpara-
graph (C), the geographic index values to 
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be applied under this subsection for such 
year shall be equal to the sum of the fol-
lowing: 
‘‘(I) 
CURRENT
LAW
COMPO-
NENT.—The old weighting factor (de-
scribed in clause (ii)) for such year 
multiplied by the geographic index 
values 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
COMPO-
NENT.—The 
MSA-based 
weighting 
factor (described in clause (iii)) for 
such year multiplied by the geographic 
index values computed for the fee 
schedule area under subparagraph (A) 
for the year (determined without re-
gard to this subparagraph). 
‘‘(ii) OLD WEIGHTING FACTOR.—The 
old weighting factor described in this 
clause— 
‘‘(I) for 2017, is 5⁄6; and 
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‘‘(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 
described 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 
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 local-
ity. 
‘‘(ii) Payment locality 3. 
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‘‘(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 established in accordance with this para-
graph.’’. 
(2) CONFORMING AMENDMENT TO DEFINITION 
OF FEE SCHEDULE AREA.—Section 1848(j)(2) of the 
Social 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’’. 
(i) DISCLOSURE
OF DATA USED TO ESTABLISH 
MULTIPLE PROCEDURE PAYMENT REDUCTION POLICY.— 
The Secretary of Health and Human Services shall make 
publicly available the information used to establish the 
multiple procedure payment reduction policy to the profes-
sional component of imaging services in the final rule pub-
lished 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). 
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SEC. 6. PROMOTING EVIDENCE-BASED CARE. 
(a) IN GENERAL.—Section 1834 of the Social Secu-
rity Act (42 U.S.C. 1395m) is amended by adding at the 
end the following new subsection: 
‘‘(p) RECOGNIZING APPROPRIATE USE CRITERIA FOR 
CERTAIN IMAGING SERVICES.— 
‘‘(1) PROGRAM ESTABLISHED.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
establish a program to promote the use of ap-
propriate use criteria (as defined in subpara-
graph (B)) for applicable imaging services (as 
defined in subparagraph (C)) furnished in an 
applicable setting (as defined in subparagraph 
(D)) by ordering professionals and furnishing 
professionals (as defined in subparagraphs (E) 
and (F), respectively). 
‘‘(B) APPROPRIATE
USE
CRITERIA
DE-
FINED.—In this subsection, the term ‘appro-
priate use criteria’ means criteria, only devel-
oped or endorsed by national professional med-
ical specialty societies or other provider-led enti-
ties, to assist ordering professionals and fur-
nishing professionals in making the most appro-
priate treatment decision for a specific clinical 
condition. To the extent feasible, such criteria 
shall be evidence-based. 
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‘‘(C) APPLICABLE IMAGING SERVICE DE-
FINED.—In this subsection, the term ‘applicable 
imaging service’ means an advanced diagnostic 
imaging service (as defined in subsection 
(e)(1)(B)) for which the Secretary determines— 
‘‘(i) one or more applicable appro-
priate use criteria specified under para-
graph (2) apply; 
‘‘(ii) there are one or more qualified 
clinical decision support mechanisms listed 
under paragraph (3)(C); and 
‘‘(iii) one or more of such mechanisms 
is available free of charge. 
‘‘(D) APPLICABLE SETTING DEFINED.—In 
this subsection, the term ‘applicable setting’ 
means a physician’s office, a hospital outpatient 
department (including an emergency depart-
ment), an ambulatory surgical center, and any 
other provider-led outpatient setting determined 
appropriate by the Secretary. 
‘‘(E) 
ORDERING
PROFESSIONAL
DE-
FINED.—In this subsection, the term ‘ordering 
professional’ means a physician (as defined in 
section 1861(r)) or a practitioner described in 
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section 1842(b)(18)(C) who orders an applica-
ble imaging service for an individual. 
‘‘(F) FURNISHING
PROFESSIONAL
DE-
FINED.—In this subsection, the term ‘fur-
nishing professional’ means a physician (as de-
fined in section 1861(r)) or a practitioner de-
scribed in section 1842(b)(18)(C) who furnishes 
an applicable imaging service for an individual. 
‘‘(2) ESTABLISHMENT OF APPLICABLE APPRO-
PRIATE USE CRITERIA.— 
‘‘(A) IN
GENERAL.—Not later than No-
vember 15, 2015, the Secretary shall through 
rulemaking, and in consultation with physi-
cians, practitioners, and other stakeholders, 
specify applicable appropriate use criteria for 
applicable imaging services only from among 
appropriate use criteria developed or endorsed 
by national professional medical specialty soci-
eties or other provider-led entities. 
‘‘(B) CONSIDERATIONS.—In specifying ap-
plicable appropriate use criteria under subpara-
graph (A), the Secretary shall take into account 
whether the criteria— 
‘‘(i) have stakeholder consensus; 
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‘‘(ii) are scientifically valid and evi-
dence based; and 
‘‘(iii) are based on studies that are 
published and reviewable by stakeholders. 
‘‘(C) REVISIONS.—The Secretary shall re-
view, on an annual basis, the specified applica-
ble appropriate use criteria to determine if 
there is a need to update or revise (as appro-
priate) such specification of applicable appro-
priate use criteria and make such updates or 
revisions through rulemaking. 
‘‘(D) TREATMENT OF MULTIPLE APPLICA-
BLE APPROPRIATE USE CRITERIA.—In the case 
where the Secretary determines that more than 
one appropriate use criteria applies with respect 
to an applicable imaging service, the Secretary 
shall permit one or more applicable appropriate 
use criteria under this paragraph for the serv-
ice. 
‘‘(3) MECHANISMS
FOR
CONSULTATION
WITH 
APPLICABLE APPROPRIATE USE CRITERIA.— 
‘‘(A) IDENTIFICATION OF MECHANISMS TO 
CONSULT WITH APPLICABLE APPROPRIATE USE 
CRITERIA.— 
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‘‘(i) IN
GENERAL.—The Secretary 
shall specify qualified clinical decision sup-
port mechanisms that could be used by or-
dering professionals to consult with appli-
cable appropriate use criteria for applicable 
imaging services. 
‘‘(ii) CONSULTATION.—The Secretary 
shall consult with physicians, practitioners, 
health care technology experts, and other 
stakeholders in specifying mechanisms 
under this paragraph. 
‘‘(iii) INCLUSION OF CERTAIN MECHA-
NISMS.—Mechanisms specified under this 
paragraph may include any or all of the 
following that meet the requirements de-
scribed in subparagraph (B)(ii): 
‘‘(I) Use of clinical decision sup-
port modules in certified EHR tech-
nology 
(as 
defined 
in 
section 
1848(o)(4)). 
‘‘(II) Use of private sector clin-
ical decision support mechanisms that 
are independent from certified EHR 
technology, which may include use of 
clinical decision support mechanisms 
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available from medical specialty orga-
nizations. 
‘‘(III) Use of a clinical decision 
support mechanism established by the 
Secretary. 
‘‘(B) QUALIFIED CLINICAL DECISION SUP-
PORT MECHANISMS.— 
‘‘(i) IN
GENERAL.—For purposes of 
this subsection, a qualified clinical decision 
support mechanism is a mechanism that 
the Secretary determines meets the re-
quirements described in clause (ii). 
‘‘(ii) REQUIREMENTS.—The require-
ments described in this clause are the fol-
lowing: 
‘‘(I) The mechanism makes avail-
able to the ordering professional appli-
cable appropriate use criteria specified 
under paragraph (2) and the sup-
porting documentation for the applica-
ble imaging service ordered. 
‘‘(II) In the case where there are 
more than one applicable appropriate 
use criteria specified under such para-
graph for an applicable imaging serv-
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ice, the mechanism indicates the cri-
teria that it uses for the service. 
‘‘(III) The mechanism determines 
the extent to which an applicable im-
aging service ordered is consistent 
with the applicable appropriate use 
criteria so specified. 
‘‘(IV) The mechanism generates 
and provides to the ordering profes-
sional a certification or documentation 
that documents that the qualified clin-
ical decision support mechanism was 
consulted by the ordering professional. 
‘‘(V) The mechanism is updated 
on a timely basis to reflect revisions 
to the specification of applicable ap-
propriate use criteria under such 
paragraph. 
‘‘(VI) The mechanism meets pri-
vacy and security standards under ap-
plicable provisions of law. 
‘‘(VII) The mechanism performs 
such other functions as specified by 
the Secretary, which may include a re-
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quirement to provide aggregate feed-
back to the ordering professional. 
‘‘(C) LIST
OF
MECHANISMS
FOR
CON-
SULTATION
WITH
APPLICABLE
APPROPRIATE 
USE CRITERIA.— 
‘‘(i) INITIAL
LIST.—Not later than 
April 1, 2016, the Secretary shall publish 
a list of mechanisms specified under this 
paragraph. 
‘‘(ii) PERIODIC UPDATING OF LIST.— 
The Secretary shall identify on an annual 
basis the list of qualified clinical decision 
support mechanisms specified under this 
paragraph. 
‘‘(4) CONSULTATION WITH APPLICABLE APPRO-
PRIATE USE CRITERIA.— 
‘‘(A) CONSULTATION BY ORDERING PRO-
FESSIONAL.—Beginning with January 1, 2017, 
subject to subparagraph (C), with respect to an 
applicable imaging service ordered by an order-
ing professional that would be furnished in an 
applicable setting and paid for under an appli-
cable payment system (as defined in subpara-
graph (D)), an ordering professional shall— 
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‘‘(i) consult with a qualified decision 
support mechanism listed under paragraph 
(3)(C); and 
‘‘(ii) provide to the furnishing profes-
sional the information described in clauses 
(i) through (iii) of subparagraph (B). 
‘‘(B) REPORTING BY FURNISHING PROFES-
SIONAL.—Beginning with January 1, 2017, 
subject to subparagraph (C), with respect to an 
applicable imaging service furnished in an ap-
plicable setting and paid for under an applica-
ble payment system (as defined in subpara-
graph (D)), payment for such service may only 
be made if the claim for the service includes the 
following: 
‘‘(i) Information about which qualified 
clinical decision support mechanism was 
consulted by the ordering professional for 
the service. 
‘‘(ii) Information regarding— 
‘‘(I) whether the service ordered 
would adhere to the applicable appro-
priate use criteria specified under 
paragraph (2); 
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‘‘(II) whether the service ordered 
would not adhere to such criteria; or 
‘‘(III) whether such criteria was 
not applicable to the service ordered. 
‘‘(iii) The national provider identifier 
of the ordering professional (if different 
from the furnishing professional). 
‘‘(C) EXCEPTIONS.—The provisions of sub-
paragraphs (A) and (B) and paragraph (6)(A) 
shall not apply to the following: 
‘‘(i) EMERGENCY SERVICES.—An ap-
plicable imaging service ordered for an in-
dividual with an emergency medical condi-
tion (as defined in section 1867(e)(1)). 
‘‘(ii) INPATIENT SERVICES.—An appli-
cable imaging service ordered for an inpa-
tient and for which payment is made under 
part A. 
‘‘(iii) ALTERNATIVE
PAYMENT
MOD-
ELS.—An applicable imaging service or-
dered by an ordering professional with re-
spect to an individual attributed to an al-
ternative payment model (as defined in 
section 1833(z)(3)(C)). 
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‘‘(iv) SIGNIFICANT
HARDSHIP.—An 
applicable imaging service ordered by an 
ordering professional who the Secretary 
may, on a case-by-case basis, exempt from 
the application of such provisions if the 
Secretary determines, subject to annual re-
newal, that consultation with applicable ap-
propriate use criteria would result in a sig-
nificant hardship, such as in the case of a 
professional who practices in a rural area 
without sufficient Internet access. 
‘‘(D) APPLICABLE PAYMENT SYSTEM DE-
FINED.—In this subsection, the term ‘applicable 
payment system’ means the following: 
‘‘(i) The physician fee schedule estab-
lished under section 1848(b). 
‘‘(ii) The prospective payment system 
for hospital outpatient department services 
under section 1833(t). 
‘‘(iii) The ambulatory surgical center 
payment systems under section 1833(i). 
‘‘(5) IDENTIFICATION OF OUTLIER ORDERING 
PROFESSIONALS.— 
‘‘(A) IN GENERAL.—With respect to appli-
cable imaging services furnished beginning with 
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2017, the Secretary shall determine, on an an-
nual basis, no more than five percent of the 
total number of ordering professionals who are 
outlier ordering professionals. 
‘‘(B) 
OUTLIER
ORDERING
PROFES-
SIONALS.—The determination of an outlier or-
dering professional shall— 
‘‘(i) be based on low adherence to ap-
plicable appropriate use criteria specified 
under paragraph (2), which may be based 
on comparison to other ordering profes-
sionals; and 
‘‘(ii) include data for ordering profes-
sionals for whom prior authorization under 
paragraph (6)(A) applies. 
‘‘(C) USE OF TWO YEARS OF DATA.—The 
Secretary shall use two years of data to identify 
outlier ordering professionals under this para-
graph. 
‘‘(D) PROCESS.—The Secretary shall es-
tablish a process for determining when an 
outlier ordering professional is no longer an 
outlier ordering professional. 
‘‘(E) 
CONSULTATION
WITH
STAKE-
HOLDERS.—The Secretary shall consult with 
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physicians, practitioners and other stakeholders 
in developing methods to identify outlier order-
ing professionals under this paragraph. 
‘‘(6) PRIOR
AUTHORIZATION
FOR
ORDERING 
PROFESSIONALS WHO ARE OUTLIERS.— 
‘‘(A) IN GENERAL.—Beginning January 1, 
2020, subject to paragraph (4)(C), with respect 
to services furnished during a year, the Sec-
retary shall, for a period determined appro-
priate by the Secretary, apply prior authoriza-
tion for applicable imaging services that are or-
dered by an outlier ordering professional identi-
fied under paragraph (5). 
‘‘(B) APPROPRIATE
USE
CRITERIA
IN 
PRIOR AUTHORIZATION.—In applying prior au-
thorization under subparagraph (A), the Sec-
retary shall utilize only the applicable appro-
priate use criteria specified under this sub-
section. 
‘‘(C) FUNDING.—For purposes of carrying 
out this paragraph, the Secretary shall provide 
for the transfer, from the Federal Supple-
mentary Medical Insurance Trust Fund under 
section 1841, of $5,000,000 to the Centers for 
Medicare & Medicaid Services Program Man-
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agement Account for each of fiscal years 2019 
through 2021. Amounts transferred under the 
preceding sentence shall remain available until 
expended. 
‘‘(7) CONSTRUCTION.—Nothing in this sub-
section shall be construed as granting the Secretary 
the authority to develop or initiate the development 
of clinical practice guidelines or appropriate use cri-
teria.’’. 
(b) 
CONFORMING
AMENDMENT.—Section 
1833(t)(16) of the Social Security Act (42 U.S.C. 
1395l(t)(16)) is amended by adding at the end the fol-
lowing new subparagraph: 
‘‘(E) APPLICATION OF APPROPRIATE USE 
CRITERIA FOR CERTAIN IMAGING SERVICES.— 
For provisions relating to the application of ap-
propriate use criteria for certain imaging serv-
ices, see section 1834(p).’’. 
(c) REPORT ON EXPERIENCE OF IMAGING APPRO-
PRIATE USE CRITERIA PROGRAM.—Not later than 18 
months after the date of the enactment of this Act, the 
Comptroller General of the United States shall submit to 
Congress a report that includes a description of the extent 
to which appropriate use criteria could be used for other 
services under part B of title XVIII of the Social Security 
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Act (42 U.S.C. 1395j et seq.), such as radiation therapy 
and clinical diagnostic laboratory services. 
SEC. 7. EMPOWERING BENEFICIARY CHOICES THROUGH 
ACCESS TO INFORMATION ON PHYSICIANS’ 
SERVICES. 
(a) IN GENERAL.—The Secretary shall make publicly 
available on Physician Compare the information described 
in subsection (b) with respect to eligible professionals. 
(b) INFORMATION DESCRIBED.—The following infor-
mation, with respect to an eligible professional, is de-
scribed in this subsection: 
(1) Information on the number of services fur-
nished by the eligible professional under part B of 
title XVIII of the Social Security Act (42 U.S.C. 
1395j et seq.), which may include information on the 
most frequent services furnished or groupings of 
services. 
(2) Information on submitted charges and pay-
ments for services under such part. 
(3) A unique identifier for the eligible profes-
sional that is available to the public, such as a na-
tional provider identifier. 
(c) SEARCHABILITY.—The information made avail-
able under this section shall be searchable by at least the 
following: 
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(1) The specialty or type of the eligible profes-
sional. 
(2) Characteristics of the services furnished, 
such as volume or groupings of services. 
(3) The location of the eligible professional. 
(d) DISCLOSURE.—The information made available 
under this section shall indicate, where appropriate, that 
publicized information may not be representative of the 
eligible professional’s entire patient population, the variety 
of services furnished by the eligible professional, or the 
health conditions of individuals treated. 
(e) IMPLEMENTATION.— 
(1) 
INITIAL
IMPLEMENTATION.—Physician 
Compare shall include the information described in 
subsection (b)— 
(A) with respect to physicians, by not later 
than July 1, 2015; and 
(B) with respect to other eligible profes-
sionals, by not later than July 1, 2016. 
(2) 
ANNUAL
UPDATING.—The 
information 
made available under this section shall be updated 
on Physician Compare not less frequently than on 
an annual basis. 
(f) OPPORTUNITY TO REVIEW AND SUBMIT CORREC-
TIONS.—The Secretary shall provide for an opportunity 
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for an eligible professional to review, and submit correc-
tions for, the information to be made public with respect 
to the eligible professional under this section prior to such 
information being made public. 
(g) DEFINITIONS.—In this section: 
(1) ELIGIBLE PROFESSIONAL; PHYSICIAN; SEC-
RETARY.—The terms ‘‘eligible professional’’, ‘‘physi-
cian’’, and ‘‘Secretary’’ have the meaning given such 
terms in section 10331(i) of Public Law 111–148. 
(2) PHYSICIAN COMPARE.—The term ‘‘Physi-
cian Compare’’ means the Physician Compare Inter-
net website of the Centers for Medicare & Medicaid 
Services (or a successor website). 
SEC. 8. EXPANDING AVAILABILITY OF MEDICARE DATA. 
(a) EXPANDING USES
OF MEDICARE DATA
BY 
QUALIFIED ENTITIES.— 
(1) ADDITIONAL ANALYSES.— 
(A) IN
GENERAL.—Subject to subpara-
graph (B), to the extent consistent with appli-
cable information, privacy, security, and disclo-
sure laws (including paragraph (3)), notwith-
standing paragraph (4)(B) of section 1874(e) of 
the Social Security Act (42 U.S.C. 1395kk(e)) 
and the second sentence of paragraph (4)(D) of 
such section, beginning July 1, 2015, a quali-
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fied entity may use the combined data described 
in paragraph (4)(B)(iii) of such section received 
by such entity under such section, and informa-
tion derived from the evaluation described in 
such paragraph (4)(D), to conduct additional 
non-public analyses (as determined appropriate 
by the Secretary) and provide or sell such anal-
yses to authorized users for non-public use (in-
cluding for the purposes of assisting providers 
of services and suppliers to develop and partici-
pate in quality and patient care improvement 
activities, including developing new models of 
care). 
(B) LIMITATIONS WITH RESPECT TO ANAL-
YSES.— 
(i) EMPLOYERS.—Any analyses pro-
vided or sold under subparagraph (A) to 
an 
employer 
described 
in 
paragraph 
(9)(A)(iii) may only be used by such em-
ployer for purposes of providing health in-
surance to employees and retirees of the 
employer. 
(ii) HEALTH INSURANCE ISSUERS.—A 
qualified entity may not provide or sell an 
analysis to a health insurance issuer de-
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scribed in paragraph (9)(A)(iv) unless the 
issuer is providing the qualified entity with 
data under section 1874(e)(4)(B)(iii) of 
the 
Social 
Security 
Act 
(42 
U.S.C. 
1395kk(e)(4)(B)(iii)). 
(2) ACCESS TO CERTAIN DATA.— 
(A) ACCESS.—To the extent consistent 
with applicable information, privacy, security, 
and disclosure laws (including paragraph (3)), 
notwithstanding paragraph (4)(B) of section 
1874(e) of the Social Security Act (42 U.S.C. 
1395kk(e)) and the second sentence of para-
graph (4)(D) of such section, beginning July 1, 
2015, a qualified entity may— 
(i) provide or sell the combined data 
described in paragraph (4)(B)(iii) of such 
section to authorized users described in 
clauses (i), (ii), and (v) of paragraph 
(9)(A) for non-public use, including for the 
purposes described in subparagraph (B); 
or 
(ii) subject to subparagraph (C), pro-
vide Medicare claims data to authorized 
users described in clauses (i), (ii), and (v), 
of paragraph (9)(A) for non-public use, in-
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cluding for the purposes described in sub-
paragraph (B). 
(B) PURPOSES DESCRIBED.—The purposes 
described in this subparagraph are assisting 
providers of services and suppliers in developing 
and participating in quality and patient care 
improvement activities, including developing 
new models of care. 
(C) MEDICARE
CLAIMS
DATA
MUST
BE 
PROVIDED AT NO COST.—A qualified entity may 
not charge a fee for providing the data under 
subparagraph (A)(ii). 
(3) PROTECTION OF INFORMATION.— 
(A) IN GENERAL.—Except as provided in 
subparagraph (B), an analysis or data that is 
provided or sold under paragraph (1) or (2) 
shall not contain information that individually 
identifies a patient. 
(B) INFORMATION ON PATIENTS OF THE 
PROVIDER OF SERVICES OR SUPPLIER.—To the 
extent consistent with applicable information, 
privacy, security, and disclosure laws, an anal-
ysis or data that is provided or sold to a pro-
vider of services or supplier under paragraph 
(1) or (2) may contain information that individ-
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ually identifies a patient of such provider or 
supplier, including with respect to items and 
services furnished to the patient by other pro-
viders of services or suppliers. 
(C) PROHIBITION ON USING ANALYSES OR 
DATA FOR MARKETING PURPOSES.—An author-
ized user shall not use an analysis or data pro-
vided or sold under paragraph (1) or (2) for 
marketing purposes. 
(4) DATA USE AGREEMENT.—A qualified entity 
and an authorized user described in clauses (i), (ii), 
and (v) of paragraph (9)(A) shall enter into an 
agreement regarding the use of any data that the 
qualified entity is providing or selling to the author-
ized user under paragraph (2). Such agreement shall 
describe the requirements for privacy and security of 
the data and, as determined appropriate by the Sec-
retary, any prohibitions on using such data to link 
to other individually identifiable sources of informa-
tion. If the authorized user is not a covered entity 
under the rules promulgated pursuant to the Health 
Insurance Portability and Accountability Act of 
1996, the agreement shall identify the relevant regu-
lations, as determined by the Secretary, that the 
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user shall comply with as if it were acting in the ca-
pacity of such a covered entity. 
(5) NO
REDISCLOSURE
OF
ANALYSES
OR 
DATA.— 
(A) IN GENERAL.—Except as provided in 
subparagraph (B), an authorized user that is 
provided or sold an analysis or data under 
paragraph (1) or (2) shall not redisclose or 
make public such analysis or data or any anal-
ysis using such data. 
(B) PERMITTED REDISCLOSURE.—A pro-
vider of services or supplier that is provided or 
sold an analysis or data under paragraph (1) or 
(2) may, as determined by the Secretary, redis-
close such analysis or data for the purposes of 
performance improvement and care coordination 
activities but shall not make public such anal-
ysis or data or any analysis using such data. 
(6) OPPORTUNITY FOR PROVIDERS OF SERV-
ICES AND SUPPLIERS TO REVIEW.—Prior to a quali-
fied entity providing or selling an analysis to an au-
thorized user under paragraph (1), to the extent 
that such analysis would individually identify a pro-
vider of services or supplier who is not being pro-
vided or sold such analysis, such qualified entity 
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shall provide such provider or supplier with the op-
portunity to appeal and correct errors in the manner 
described in section 1874(e)(4)(C)(ii) of the Social 
Security Act (42 U.S.C. 1395kk(e)(4)(C)(ii)). 
(7) ASSESSMENT FOR A BREACH.— 
(A) IN GENERAL.—In the case of a breach 
of a data use agreement under this section or 
section 1874(e) of the Social Security Act (42 
U.S.C. 1395kk(e)), the Secretary shall impose 
an assessment on the qualified entity both in 
the case of— 
(i) an agreement between the Sec-
retary and a qualified entity; and 
(ii) an agreement between a qualified 
entity and an authorized user. 
(B) ASSESSMENT.—The assessment under 
subparagraph (A) shall be an amount up to 
$100 for each individual entitled to, or enrolled 
for, benefits under part A of title XVIII of the 
Social Security Act or enrolled for benefits 
under part B of such title— 
(i) in the case of an agreement de-
scribed in subparagraph (A)(i), for whom 
the Secretary provided data on to the 
qualified entity under paragraph (2); and 
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(ii) in the case of an agreement de-
scribed in subparagraph (A)(ii), for whom 
the qualified entity provided data on to the 
authorized user under paragraph (2). 
(C) DEPOSIT OF AMOUNTS COLLECTED.— 
Any amounts collected pursuant to this para-
graph shall be deposited in Federal Supple-
mentary Medical Insurance Trust Fund under 
section 1841 of the Social Security Act (42 
U.S.C. 1395t). 
(8) ANNUAL
REPORTS.—Any qualified entity 
that provides or sells an analysis or data under 
paragraph (1) or (2) shall annually submit to the 
Secretary a report that includes— 
(A) a summary of the analyses provided or 
sold, including the number of such analyses, the 
number of purchasers of such analyses, and the 
total amount of fees received for such analyses; 
(B) a description of the topics and pur-
poses of such analyses; 
(C) information on the entities who re-
ceived the data under paragraph (2), the uses 
of the data, and the total amount of fees re-
ceived for providing, selling, or sharing the 
data; and 
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(D) other information determined appro-
priate by the Secretary. 
(9) DEFINITIONS.—In this subsection and sub-
section (b): 
(A) AUTHORIZED USER.—The term ‘‘au-
thorized user’’ means the following: 
(i) A provider of services. 
(ii) A supplier. 
(iii) An employer (as defined in sec-
tion 3(5) of the Employee Retirement In-
surance Security Act of 1974). 
(iv) A health insurance issuer (as de-
fined in section 2791 of the Public Health 
Service Act). 
(v) A medical society or hospital asso-
ciation. 
(vi) Any entity not described in 
clauses (i) through (v) that is approved by 
the Secretary (other than an employer or 
health insurance issuer not described in 
clauses (iii) and (iv), respectively, as deter-
mined by the Secretary). 
(B) PROVIDER
OF
SERVICES.—The term 
‘‘provider of services’’ has the meaning given 
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such term in section 1861(u) of the Social Se-
curity Act (42 U.S.C. 1395x(u)). 
(C) QUALIFIED ENTITY.—The term ‘‘quali-
fied entity’’ has the meaning given such term in 
section 1874(e)(2) of the Social Security Act 
(42 U.S.C. 1395kk(e)). 
(D) SECRETARY.—The term ‘‘Secretary’’ 
means the Secretary of Health and Human 
Services. 
(E) SUPPLIER.—The term ‘‘supplier’’ has 
the meaning given such term in section 1861(d) 
of 
the 
Social 
Security 
Act 
(42 
U.S.C. 
1395x(d)). 
(b) ACCESS
TO MEDICARE DATA
BY QUALIFIED 
CLINICAL DATA REGISTRIES TO FACILITATE QUALITY 
IMPROVEMENT.— 
(1) ACCESS.— 
(A) IN
GENERAL.—To the extent con-
sistent with applicable information, privacy, se-
curity, and disclosure laws, beginning July 1, 
2015, the Secretary shall, at the request of a 
qualified clinical data registry under section 
1848(m)(3)(E) of the Social Security Act (42 
U.S.C. 1395w–4(m)(3)(E)), provide the data 
described in subparagraph (B) (in a form and 
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manner determined to be appropriate) to such 
qualified clinical data registry for purposes of 
linking such data with clinical outcomes data 
and performing risk-adjusted, scientifically valid 
analyses and research to support quality im-
provement or patient safety, provided that any 
public reporting of such analyses or research 
that identifies a provider of services or supplier 
shall only be conducted with the opportunity of 
such provider or supplier to appeal and correct 
errors in the manner described in subsection 
(a)(6). 
(B) DATA
DESCRIBED.—The data de-
scribed in this subparagraph is— 
(i) claims data under the Medicare 
program under title XVIII of the Social 
Security Act; and 
(ii) if the Secretary determines appro-
priate, claims data under the Medicaid 
program under title XIX of such Act and 
the State Children’s Health Insurance Pro-
gram under title XXI of such Act. 
(2) FEE.—Data described in paragraph (1)(B) 
shall be provided to a qualified clinical data registry 
under paragraph (1) at a fee equal to the cost of 
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providing such data. Any fee collected pursuant to 
the preceding sentence shall be deposited in the Cen-
ters for Medicare & Medicaid Services Program 
Management Account. 
(c) EXPANSION OF DATA AVAILABLE TO QUALIFIED 
ENTITIES.—Section 1874(e) of the Social Security Act 
(42 U.S.C. 1395kk(e)) is amended— 
(1) in the subsection heading, by striking 
‘‘MEDICARE’’; and 
(2) in paragraph (3)— 
(A) by inserting after the first sentence the 
following new sentence: ‘‘Beginning July 1, 
2015, if the Secretary determines appropriate, 
the data described in this paragraph may also 
include standardized extracts (as determined by 
the Secretary) of claims data under titles XIX 
and XXI for assistance provided under such ti-
tles for one or more specified geographic areas 
and time periods requested by a qualified enti-
ty.’’; and 
(B) in the last sentence, by inserting ‘‘or 
under titles XIX or XXI’’ before the period at 
the end. 
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(d) REVISION OF PLACEMENT OF FEES.—Section 
1874(e)(4)(A) of the Social Security Act (42 U.S.C. 
1395kk(e)(4)(A)) is amended, in the second sentence— 
(1) by inserting ‘‘, for periods prior to July 1, 
2015,’’ after ‘‘deposited’’; and 
(2) by inserting the following before the period 
at the end: ‘‘, and, beginning July 1, 2015, into the 
Centers for Medicare & Medicaid Services Program 
Management Account’’. 
SEC. 9. REDUCING ADMINISTRATIVE BURDEN AND OTHER 
PROVISIONS. 
(a) MEDICARE PHYSICIAN AND PRACTITIONER OPT- 
OUT TO PRIVATE CONTRACT.— 
(1) INDEFINITE, CONTINUING AUTOMATIC EX-
TENSION OF OPT OUT ELECTION.— 
(A) IN GENERAL.—Section 1802(b)(3) of 
the Social Security Act (42 U.S.C. 1395a(b)(3)) 
is amended— 
(i) in subparagraph (B)(ii), by strik-
ing ‘‘during the 2-year period beginning on 
the date the affidavit is signed’’ and insert-
ing ‘‘during the applicable 2-year period 
(as defined in subparagraph (D))’’; 
(ii) in subparagraph (C), by striking 
‘‘during the 2-year period described in sub-
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paragraph (B)(ii)’’ and inserting ‘‘during 
the applicable 2-year period’’; and 
(iii) by adding at the end the fol-
lowing new subparagraph: 
‘‘(D) APPLICABLE
2-YEAR
PERIODS
FOR 
EFFECTIVENESS OF AFFIDAVITS.—In this sub-
section, the term ‘applicable 2-year period’ 
means, with respect to an affidavit of a physi-
cian or practitioner under subparagraph (B), 
the 2-year period beginning on the date the af-
fidavit is signed and includes each subsequent 
2-year period unless the physician or practi-
tioner involved provides notice to the Secretary 
(in a form and manner specified by the Sec-
retary), not later than 30 days before the end 
of the previous 2-year period, that the physician 
or practitioner does not want to extend the ap-
plication of the affidavit for such subsequent 2- 
year period.’’. 
(B) EFFECTIVE DATE.—The amendments 
made by subparagraph (A) shall apply to affi-
davits entered into on or after the date that is 
60 days after the date of the enactment of this 
Act. 
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(2) PUBLIC AVAILABILITY OF INFORMATION ON 
OPT-OUT PHYSICIANS AND PRACTITIONERS.—Section 
1802(b) of the Social Security Act (42 U.S.C. 
1395a(b)) is amended— 
(A) in paragraph (5), by adding at the end 
the following new subparagraph: 
‘‘(D) OPT-OUT PHYSICIAN OR PRACTITIONER.— 
The term ‘opt-out physician or practitioner’ means 
a physician or practitioner who has in effect an affi-
davit under paragraph (3)(B).’’; 
(B) by redesignating paragraph (5) as 
paragraph (6); and 
(C) by inserting after paragraph (4) the 
following new paragraph: 
‘‘(5) POSTING OF INFORMATION ON OPT-OUT 
PHYSICIANS AND PRACTITIONERS.— 
‘‘(A) IN
GENERAL.—Beginning not later 
than February 1, 2015, the Secretary shall 
make publicly available through an appropriate 
publicly accessible website of the Department of 
Health and Human Services information on the 
number and characteristics of opt-out physi-
cians and practitioners and shall update such 
information on such website not less often than 
annually. 
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‘‘(B) INFORMATION
TO
BE
INCLUDED.— 
The information to be made available under 
subparagraph (A) shall include at least the fol-
lowing with respect to opt-out physicians and 
practitioners: 
‘‘(i) Their number. 
‘‘(ii) Their physician or professional 
specialty or other designation. 
‘‘(iii) Their geographic distribution. 
‘‘(iv) The timing of their becoming 
opt-out physicians and practitioners, rel-
ative to when they first entered practice 
and with respect to applicable 2-year peri-
ods. 
‘‘(v) The proportion of such physi-
cians and practitioners who billed for 
emergency or urgent care services.’’. 
(b) GAINSHARING STUDY AND REPORT.—Not later 
than 6 months after the date of the enactment of this Act, 
the Secretary of Health and Human Services, in consulta-
tion with the Inspector General of the Department of 
Health and Human Services, shall submit to Congress a 
report with legislative recommendations to amend existing 
fraud and abuse laws, through exceptions, safe harbors, 
or other narrowly targeted provisions, to permit 
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gainsharing or similar arrangements between physicians 
and hospitals that improve care while reducing waste and 
increasing efficiency. The report shall— 
(1) consider whether such provisions should 
apply to ownership interests, compensation arrange-
ments, or other relationships; 
(2) describe how the recommendations address 
accountability, transparency, and quality, including 
how best to limit inducements to stint on care, dis-
charge patients prematurely, or otherwise reduce or 
limit medically necessary care; and 
(3) consider whether a portion of any savings 
generated by such arrangements should accrue to 
the Medicare program under title XVIII of the So-
cial Security Act. 
(c) PROMOTING INTEROPERABILITY OF ELECTRONIC 
HEALTH RECORD SYSTEMS.— 
(1) RECOMMENDATIONS FOR ACHIEVING WIDE-
SPREAD EHR INTEROPERABILITY.— 
(A) OBJECTIVE.—As a consequence of a 
significant Federal investment in the implemen-
tation of health information technology through 
the Medicare and Medicaid EHR incentive pro-
grams, Congress declares it a national objective 
to achieve widespread exchange of health infor-
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mation through interoperable certified EHR 
technology nationwide by December 31, 2017. 
(B) DEFINITIONS.—In this paragraph: 
(i) 
WIDESPREAD
INTEROPER-
ABILITY.—The term ‘‘widespread inter-
operability’’ means interoperability between 
certified EHR technology systems em-
ployed by meaningful EHR users under 
the Medicare and Medicaid EHR incentive 
programs and other clinicians and health 
care providers on a nationwide basis. 
(ii) INTEROPERABILITY.—The term 
‘‘interoperability’’ means the ability of two 
or more health information systems or 
components to exchange clinical and other 
information and to use the information 
that has been exchanged using common 
standards as to provide access to longitu-
dinal information for health care providers 
in order to facilitate coordinated care and 
improved patient outcomes. 
(C) ESTABLISHMENT
OF
METRICS.—Not 
later than July 1, 2015, and in consultation 
with stakeholders, the Secretary shall establish 
metrics to be used to determine if and to the 
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