SEC. 217. REVISIONS UNDER THE MEDICARE ESRD PRO-
SPECTIVE PAYMENT SYSTEM. 
(a) DELAY
OF IMPLEMENTATION
OF ORAL-ONLY 
POLICY.—Section 632(b)(1) of the American Taxpayer 
Relief Act of 2012 (42 U.S.C. 1395rr note) is amended— 
(1) by striking ‘‘2016’’ and inserting ‘‘2024’’; 
and 
(2) by adding at the end the following new sen-
tence: ‘‘Notwithstanding section 1881(b)(14)(A)(ii) 
of 
the 
Social 
Security 
Act 
(42 
U.S.C. 
1395rr(b)(14)(A)(ii)), implementation of the policy 
described in the previous sentence shall be based on 
data from the most recent year available.’’. 
(b) MITIGATION OF THE APPLICATION OF ADJUST-
MENT TO ESRD BUNDLED PAYMENT RATE TO ACCOUNT 
FOR CHANGES IN THE UTILIZATION OF CERTAIN DRUGS 
AND BIOLOGICALS.— 
(1) IN
GENERAL.—Section 1881(b)(14)(I) of 
the Social Security Act (42 U.S.C. 1395rr(b)(14)(I)) 
is amended by inserting ‘‘and before January 1, 
2015,’’ after ‘‘January 1, 2014,’’. 
(2) 
MARKET
BASKET.—Section 
1881(b)(14)(F)(i) of the Social Security Act (42 
U.S.C. 1395rr(b)(14)(F)(i)) is amended— 
(A) in subclause (I)— 
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(i) by striking ‘‘subclause (II)’’ and 
inserting ‘‘subclauses (II) and (III)’’; and 
(ii) by adding at the end the following 
new sentence: ‘‘In order to accomplish the 
purposes of subparagraph (I) with respect 
to 2016, 2017, and 2018, after deter-
mining the increase factor described in the 
preceding sentence for each of 2016, 2017, 
and 2018, the Secretary shall reduce such 
increase factor by 1.25 percentage points 
for each of 2016 and 2017 and by 1 per-
centage point for 2018.’’; 
(B) in subclause (II), by striking ‘‘For 
2012’’ and inserting ‘‘Subject to subclause 
(III), for 2012’’; and 
(C) by adding at the end the following new 
subclause: 
‘‘(III) Notwithstanding subclauses (I) and (II), 
in order to accomplish the purposes of subparagraph 
(I) with respect to 2015, the increase factor de-
scribed in subclause (I) for 2015 shall be 0.0 percent 
pursuant to the regulation issued by the Secretary 
on December 2, 2013, entitled ‘Medicare Program; 
End-Stage Renal Disease Prospective Payment Sys-
tem, Quality Incentive Program, and Durable Med-
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ical Equipment, Prosthetics, Orthotics, and Supplies; 
Final Rule’ (78 Fed. Reg. 72156).’’. 
(c) DRUG DESIGNATIONS.—As part of the promulga-
tion of annual rule for the Medicare end stage renal dis-
ease 
prospective 
payment 
system 
under 
section 
1881(b)(14) of the Social Security Act (42 U.S.C. 
1395rr(b)(14)) for calendar year 2016, the Secretary of 
Health and Human Services (in this subsection referred 
to as the ‘‘Secretary’’) shall establish a process for— 
(1) determining when a product is no longer an 
oral-only drug; and 
(2) including new injectable and intravenous 
products into the bundled payment under such sys-
tem. 
(d) QUALITY MEASURES RELATED TO CONDITIONS 
TREATED BY ORAL-ONLY DRUGS UNDER THE ESRD 
QUALITY INCENTIVE PROGRAM.—Section 1881(h)(2) of 
the Social Security Act (42 U.S.C. 1395rr(h)(2)) is 
amended— 
(1) in subparagraph (A)— 
(A) in clause (ii), by striking ‘‘and’’ at the 
end; 
(B) by redesignating clause (iii) as clause 
(iv); and 
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(C) by inserting after clause (ii) the fol-
lowing new clause: 
‘‘(iii) for 2016 and subsequent years, 
measures 
described 
in 
subparagraph 
(E)(i); and’’; 
(2) 
in 
subparagraph 
(B)(i), 
by 
striking 
‘‘(A)(iii)’’ and inserting ‘‘(A)(iv)’’; and 
(3) by adding at the end the following new sub-
paragraph: 
‘‘(E) MEASURES SPECIFIC TO THE CONDI-
TIONS TREATED WITH ORAL-ONLY DRUGS.— 
‘‘(i) IN GENERAL.—The measures de-
scribed in this subparagraph are measures 
specified by the Secretary that are specific 
to the conditions treated with oral-only 
drugs. To the extent feasible, such meas-
ures shall be outcomes-based measures. 
‘‘(ii) CONSULTATION.—In specifying 
the measures under clause (i), the Sec-
retary shall consult with interested stake-
holders. 
‘‘(iii) USE
OF
ENDORSED
MEAS-
URES.— 
‘‘(I) IN
GENERAL.—Subject to 
subclause (I), any measures specified 
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under clause (i) must have been en-
dorsed by the entity with a contract 
under section 1890(a). 
‘‘(II) EXCEPTION.—If the entity 
with a contract under section 1890(a) 
has not endorsed a measure for a 
specified area or topic related to 
measures described in clause (i) that 
the Secretary determines appropriate, 
the Secretary may specify a measure 
that is endorsed or adopted by a con-
sensus organization recognized by the 
Secretary that has expertise in clinical 
guidelines for kidney disease.’’. 
(e) AUDITS OF COST REPORTS OF ESRD PROVIDERS 
AS RECOMMENDED BY MEDPAC.— 
(1) IN GENERAL.—The Secretary of Health and 
Human Services shall conduct audits of Medicare 
cost reports beginning during 2012 for a representa-
tive sample of providers of services and renal dialysis 
facilities furnishing renal dialysis services. 
(2) FUNDING.—For purposes of carrying out 
paragraph (1), the Secretary of Health and Human 
Services shall provide for the transfer from the Fed-
eral Supplementary Medical Insurance Trust Fund 
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established under section 1841 of the Social Security 
Act (42 U.S.C. 1395t) to the Centers for Medicare 
& Medicaid Services Program Management Account 
of $18,000,000 for fiscal year 2014. Amounts trans-
ferred under this paragraph for a fiscal year shall be 
available until expended. 
SEC. 218. QUALITY INCENTIVES FOR COMPUTED TOMOG-
RAPHY 
DIAGNOSTIC 
IMAGING 
AND 
PRO-
MOTING EVIDENCE-BASED CARE. 
(a) QUALITY INCENTIVES TO PROMOTE PATIENT 
SAFETY AND PUBLIC HEALTH IN COMPUTED TOMOG-
RAPHY DIAGNOSTIC IMAGING.— 
(1) IN GENERAL.—Section 1834 of the Social 
Security Act (42 U.S.C. 1395m) is amended by add-
ing at the end the following new subsection: 
‘‘(p) QUALITY INCENTIVES TO PROMOTE PATIENT 
SAFETY AND PUBLIC HEALTH IN COMPUTED TOMOG-
RAPHY.— 
‘‘(1) QUALITY INCENTIVES.—In the case of an 
applicable computed tomography service (as defined 
in paragraph (2)) for which payment is made under 
an applicable payment system (as defined in para-
graph (3)) and that is furnished on or after January 
1, 2016, using equipment that is not consistent with 
the CT equipment standard (described in paragraph 
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(4)), the payment amount for such service shall be 
reduced by the applicable percentage (as defined in 
paragraph (5)). 
‘‘(2) APPLICABLE
COMPUTED
TOMOGRAPHY 
SERVICES DEFINED.—In this subsection, the term 
‘applicable computed tomography service’ means a 
service billed using diagnostic radiological imaging 
codes for computed tomography (identified as of 
January 1, 2014, by HCPCS codes 70450–70498, 
71250–71275, 72125–72133, 72191–72194, 73200– 
73206, 73700–73706, 74150–74178, 74261–74263, 
and 75571–75574 (and any succeeding codes). 
‘‘(3) 
APPLICABLE
PAYMENT
SYSTEM
DE-
FINED.—In this subsection, the term ‘applicable 
payment system’ means the following: 
‘‘(A) The technical component and the 
technical component of the global fee under the 
fee schedule established under section 1848(b). 
‘‘(B) The prospective payment system for 
hospital outpatient department services under 
section 1833(t). 
‘‘(4) 
CONSISTENCY
WITH
CT
EQUIPMENT 
STANDARD.—In this subsection, the term ‘not con-
sistent with the CT equipment standard’ means, 
with respect to an applicable computed tomography 
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service, that the service was furnished using equip-
ment that does not meet each of the attributes of 
the National Electrical Manufacturers Association 
(NEMA) Standard XR–29–2013, entitled ‘Standard 
Attributes on CT Equipment Related to Dose Opti-
mization and Management’. Through rulemaking, 
the Secretary may apply successor standards. 
‘‘(5) APPLICABLE PERCENTAGE DEFINED.—In 
this subsection, the term ‘applicable percentage’ 
means— 
‘‘(A) for 2016, 5 percent; and 
‘‘(B) for 2017 and subsequent years, 15 
percent. 
‘‘(6) IMPLEMENTATION.— 
‘‘(A) INFORMATION.—The Secretary shall 
require that information be provided and at-
tested to by a supplier and a hospital outpatient 
department that indicates whether an applicable 
computed tomography service was furnished 
that was not consistent with the CT equipment 
standard (described in paragraph (4)). Such in-
formation may be included on a claim and may 
be a modifier. Such information shall be 
verified, as appropriate, as part of the periodic 
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accreditation of suppliers under section 1834(e) 
and hospitals under section 1865(a). 
‘‘(B) ADMINISTRATION.—Chapter 35 of 
title 44, United States Code, shall not apply to 
information described in subparagraph (A).’’. 
(2) CONFORMING AMENDMENTS.— 
(A) PROSPECTIVE PAYMENT SYSTEM FOR 
HOSPITAL
OUTPATIENT
DEPARTMENT
SERV-
ICES.—Section 1833(t) of the Social Security 
Act (42 1395l(t)) is amended by adding at the 
end the following new paragraph: 
‘‘(20) NOT BUDGET NEUTRAL APPLICATION OF 
REDUCED EXPENDITURES RESULTING FROM QUAL-
ITY
INCENTIVES
FOR
COMPUTED
TOMOGRAPHY.— 
The Secretary shall not take into account the re-
duced expenditures that result from the application 
of section 1834(p) in making any budget neutrality 
adjustments this subsection.’’. 
(B) PHYSICIAN FEE SCHEDULE.—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) 
REDUCED
EXPENDI-
TURES
ATTRIBUTABLE
TO
APPLICA-
TION
OF
QUALITY
INCENTIVES
FOR 
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COMPUTED
TOMOGRAPHY.—Effective 
for fee schedules established beginning 
with 2016, reduced expenditures at-
tributable to the application of the 
quality incentives for computed to-
mography under section 1834(p)’’. 
(b) PROMOTING EVIDENCE-BASED CARE.— 
(1) IN GENERAL.—Section 1834 of the Social 
Security Act (42 U.S.C. 1395m), as amended by 
subsection (a), is amended by adding at the end the 
following new subsection: 
‘‘(q) 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-
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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 for an individual. To the extent fea-
sible, such criteria shall be evidence-based. 
‘‘(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-
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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 
section 1842(b)(18)(C) who orders an applica-
ble imaging service. 
‘‘(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. 
‘‘(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 
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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; 
‘‘(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 criterion applies with re-
spect to an applicable imaging service, the Sec-
retary shall apply one or more applicable appro-
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priate use criteria under this paragraph for the 
service. 
‘‘(3) MECHANISMS
FOR
CONSULTATION
WITH 
APPLICABLE APPROPRIATE USE CRITERIA.— 
‘‘(A) IDENTIFICATION OF MECHANISMS TO 
CONSULT WITH APPLICABLE APPROPRIATE USE 
CRITERIA.— 
‘‘(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-
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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 
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 
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under paragraph (2) and the sup-
porting documentation for the applica-
ble imaging service ordered. 
‘‘(II) In the case where there is 
more than one applicable appropriate 
use criterion specified under such 
paragraph for an applicable imaging 
service, the mechanism indicates the 
criteria 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. 
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‘‘(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-
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 
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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— 
‘‘(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— 
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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 
2017, the Secretary shall determine, on an an-
nual basis, no more than five percent of the 
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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 
physicians, practitioners and other stakeholders 
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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-
agement Account for each of fiscal years 2019 
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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.’’. 
(2) 
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 
following 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(q).’’. 
(3) REPORT ON EXPERIENCE OF IMAGING AP-
PROPRIATE
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 in-
cludes a description of the extent to which appro-
priate 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. 219. USING FUNDING FROM TRANSITIONAL FUND FOR 
SUSTAINABLE GROWTH RATE (SGR) REFORM. 
Section 1898(b)(1) of the Social Security Act (42 
U.S.C. 
1395iii(b)(1)) 
is 
amended 
by 
striking 
‘‘$2,300,000,000’’ and inserting ‘‘$0’’. 
SEC. 220. 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 
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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) 
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. 
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‘‘(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-
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 
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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. 
‘‘(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. 
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‘‘(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 
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 & 
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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— 
(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-
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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 
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 
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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 
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 
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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-
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 
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respect to fee schedules established for each of 
2017 through 2020, 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-
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-
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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. 
‘‘(iii) 
EXEMPTION
FROM
BUDGET 
NEUTRALITY IF TARGET NOT MET.—If the 
estimated net reduction in expenditures de-
termined under clause (i) for the year is 
less than the target for the year, reduced 
expenditures in an amount equal to the 
target recapture amount shall not be taken 
into account in applying subparagraph 
(B)(ii)(II) with respect to fee schedules be-
ginning with 2017. 
‘‘(iv) TARGET RECAPTURE AMOUNT.— 
For purposes of clause (iii), the target re-
capture amount is, with respect to a year, 
an amount equal to the difference be-
tween— 
‘‘(I) the target for the year; and 
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‘‘(II) the estimated net reduction 
in expenditures determined under 
clause (i) for the year. 
‘‘(v) TARGET.—For purposes of this 
subparagraph, with respect to a year, the 
target is calculated as 0.5 percent of the 
estimated amount of expenditures under 
the fee schedule under this section for the 
year.’’. 
(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 2017, 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-
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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 2017, for serv-
ices that are not new or revised codes, 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 compared to 
the total relative value units for the previous year, 
the applicable adjustments in work, practice 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 
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(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. 
(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 
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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.— 
‘‘(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. 
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‘‘(ii) All areas not included in an MSA 
shall be treated as a single rest-of-State 
fee schedule area. 
‘‘(B) TRANSITION FOR MSAS PREVIOUSLY 
IN REST-OF-STATE PAYMENT LOCALITY OR IN 
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 
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. 
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‘‘(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 
‘‘(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 
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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. 
‘‘(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’’. 
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100 
(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). 
SEC. 221. MEDICAID DSH. 
(a) MODIFICATIONS
OF REDUCTIONS
TO ALLOT-
MENTS.—Section 1923(f) of the Social Security Act (42 
U.S.C. 1396r–4(f)) is amended— 
(1) in paragraph (7)(A)— 
(A) in clause (i), by striking ‘‘2016 
through 2020’’ and inserting ‘‘2017 through 
2024’’; and 
(B) in clause (ii), by striking subclauses 
(I) through (IV), and inserting the following: 
‘‘(I) $1,800,000,000 for fiscal 
year 2017; 
‘‘(II) $4,700,000,000 for fiscal 
year 2018; 
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101 
‘‘(III) $4,700,000,000 for fiscal 
year 2019; 
‘‘(IV) $4,700,000,000 for fiscal 
year 2020; 
‘‘(V) $4,800,000,000 for fiscal 
year 2021; 
‘‘(VI) $5,000,000,000 for fiscal 
year 2022; 
‘‘(VII) $5,000,000,000 for fiscal 
year 2023; and 
‘‘(VIII) $4,400,000,000 for fiscal 
year 2024.’’; and 
(2) by striking paragraph (8) and inserting the 
following: 
‘‘(8) CALCULATION
OF
DSH 
ALLOTMENTS 
AFTER REDUCTIONS PERIOD.—The DSH allotment 
for a State for fiscal years after fiscal year 2024 
shall be calculated under paragraph (3) without re-
gard to paragraph (7).’’. 
(b) MACPAC REVIEW
AND
REPORT.—Section 
1900(b)(6) of the Social Security Act (42 U.S.C. 
1396(b)(6)) is amended— 
(1) by striking ‘‘MACPAC shall consult’’ and 
inserting the following: 
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102 
‘‘(A) IN GENERAL.—MACPAC shall con-
sult’’; and 
(2) by adding at the end the following: 
‘‘(B) REVIEW AND REPORTS REGARDING 
MEDICAID DSH.— 
‘‘(i) IN
GENERAL.—MACPAC shall 
review and submit an annual report to 
Congress on disproportionate share hos-
pital payments under section 1923. Each 
report shall include the information speci-
fied in clause (ii). 
‘‘(ii) REQUIRED
REPORT
INFORMA-
TION.—Each report required under this 
subparagraph shall include the following: 
‘‘(I) Data relating to changes in 
the number of uninsured individuals. 
‘‘(II) 
Data 
relating 
to 
the 
amount and sources of hospitals’ un-
compensated care costs, including the 
amount of such costs that are the re-
sult of providing unreimbursed or 
under-reimbursed 
services, 
charity 
care, or bad debt. 
‘‘(III) Data identifying hospitals 
with high levels of uncompensated 
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care that also provide access to essen-
tial community services for low-in-
come, uninsured, and vulnerable popu-
lations, such as graduate medical edu-
cation, and the continuum of primary 
through quarternary care, including 
the provision of trauma care and pub-
lic health services. 
‘‘(IV) State-specific analyses re-
garding the relationship between the 
most recent State DSH allotment and 
the projected State DSH allotment for 
the succeeding year and the data re-
ported under subclauses (I), (II), and 
(III) for the State. 
‘‘(iii) DATA.—Notwithstanding any 
other provision of law, the Secretary regu-
larly shall provide MACPAC with the most 
recent State reports and most recent inde-
pendent certified audits submitted under 
section 1923(j), cost reports submitted 
under title XVIII, and such other data as 
MACPAC may request for purposes of con-
ducting the reviews and preparing and sub-
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mitting the annual reports required under 
this subparagraph. 
‘‘(iv) SUBMISSION
DEADLINES.—The 
first report required under this subpara-
graph shall be submitted to Congress not 
later than February 1, 2016. Subsequent 
reports shall be submitted as part of, or 
with, each annual report required under 
paragraph (1)(C) during the period of fis-
cal years 2017 through 2024.’’. 
SEC. 222. REALIGNMENT OF THE MEDICARE SEQUESTER 
FOR FISCAL YEAR 2024. 
Paragraph (6) (relating to implementing direct 
spending reductions) of section 251A of the Balanced 
Budget and Emergency Deficit Control Act of 1985 (2 
U.S.C. 901a) is amended by adding at the end the fol-
lowing new subparagraph: 
‘‘(D) Notwithstanding the 2 percent limit speci-
fied in subparagraph (A) for payments for the Medi-
care programs specified in section 256(d), the se-
questration order of the President under such sub-
paragraph for fiscal year 2024 shall be applied to 
such payments so that— 
‘‘(i) with respect to the first 6 months in 
which such order is effective for such fiscal 
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year, the payment reduction shall be 4.0 per-
cent; and 
‘‘(ii) with respect to the second 6 months 
in which such order is so effective for such fis-
cal year, the payment reduction shall be 0.0 
percent.’’. 
SEC. 223. DEMONSTRATION PROGRAMS TO IMPROVE COM-
MUNITY MENTAL HEALTH SERVICES. 
(a) CRITERIA FOR CERTIFIED COMMUNITY BEHAV-
IORAL HEALTH CLINICS TO PARTICIPATE
IN DEM-
ONSTRATION PROGRAMS.— 
(1) PUBLICATION.—Not later than September 
1, 2015, the Secretary shall publish criteria for a 
clinic to be certified by a State as a certified com-
munity behavioral health clinic for purposes of par-
ticipating in a demonstration program conducted 
under subsection (d). 
(2) REQUIREMENTS.—The criteria published 
under this subsection shall include criteria with re-
spect to the following: 
(A) STAFFING.—Staffing requirements, in-
cluding criteria that staff have diverse discipli-
nary backgrounds, have necessary State-re-
quired license and accreditation, and are cul-
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turally and linguistically trained to serve the 
needs of the clinic’s patient population. 
(B) AVAILABILITY AND ACCESSIBILITY OF 
SERVICES.—Availability and accessibility of 
services, including crisis management services 
that are available and accessible 24 hours a 
day, the use of a sliding scale for payment, and 
no rejection for services or limiting of services 
on the basis of a patient’s ability to pay or a 
place of residence. 
(C) CARE COORDINATION.—Care coordina-
tion, including requirements to coordinate care 
across settings and providers to ensure seamless 
transitions for patients across the full spectrum 
of health services including acute, chronic, and 
behavioral health needs. Care coordination re-
quirements shall include partnerships or formal 
contracts with the following: 
(i) Federally-qualified health centers 
(and as applicable, rural health clinics) to 
provide Federally-qualified health center 
services (and as applicable, rural health 
clinic services) to the extent such services 
are not provided directly through the cer-
tified community behavioral health clinic. 
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(ii) Inpatient psychiatric facilities and 
substance use detoxification, post-detoxi-
fication step-down services, and residential 
programs. 
(iii) Other community or regional 
services, supports, and providers, including 
schools, child welfare agencies, juvenile and 
criminal justice agencies and facilities, In-
dian Health Service youth regional treat-
ment centers, State licensed and nationally 
accredited child placing agencies for thera-
peutic foster care service, and other social 
and human services. 
(iv) Department of Veterans Affairs 
medical centers, independent outpatient 
clinics, drop-in centers, and other facilities 
of the Department as defined in section 
1801 of title 38, United States Code. 
(v) Inpatient acute care hospitals and 
hospital outpatient clinics. 
(D) SCOPE OF SERVICES.—Provision (in a 
manner reflecting person-centered care) of the 
following services which, if not available directly 
through the certified community behavioral 
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health clinic, are provided or referred through 
formal relationships with other providers: 
(i) Crisis mental health services, in-
cluding 24-hour mobile crisis teams, emer-
gency crisis intervention services, and cri-
sis stabilization. 
(ii) Screening, assessment, and diag-
nosis, including risk assessment. 
(iii) Patient-centered treatment plan-
ning or similar processes, including risk as-
sessment and crisis planning. 
(iv) Outpatient mental health and 
substance use services. 
(v) Outpatient clinic primary care 
screening and monitoring of key health in-
dicators and health risk. 
(vi) Targeted case management. 
(vii) Psychiatric rehabilitation serv-
ices. 
(viii) Peer support and counselor serv-
ices and family supports. 
(ix) Intensive, community-based men-
tal health care for members of the armed 
forces and veterans, particularly those 
members and veterans located in rural 
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areas, provided the care is consistent with 
minimum clinical mental health guidelines 
promulgated by the Veterans Health Ad-
ministration including clinical guidelines 
contained in the Uniform Mental Health 
Services Handbook of such Administration. 
(E) QUALITY AND OTHER REPORTING.— 
Reporting of encounter data, clinical outcomes 
data, quality data, and such other data as the 
Secretary requires. 
(F) ORGANIZATIONAL
AUTHORITY.—Cri-
teria that a clinic be a non-profit or part of a 
local government behavioral health authority or 
operated under the authority of the Indian 
Health Service, an Indian tribe or tribal organi-
zation pursuant to a contract, grant, coopera-
tive agreement, or compact with the Indian 
Health Service pursuant to the Indian Self-De-
termination Act (25 U.S.C. 450 et seq.), or an 
urban Indian organization pursuant to a grant 
or contract with the Indian Health Service 
under title V of the Indian Health Care Im-
provement Act (25 U.S.C. 1601 et seq.). 
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(b) GUIDANCE ON DEVELOPMENT OF PROSPECTIVE 
PAYMENT SYSTEM FOR TESTING UNDER DEMONSTRA-
TION PROGRAMS.— 
(1) IN GENERAL.—Not later than September 1, 
2015, the Secretary, through the Administrator of 
the Centers for Medicare & Medicaid Services, shall 
issue guidance for the establishment of a prospective 
payment system that shall only apply to medical as-
sistance for mental health services furnished by a 
certified community behavioral health clinic partici-
pating in a demonstration program under subsection 
(d). 
(2) REQUIREMENTS.—The guidance issued by 
the Secretary under paragraph (1) shall provide 
that— 
(A) no payment shall be made for inpatient 
care, residential treatment, room and board ex-
penses, or any other non-ambulatory services, 
as determined by the Secretary; and 
(B) no payment shall be made to satellite 
facilities of certified community behavioral 
health clinics if such facilities are established 
after the date of enactment of this Act. 
(c) PLANNING GRANTS.— 
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(1) IN GENERAL.—Not later than January 1, 
2016, the Secretary shall award planning grants to 
States for the purpose of developing proposals to 
participate in time-limited demonstration programs 
described in subsection (d). 
(2) USE OF FUNDS.—A State awarded a plan-
ning grant under this subsection shall— 
(A) solicit input with respect to the devel-
opment of such a demonstration program from 
patients, providers, and other stakeholders; 
(B) certify clinics as certified community 
behavioral health clinics for purposes of partici-
pating in a demonstration program conducted 
under subsection (d); and 
(C) establish a prospective payment system 
for mental health services furnished by a cer-
tified community behavioral health clinic par-
ticipating in a demonstration program under 
subsection (d) in accordance with the guidance 
issued under subsection (b). 
(d) DEMONSTRATION PROGRAMS.— 
(1) IN GENERAL.—Not later than September 1, 
2017, the Secretary shall select States to participate 
in demonstration programs that are developed 
through planning grants awarded under subsection 
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(c), meet the requirements of this subsection, and 
represent a diverse selection of geographic areas, in-
cluding rural and underserved areas. 
(2) APPLICATION REQUIREMENTS.— 
(A) IN GENERAL.—The Secretary shall so-
licit applications to participate in demonstration 
programs under this subsection solely from 
States awarded planning grants under sub-
section (c). 
(B) REQUIRED INFORMATION.—An appli-
cation for a demonstration program under this 
subsection shall include the following: 
(i) The target Medicaid population to 
be served under the demonstration pro-
gram. 
(ii) A list of participating certified 
community behavioral health clinics. 
(iii) Verification that the State has 
certified a participating clinic as a certified 
community behavioral health clinic in ac-
cordance with the requirements of sub-
section (b). 
(iv) A description of the scope of the 
mental health services available under the 
State Medicaid program that will be paid 
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for under the prospective payment system 
tested in the demonstration program. 
(v) Verification that the State has 
agreed to pay for such services at the rate 
established under the prospective payment 
system. 
(vi) Such other information as the 
Secretary may require relating to the dem-
onstration program including with respect 
to determining the soundness of the pro-
posed prospective payment system. 
(3) NUMBER AND LENGTH OF DEMONSTRATION 
PROGRAMS.—Not more than 8 States shall be se-
lected for 2-year demonstration programs under this 
subsection. 
(4) REQUIREMENTS
FOR
SELECTING
DEM-
ONSTRATION PROGRAMS.— 
(A) IN
GENERAL.—The Secretary shall 
give preference to selecting demonstration pro-
grams where participating certified community 
behavioral health clinics— 
(i) provide the most complete scope of 
services described in subsection (a)(2)(D) 
to individuals eligible for medical assist-
ance under the State Medicaid program; 
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(ii) will improve availability of, access 
to, and participation in, services described 
in subsection (a)(2)(D) to individuals eligi-
ble for medical assistance under the State 
Medicaid program; 
(iii) will improve availability of, access 
to, and participation in assisted outpatient 
mental health treatment in the State; or 
(iv) demonstrate the potential to ex-
pand available mental health services in a 
demonstration area and increase the qual-
ity of such services without increasing net 
Federal spending. 
(5) PAYMENT FOR MEDICAL ASSISTANCE FOR 
MENTAL
HEALTH
SERVICES
PROVIDED
BY
CER-
TIFIED
COMMUNITY
BEHAVIORAL
HEALTH
CLIN-
ICS.— 
(A) IN GENERAL.—The Secretary shall pay 
a State participating in a demonstration pro-
gram under this subsection the Federal match-
ing percentage specified in subparagraph (B) 
for amounts expended by the State to provide 
medical assistance for mental health services 
described in the demonstration program appli-
cation in accordance with paragraph (2)(B)(iv) 
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that are provided by certified community behav-
ioral health clinics to individuals who are en-
rolled in the State Medicaid program. Payments 
to States made under this paragraph shall be 
considered to have been under, and are subject 
to the requirements of, section 1903 of the So-
cial Security Act (42 U.S.C. 1396b). 
(B) FEDERAL MATCHING PERCENTAGE.— 
The Federal matching percentage specified in 
this subparagraph is with respect to medical as-
sistance described in subparagraph (A) that is 
furnished— 
(i) to a newly eligible individual de-
scribed in paragraph (2) of section 1905(y) 
of the Social Security Act (42 U.S.C. 
1396d(y)), the matching rate applicable 
under paragraph (1) of that section; and 
(ii) to an individual who is not a 
newly eligible individual (as so described) 
but who is eligible for medical assistance 
under the State Medicaid program, the en-
hanced FMAP applicable to the State. 
(C) LIMITATIONS.— 
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(i) IN GENERAL.—Payments shall be 
made under this paragraph to a State only 
for mental health services— 
(I) that are described in the dem-
onstration program application in ac-
cordance with paragraph (2)(iv); 
(II) for which payment is avail-
able under the State Medicaid pro-
gram; and 
(III) that are provided to an indi-
vidual who is eligible for medical as-
sistance under the State Medicaid 
program. 
(ii) 
PROHIBITED
PAYMENTS.—No 
payment shall be made under this para-
graph— 
(I) for inpatient care, residential 
treatment, room and board expenses, 
or any other non-ambulatory services, 
as determined by the Secretary; or 
(II) with respect to payments 
made to satellite facilities of certified 
community behavioral health clinics if 
such facilities are established after the 
date of enactment of this Act. 
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(6) WAIVER
OF
STATEWIDENESS
REQUIRE-
MENT.—The 
Secretary 
shall 
waive 
section 
1902(a)(1) of the Social Security Act (42 U.S.C. 
1396a(a)(1)) (relating to statewideness) as may be 
necessary to conduct demonstration programs in ac-
cordance with the requirements of this subsection. 
(7) ANNUAL REPORTS.— 
(A) IN GENERAL.—Not later than 1 year 
after the date on which the first State is se-
lected for a demonstration program under this 
subsection, and annually thereafter, the Sec-
retary shall submit to Congress an annual re-
port on the use of funds provided under all 
demonstration programs conducted under this 
subsection. Each such report shall include— 
(i) an assessment of access to commu-
nity-based mental health services under the 
Medicaid program in the area or areas of 
a State targeted by a demonstration pro-
gram compared to other areas of the State; 
(ii) an assessment of the quality and 
scope of services provided by certified com-
munity behavioral health clinics compared 
to community-based mental health services 
provided in States not participating in a 
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demonstration program under this sub-
section and in areas of a demonstration 
State that are not participating in the 
demonstration program; and 
(iii) an assessment of the impact of 
the demonstration programs on the Fed-
eral and State costs of a full range of men-
tal health services (including inpatient, 
emergency and ambulatory services). 
(B) RECOMMENDATIONS.—Not later than 
December 31, 2021, the Secretary shall submit 
to 
Congress 
recommendations 
concerning 
whether the demonstration programs under this 
section should be continued, expanded, modi-
fied, or terminated. 
(e) DEFINITIONS.—In this section: 
(1) FEDERALLY-QUALIFIED
HEALTH
CENTER 
SERVICES; FEDERALLY-QUALIFIED HEALTH CENTER; 
RURAL HEALTH CLINIC SERVICES; RURAL HEALTH 
CLINIC.—The terms ‘‘Federally-qualified health cen-
ter services’’, ‘‘Federally-qualified health center’’, 
‘‘rural health clinic services’’, and ‘‘rural health clin-
ic’’ have the meanings given those terms in section 
1905(l) of the Social Security Act (42 U.S.C. 
1396d(l)). 
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(2) ENHANCED
FMAP.—The term ‘‘enhanced 
FMAP’’ has the meaning given that term in section 
2105(b) of the Social Security Act (42 U.S.C. 
1397dd(b)) but without regard to the second and 
third sentences of that section. 
(3) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of Health and Human Services. 
(4) STATE.—The term ‘‘State’’ has the mean-
ing given such term for purposes of title XIX of the 
Social Security Act (42 U.S.C. 1396 et seq.). 
(f) FUNDING.— 
(1) IN
GENERAL.—Out of any funds in the 
Treasury not otherwise appropriated, there is appro-
priated to the Secretary— 
(A) for purposes of carrying out sub-
sections (a), (b), and (d)(7), $2,000,000 for fis-
cal year 2014; and 
(B) for purposes of awarding planning 
grants under subsection (c), $25,000,000 for 
fiscal year 2016. 
(2) AVAILABILITY.—Funds appropriated under 
paragraph (1) shall remain available until expended. 
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SEC. 224. ASSISTED OUTPATIENT TREATMENT GRANT PRO-
GRAM FOR INDIVIDUALS WITH SERIOUS MEN-
TAL ILLNESS. 
(a) IN GENERAL.—The Secretary shall establish a 4- 
year pilot program to award not more than 50 grants each 
year to eligible entities for assisted outpatient treatment 
programs for individuals with serious mental illness. 
(b) CONSULTATION.—The Secretary shall carry out 
this section in consultation with the Director of the Na-
tional Institute of Mental Health, the Attorney General 
of the United States, the Administrator of the Administra-
tion for Community Living, and the Administrator of the 
Substance Abuse and Mental Health Services Administra-
tion. 
(c) SELECTING
AMONG
APPLICANTS.—The Sec-
retary— 
(1) may only award grants under this section to 
applicants that have not previously implemented an 
assisted outpatient treatment program; and 
(2) shall evaluate applicants based on their po-
tential to reduce hospitalization, homelessness, incar-
ceration, and interaction with the criminal justice 
system while improving the health and social out-
comes of the patient. 
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a report to the appropriate congressional committees on 
the grant program under this section. Each such report 
shall include an evaluation of the following: 
(1) Cost savings and public health outcomes 
such as mortality, suicide, substance abuse, hos-
pitalization, and use of services. 
(2) Rates of incarceration by patients. 
(3) Rates of homelessness among patients. 
(4) Patient and family satisfaction with pro-
gram participation. 
(f) DEFINITIONS.—In this section: 
(1) The term ‘‘assisted outpatient treatment’’ 
means medically prescribed mental health treatment 
that a patient receives while living in a community 
under the terms of a law authorizing a State or local 
court to order such treatment. 
(2) The term ‘‘eligible entity’’ means a county, 
city, mental health system, mental health court, or 
any other entity with authority under the law of the 
State in which the grantee is located to implement, 
monitor, and oversee assisted outpatient treatment 
programs. 
(3) The term ‘‘Secretary’’ means the Secretary 
of Health and Human Services. 
(g) FUNDING.— 
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(1) AMOUNT OF GRANTS.—A grant under this 
section shall be in an amount that is not more than 
$1,000,000 for each of fiscal years 2015 through 
2018. Subject to the preceding sentence, the Sec-
retary shall determine the amount of each grant 
based on the population of the area, including esti-
mated patients, to be served under the grant. 
(2) AUTHORIZATION
OF
APPROPRIATIONS.— 
There is authorized to be appropriated to carry out 
this section $15,000,000 for each of fiscal years 
2015 through 2018. 
SEC. 225. EXCLUSION FROM PAYGO SCORECARDS. 
(a) STATUTORY PAY-AS-YOU-GO SCORECARDS.—The 
budgetary effects of this Act shall not be entered on either 
PAYGO scorecard maintained pursuant to section 4(d) of 
the Statutory Pay-As-You-Go Act of 2010. 
(b) SENATE PAYGO SCORECARDS.—The budgetary 
effects of this Act shall not be entered on any PAYGO 
scorecard maintained for purposes of section 201 of S. 
Con. Res. 21 (110th Congress). 
Æ 
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