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‘‘(E) health care practitioners or groups 
representing practitioners. 
‘‘(3) OTHER
MEMBERSHIP
REQUIREMENTS.— 
The membership of the organization is representa-
tive of individuals with experience with— 
‘‘(A) urban health care issues; 
‘‘(B) safety net health care issues; 
‘‘(C) rural and frontier health care issues; 
and 
‘‘(D) health care quality and safety issues. 
‘‘(4) OPEN AND TRANSPARENT.—With respect 
to matters related to the arrangement described in 
subsection (a), the organization conducts its busi-
ness in an open and transparent manner and pro-
vides the opportunity for public comment. 
‘‘(5) VOLUNTARY CONSENSUS STANDARDS SET-
TING ORGANIZATION.—The organization operates as 
a voluntary consensus standards setting organization 
as defined for purposes of section 12(d) of the Na-
tional Technology Transfer and Advancement Act of 
1995 (Public Law 104–113) and Office of Manage-
ment and Budget Revised Circular A–119 (published 
in the Federal Register on February 10, 1998). 
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‘‘(6) EXPERIENCE.—The organization has at 
least 7 years experience in establishing national con-
sensus standards. 
‘‘(d) REQUIREMENTS
FOR HEALTH CARE MEAS-
URES.—In carrying out its duties under subsection (b), 
the designated organization shall ensure the following: 
‘‘(1) MEASURES.—The designated organization 
shall ensure that the measures established or en-
dorsed under subsection (b) are evidence-based, reli-
able, and valid; and include— 
‘‘(A) measures of clinical processes and 
outcomes, patient experience, efficiency, and eq-
uity; 
‘‘(B) measures to assess effectiveness, 
timeliness, patient self-management, patient 
centeredness, and safety; and 
‘‘(C) measures of under use and over use. 
‘‘(2) PRIORITIES.— 
‘‘(A) IN GENERAL.—The designated orga-
nization shall ensure that priority is given to es-
tablishing and endorsing— 
‘‘(i) measures with the greatest poten-
tial impact for improving the effectiveness 
and efficiency of health care; 
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‘‘(ii) measures that may be rapidly 
implemented by group health plans, health 
insurance issuers, physicians, hospitals, 
nursing homes, long-term care providers, 
and other providers; 
‘‘(iii) measures which may inform 
health care decisions made by consumers 
and patients; and 
‘‘(iv) measures that apply to multiple 
services furnished by different providers 
during an episode of care. 
‘‘(B) ANNUAL
REPORT
ON
PRIORITIES; 
SECRETARIAL PUBLICATION AND COMMENT.— 
‘‘(i) 
ANNUAL
REPORT.—The 
des-
ignated organization shall issue and submit 
to the Secretary a report by March 31 of 
each year (beginning with 2009) on the or-
ganization’s recommendations for priorities 
and goals in establishing and endorsing 
health care measures under this section 
over the next five years. 
‘‘(ii) SECRETARIAL REVIEW AND COM-
MENT.—After receipt of the report under 
clause (i) for a year, the Secretary shall 
publish the report in the Federal Register, 
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including any comments of the Secretary 
on the priorities and goals set forth in the 
report. 
‘‘(3) RISK ADJUSTMENT.—The designated orga-
nization, in consultation with health care measure 
developers and other stakeholders, shall establish 
procedures to assure that health care measures es-
tablished and endorsed under this section account 
for differences in patient health status, patient char-
acteristics, and geographic location, as appropriate. 
‘‘(4) MAINTENANCE.—The designated organiza-
tion, in consultation with owners and developers of 
health care measures, shall require the owners or de-
velopers of such measures to update and enhance 
such measures, including the development of more 
accurate and precise specifications, and retire exist-
ing outdated measures. Such updating shall occur 
not more often than once during each 12-month pe-
riod, except in the case of emergent circumstances 
requiring a more immediate update to a measure. 
‘‘(e) USE OF HEALTH CARE MEASURES; REPORT-
ING.— 
‘‘(1) USE OF MEASURES.—For purposes of ac-
tivities authorized or required under this title, the 
Secretary shall select from health care measures— 
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‘‘(A) recommended by multi-stakeholder 
groups; and 
‘‘(B) endorsed by the designated organiza-
tion under subsection (b)(4). 
‘‘(2) REPORTING.—The Secretary shall imple-
ment procedures, consistent with generally accepted 
standards, to enable the Department of Health and 
Human Services to accept the electronic submission 
of data for purposes of— 
‘‘(A) effectiveness measurement using the 
health care measures developed pursuant to this 
section; and 
‘‘(B) reporting to the Secretary measures 
used to make value-based payments under this 
title. 
‘‘(f) CONTRACTS.—The Secretary, acting through the 
Agency for Healthcare Research and Quality, may con-
tract with organizations to support the development and 
testing of health care measures meeting the standards es-
tablished by the designated organization. 
‘‘(g) DISSEMINATION OF INFORMATION.—In order to 
make information on health care measures available to 
health care consumers, health professionals, public health 
officials, oversight organizations, researchers, and other 
appropriate individuals and entities, the Secretary shall 
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work with multi-stakeholder groups to provide for the dis-
semination of information developed pursuant to this title. 
‘‘(h) FUNDING.—For purposes of carrying out sub-
sections (a), (b), (c), and (d), including for expenses in-
curred for the arrangement under subsection (a) with the 
designated organization, there is payable from the Federal 
Hospital Insurance Trust Fund (established under section 
1817) and the Federal Supplementary Medical Insurance 
Trust Fund (established under section 1841)— 
‘‘(1) for fiscal year 2008, $15,000,000, multi-
plied by the ratio of the total number of months in 
the year to the number of months (and portions of 
months) of such year during which the arrangement 
under subsection (a) is effective; and 
‘‘(2) for each of the fiscal years, 2009 through 
2012, $15,000,000.’’. 
SEC. 907. IMPROVEMENTS TO THE MEDIGAP PROGRAM. 
(a) IMPLEMENTATION
OF
NAIC RECOMMENDA-
TIONS.—The Secretary of Health and Human Services 
shall provide, under subsections (p)(1)(E) of section 1882 
of the Social Security Act (42 U.S.C. 1395s), for imple-
mentation of the changes in the NAIC model law and reg-
ulations recommended by the National Association of In-
surance Commissioners in its Model #651 (‘‘Model Regu-
lation to Implement the NAIC Medicare Supplement In-
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