I 
113TH CONGRESS 
2D SESSION 
H. R. 4209 
To amend title XVIII of the Social Security Act to repeal the Medicare 
sustainable growth rate and improve Medicare payments for physicians 
and other professionals, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 12, 2014 
Mr. TIERNEY introduced the following bill; which was referred to the Com-
mittee on Energy and Commerce, and in addition to the Committees on 
Ways and Means, the Judiciary, and the Budget, for a period to be sub-
sequently determined by the Speaker, in each case for consideration of 
such provisions as fall within the jurisdiction of the committee concerned 
A BILL 
To amend title XVIII of the Social Security Act to repeal 
the Medicare sustainable growth rate and improve Medi-
care payments for physicians and other professionals, 
and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘SGR Repeal and Medicare Provider Payment Moderniza-
tion Act of 2014’’. 
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(b) TABLE OF CONTENTS.—The table of contents of 
this Act is as follows: 
Sec. 1. Short title; table of contents. 
Sec. 2. Repealing the sustainable growth rate (SGR) and improving Medicare 
payment for physicians’ services. 
Sec. 3. Priorities and funding for measure development. 
Sec. 4. Encouraging care management for individuals with chronic care needs. 
Sec. 5. Ensuring accurate valuation of services under the physician fee sched-
ule. 
Sec. 6. Promoting evidence-based care. 
Sec. 7. Empowering beneficiary choices through access to information on physi-
cians’ services. 
Sec. 8. Expanding availability of Medicare data. 
Sec. 9. Reducing administrative burden and other provisions. 
Sec. 10. Savings from overseas contingency and related activities. 
SEC. 2. REPEALING THE SUSTAINABLE GROWTH RATE 
(SGR) AND IMPROVING MEDICARE PAYMENT 
FOR PHYSICIANS’ SERVICES. 
(a) STABILIZING FEE UPDATES.— 
(1) REPEAL
OF
SGR
PAYMENT
METHOD-
OLOGY.—Section 1848 of the Social Security Act 
(42 U.S.C. 1395w–4) is amended— 
(A) in subsection (d)— 
(i) in paragraph (1)(A), by inserting 
‘‘or a subsequent paragraph’’ after ‘‘para-
graph (4)’’; and 
(ii) in paragraph (4)— 
(I) in the heading, by inserting 
‘‘AND
ENDING
WITH
2013’’ after 
‘‘YEARS BEGINNING WITH 2001’’; and 
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(II) in subparagraph (A), by in-
serting ‘‘and ending with 2013’’ after 
‘‘a year beginning with 2001’’; and 
(B) in subsection (f)— 
(i) in paragraph (1)(B), by inserting 
‘‘through 2013’’ after ‘‘of each succeeding 
year’’; and 
(ii) in paragraph (2), in the matter 
preceding subparagraph (A), by inserting 
‘‘and ending with 2013’’ after ‘‘beginning 
with 2000’’. 
(2) UPDATE OF RATES FOR APRIL THROUGH 
DECEMBER
OF
2014, 
2015, 
AND
SUBSEQUENT 
YEARS.—Subsection (d) of section 1848 of the Social 
Security Act (42 U.S.C. 1395w–4) is amended by 
striking paragraph (15) and inserting the following 
new paragraphs: 
‘‘(15) UPDATE FOR 2014 THROUGH 2018.—The 
update to the single conversion factor established in 
paragraph (1)(C) for 2014 and each subsequent 
year through 2018 shall be 0.5 percent. 
‘‘(16) UPDATE FOR 2019 THROUGH 2023.—The 
update to the single conversion factor established in 
paragraph (1)(C) for 2019 and each subsequent 
year through 2023 shall be zero percent. 
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‘‘(17) UPDATE
FOR
2024
AND
SUBSEQUENT 
YEARS.—The update to the single conversion factor 
established in paragraph (1)(C) for 2024 and each 
subsequent year shall be— 
‘‘(A) for items and services furnished by a 
qualifying APM participant (as defined in sec-
tion 1833(z)(2)) for such year, 1.0 percent; and 
‘‘(B) for other items and services, 0.5 per-
cent.’’. 
(3) MEDPAC REPORTS.— 
(A) INITIAL REPORT.—Not later than July 
1, 2016, the Medicare Payment Advisory Com-
mission shall submit to Congress a report on 
the relationship between— 
(i) physician and other health profes-
sional utilization and expenditures (and the 
rate of increase of such utilization and ex-
penditures) of items and services for which 
payment is made under section 1848 of the 
Social Security Act (42 U.S.C. 1395w–4); 
and 
(ii) total utilization and expenditures 
(and the rate of increase of such utilization 
and expenditures) under parts A, B, and D 
of title XVIII of such Act. 
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Such report shall include a methodology to de-
scribe such relationship and the impact of 
changes in such physician and other health pro-
fessional practice and service ordering patterns 
on total utilization and expenditures under 
parts A, B, and D of such title. 
(B) FINAL REPORT.—Not later than July 
1, 2020, the Medicare Payment Advisory Com-
mission shall submit to Congress a report on 
the relationship described in subparagraph (A), 
including the results determined from applying 
the methodology included in the report sub-
mitted under such subparagraph. 
(C) REPORT ON UPDATE TO PHYSICIANS’ 
SERVICES UNDER MEDICARE.—Not later than 
July 1, 2018, the Medicare Payment Advisory 
Commission shall submit to Congress a report 
on— 
(i) the payment update for profes-
sional services applied under the Medicare 
program under title XVIII of the Social 
Security Act for the period of years 2014 
through 2018; 
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(ii) the effect of such update on the 
efficiency, economy, and quality of care 
provided under such program; 
(iii) the effect of such update on en-
suring a sufficient number of providers to 
maintain access to care by Medicare bene-
ficiaries; and 
(iv) recommendations for any future 
payment updates for professional services 
under such program to ensure adequate 
access to care is maintained for Medicare 
beneficiaries. 
(b) CONSOLIDATION
OF CERTAIN CURRENT LAW 
PERFORMANCE PROGRAMS WITH NEW MERIT-BASED IN-
CENTIVE PAYMENT SYSTEM.— 
(1) EHR MEANINGFUL USE INCENTIVE PRO-
GRAM.— 
(A) SUNSETTING SEPARATE MEANINGFUL 
USE
PAYMENT
ADJUSTMENTS.—Section 
1848(a)(7)(A) of the Social Security Act (42 
U.S.C. 1395w–4(a)(7)(A)) is amended— 
(i) in clause (i), by striking ‘‘or any 
subsequent payment year’’ and inserting 
‘‘or 2017’’; 
(ii) in clause (ii)— 
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(I) in the matter preceding sub-
clause (I), by striking ‘‘Subject to 
clause (iii), for’’ and inserting ‘‘For’’; 
(II) in subclause (I), by adding 
at the end ‘‘and’’; 
(III) in subclause (II), by strik-
ing ‘‘; and’’ and inserting a period; 
and 
(IV) by striking subclause (III); 
and 
(iii) by striking clause (iii). 
(B) CONTINUATION OF MEANINGFUL USE 
DETERMINATIONS
FOR
MIPS.—Section 
1848(o)(2) of the Social Security Act (42 
U.S.C. 1395w–4(o)(2)) is amended— 
(i) in subparagraph (A), in the matter 
preceding clause (i)— 
(I) by striking ‘‘For purposes of 
paragraph (1), an’’ and inserting 
‘‘An’’; and 
(II) by inserting ‘‘, or pursuant 
to subparagraph (D) for purposes of 
subsection (q), for a performance pe-
riod under such subsection for a year’’ 
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after ‘‘under such subsection for a 
year’’; and 
(ii) by adding at the end the following 
new subparagraph: 
‘‘(D) CONTINUED APPLICATION FOR PUR-
POSES
OF
MIPS.—With respect to 2018 and 
each subsequent payment year, the Secretary 
shall, for purposes of subsection (q) and in ac-
cordance with paragraph (1)(F) of such sub-
section, determine whether an eligible profes-
sional who is a MIPS eligible professional (as 
defined in subsection (q)(1)(C)) for such year is 
a meaningful EHR user under this paragraph 
for the performance period under subsection (q) 
for such year.’’. 
(2) QUALITY REPORTING.— 
(A) SUNSETTING SEPARATE QUALITY RE-
PORTING
INCENTIVES.—Section 1848(a)(8)(A) 
of the Social Security Act (42 U.S.C. 1395w– 
4(a)(8)(A)) is amended— 
(i) in clause (i), by striking ‘‘or any 
subsequent year’’ and inserting ‘‘or 2017’’; 
and 
(ii) in clause (ii)(II), by striking ‘‘and 
each subsequent year’’. 
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(B) CONTINUATION
OF
QUALITY
MEAS-
URES
AND
PROCESSES
FOR
MIPS.—Section 
1848 of the Social Security Act (42 U.S.C. 
1395w–4) is amended— 
(i) in subsection (k), by adding at the 
end the following new paragraph: 
‘‘(9) CONTINUED APPLICATION FOR PURPOSES 
OF MIPS AND FOR CERTAIN PROFESSIONALS VOLUN-
TEERING TO REPORT.—The Secretary shall, in ac-
cordance with subsection (q)(1)(F), carry out the 
provisions of this subsection— 
‘‘(A) for purposes of subsection (q); and 
‘‘(B) for eligible professionals who are not 
MIPS eligible professionals (as defined in sub-
section (q)(1)(C)) for the year involved.’’; and 
(ii) in subsection (m)— 
(I) by redesignating paragraph 
(7) added by section 10327(a) of Pub-
lic Law 111–148 as paragraph (8); 
and 
(II) by adding at the end the fol-
lowing new paragraph: 
‘‘(9) CONTINUED APPLICATION FOR PURPOSES 
OF MIPS AND FOR CERTAIN PROFESSIONALS VOLUN-
TEERING TO REPORT.—The Secretary shall, in ac-
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cordance with subsection (q)(1)(F), carry out the 
processes under this subsection— 
‘‘(A) for purposes of subsection (q); and 
‘‘(B) for eligible professionals who are not 
MIPS eligible professionals (as defined in sub-
section (q)(1)(C)) for the year involved.’’. 
(3) VALUE-BASED PAYMENTS.— 
(A) SUNSETTING SEPARATE VALUE-BASED 
PAYMENTS.—Clause 
(iii) 
of 
section 
1848(p)(4)(B) of the Social Security Act (42 
U.S.C. 1395w–4(p)(4)(B)) is amended to read 
as follows: 
‘‘(iii) APPLICATION.—The Secretary 
shall apply the payment modifier estab-
lished under this subsection for items and 
services furnished on or after January 1, 
2015, but before January 1, 2018, with re-
spect to specific physicians and groups of 
physicians the Secretary determines appro-
priate. Such payment modifier shall not be 
applied for items and services furnished on 
or after January 1, 2018.’’. 
(B) CONTINUATION OF VALUE-BASED PAY-
MENT MODIFIER MEASURES FOR MIPS.—Section 
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1848(p) of the Social Security Act (42 U.S.C. 
1395w–4(p)) is amended— 
(i) in paragraph (2), by adding at the 
end the following new subparagraph: 
‘‘(C) CONTINUED APPLICATION FOR PUR-
POSES OF MIPS.—The Secretary shall, in ac-
cordance with subsection (q)(1)(F), carry out 
subparagraph (B) for purposes of subsection 
(q).’’; and 
(ii) in paragraph (3), by adding at the 
end the following: ‘‘With respect to 2018 
and each subsequent year, the Secretary 
shall, 
in 
accordance 
with 
subsection 
(q)(1)(F), carry out this paragraph for 
purposes of subsection (q).’’. 
(c) MERIT-BASED INCENTIVE PAYMENT SYSTEM.— 
(1) IN GENERAL.—Section 1848 of the Social 
Security Act (42 U.S.C. 1395w–4) is amended by 
adding at the end the following new subsection: 
‘‘(q) MERIT-BASED INCENTIVE PAYMENT SYSTEM.— 
‘‘(1) ESTABLISHMENT.— 
‘‘(A) IN
GENERAL.—Subject to the suc-
ceeding provisions of this subsection, the Sec-
retary shall establish an eligible professional 
Merit-based Incentive Payment System (in this 
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subsection referred to as the ‘MIPS’) under 
which the Secretary shall— 
‘‘(i) develop a methodology for assess-
ing the total performance of each MIPS el-
igible professional according to perform-
ance standards under paragraph (3) for a 
performance period (as established under 
paragraph (4)) for a year; 
‘‘(ii) using such methodology, provide 
for a composite performance score in ac-
cordance with paragraph (5) for each such 
professional for each performance period; 
and 
‘‘(iii) use such composite performance 
score of the MIPS eligible professional for 
a performance period for a year to deter-
mine and apply a MIPS adjustment factor 
(and, as applicable, an additional MIPS 
adjustment factor) under paragraph (6) to 
the professional for the year. 
‘‘(B) PROGRAM
IMPLEMENTATION.—The 
MIPS shall apply to payments for items and 
services furnished on or after January 1, 2018. 
‘‘(C) MIPS ELIGIBLE PROFESSIONAL DE-
FINED.— 
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‘‘(i) IN
GENERAL.—For purposes of 
this subsection, subject to clauses (ii) and 
(iv), the term ‘MIPS eligible professional’ 
means— 
‘‘(I) for the first and second 
years for which the MIPS applies to 
payments (and for the performance 
period for such first and second year), 
a physician (as defined in section 
1861(r)), a physician assistant, nurse 
practitioner, and clinical nurse spe-
cialist (as such terms are defined in 
section 1861(aa)(5)), and a certified 
registered nurse anesthetist (as de-
fined in section 1861(bb)(2)) and a 
group that includes such profes-
sionals; and 
‘‘(II) for the third year for which 
the MIPS applies to payments (and 
for the performance period for such 
third year) and for each succeeding 
year (and for the performance period 
for each such year), the professionals 
described in subclause (I) and such 
other eligible professionals (as defined 
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in subsection (k)(3)(B)) as specified 
by the Secretary and a group that in-
cludes such professionals. 
‘‘(ii) EXCLUSIONS.—For purposes of 
clause (i), the term ‘MIPS eligible profes-
sional’ does not include, with respect to a 
year, an eligible professional (as defined in 
subsection (k)(3)(B)) who— 
‘‘(I) is a qualifying APM partici-
pant 
(as 
defined 
in 
section 
1833(z)(2)); 
‘‘(II) subject to clause (vii), is a 
partial qualifying APM participant (as 
defined in clause (iii)) for the most re-
cent period for which data are avail-
able and who, for the performance pe-
riod with respect to such year, does 
not report on applicable measures and 
activities 
described 
in 
paragraph 
(2)(B) that are required to be re-
ported by such a professional under 
the MIPS; or 
‘‘(III) for the performance period 
with respect to such year, does not ex-
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ceed the low-volume threshold meas-
urement selected under clause (iv). 
‘‘(iii) PARTIAL QUALIFYING APM PAR-
TICIPANT.—For purposes of this subpara-
graph, the term ‘partial qualifying APM 
participant’ means, with respect to a year, 
an eligible professional for whom the Sec-
retary determines the minimum payment 
percentage (or percentages), as applicable, 
described in paragraph (2) of section 
1833(z) for such year have not been satis-
fied, but who would be considered a quali-
fying APM participant (as defined in such 
paragraph) for such year if— 
‘‘(I) with respect to 2018 and 
2019, the reference in subparagraph 
(A) of such paragraph to 25 percent 
was instead a reference to 20 percent; 
‘‘(II) with respect to 2020 and 
2021— 
‘‘(aa) the reference in sub-
paragraph (B)(i) of such para-
graph to 50 percent was instead 
a reference to 40 percent; and 
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‘‘(bb) the references in sub-
paragraph (B)(ii) of such para-
graph to 50 percent and 25 per-
cent of such paragraph were in-
stead references to 40 percent 
and 20 percent, respectively; and 
‘‘(III) with respect to 2022 and 
subsequent years— 
‘‘(aa) the reference in sub-
paragraph (C)(i) of such para-
graph to 75 percent was instead 
a reference to 50 percent; and 
‘‘(bb) the references in sub-
paragraph (C)(ii) of such para-
graph to 75 percent and 25 per-
cent of such paragraph were in-
stead references to 50 percent 
and 20 percent, respectively. 
‘‘(iv) SELECTION
OF
LOW-VOLUME 
THRESHOLD
MEASUREMENT.—The Sec-
retary shall select a low-volume threshold 
to apply for purposes of clause (ii)(III), 
which may include one or more or a com-
bination of the following: 
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‘‘(I) The minimum number (as 
determined by the Secretary) of indi-
viduals enrolled under this part who 
are treated by the eligible professional 
for the performance period involved. 
‘‘(II) The minimum number (as 
determined by the Secretary) of items 
and services furnished to individuals 
enrolled under this part by such pro-
fessional for such performance period. 
‘‘(III) The minimum amount (as 
determined by the Secretary) of al-
lowed charges billed by such profes-
sional under this part for such per-
formance period. 
‘‘(v) TREATMENT OF NEW MEDICARE 
ENROLLED ELIGIBLE PROFESSIONALS.—In 
the case of a professional who first be-
comes a Medicare enrolled eligible profes-
sional during the performance period for a 
year (and had not previously submitted 
claims under this title such as a person, an 
entity, or a part of a physician group or 
under a different billing number or tax 
identifier), such professional shall not be 
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treated under this subsection as a MIPS 
eligible professional until the subsequent 
year and performance period for such sub-
sequent year. 
‘‘(vi) CLARIFICATION.—In the case of 
items and services furnished during a year 
by an individual who is not a MIPS eligible 
professional (including pursuant to clauses 
(ii) and (v)) with respect to a year, in no 
case shall a MIPS adjustment factor (or 
additional MIPS adjustment factor) under 
paragraph (6) apply to such individual for 
such year. 
‘‘(vii) PARTIAL QUALIFYING APM PAR-
TICIPANT CLARIFICATIONS.— 
‘‘(I) TREATMENT AS MIPS ELIGI-
BLE PROFESSIONAL.—In the case of 
an eligible professional who is a par-
tial qualifying APM participant, with 
respect to a year, and who for the 
performance period for such year re-
ports on applicable measures and ac-
tivities described in paragraph (2)(B) 
that are required to be reported by 
such a professional under the MIPS, 
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such eligible professional is considered 
to be a MIPS eligible professional 
with respect to such year. 
‘‘(II) NOT ELIGIBLE FOR QUALI-
FYING
APM
PARTICIPANT
PAY-
MENTS.—In no case shall an eligible 
professional who is a partial quali-
fying APM participant, with respect 
to a year, be considered a qualifying 
APM participant (as defined in para-
graph (2) of section 1833(z)) for such 
year or be eligible for the additional 
payment under paragraph (1) of such 
section for such year. 
‘‘(D) APPLICATION
TO
GROUP
PRAC-
TICES.— 
‘‘(i) IN GENERAL.—Under the MIPS: 
‘‘(I) 
QUALITY
PERFORMANCE 
CATEGORY.—The Secretary shall es-
tablish and apply a process that in-
cludes features of the provisions of 
subsection (m)(3)(C) for MIPS eligi-
ble professionals in a group practice 
with respect to assessing performance 
of such group with respect to the per-
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formance category described in clause 
(i) of paragraph (2)(A). 
‘‘(II) OTHER PERFORMANCE CAT-
EGORIES.—The Secretary may estab-
lish and apply a process that includes 
features of the provisions of sub-
section (m)(3)(C) for MIPS eligible 
professionals in a group practice with 
respect to assessing the performance 
of such group with respect to the per-
formance 
categories 
described 
in 
clauses (ii) through (iv) of such para-
graph. 
‘‘(ii) ENSURING COMPREHENSIVENESS 
OF
GROUP
PRACTICE
ASSESSMENT.—The 
process established under clause (i) shall to 
the extent practicable reflect the range of 
items and services furnished by the MIPS 
eligible professionals in the group practice 
involved. 
‘‘(iii) CLARIFICATION.—MIPS eligible 
professionals electing to be a virtual group 
under paragraph (5)(I) shall not be consid-
ered MIPS eligible professionals in a group 
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practice for purposes of applying this sub-
paragraph. 
‘‘(E) USE
OF
REGISTRIES.—Under the 
MIPS, the Secretary shall encourage the use of 
qualified clinical data registries pursuant to 
subsection (m)(3)(E) in carrying out this sub-
section. 
‘‘(F) APPLICATION
OF
CERTAIN
PROVI-
SIONS.—In applying a provision of subsection 
(k), (m), (o), or (p) for purposes of this sub-
section, the Secretary shall— 
‘‘(i) adjust the application of such 
provision to ensure the provision is con-
sistent with the provisions of this sub-
section; and 
‘‘(ii) not apply such provision to the 
extent that the provision is duplicative with 
a provision of this subsection. 
‘‘(G) ACCOUNTING FOR RISK FACTORS.— 
‘‘(i) RISK FACTORS.—Taking into ac-
count the relevant studies conducted and 
recommendations made in reports under 
section 2(f)(1) of the SGR Repeal and 
Medicare Provider Payment Modernization 
Act of 2014, the Secretary, on an ongoing 
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basis, shall estimate how an individual’s 
health status and other risk factors affect 
quality and resource use outcome measures 
and, as feasible, shall incorporate informa-
tion from quality and resource use outcome 
measurement (including care episode and 
patient condition groups) into the MIPS. 
‘‘(ii) ACCOUNTING FOR OTHER FAC-
TORS
IN
PAYMENT
ADJUSTMENTS.—Tak-
ing into account the studies conducted and 
recommendations made in reports under 
section 2(f)(1) of the SGR Repeal and 
Medicare Provider Payment Modernization 
Act of 2014 and other information as ap-
propriate, the Secretary shall account for 
identified factors with an effect on quality 
and resource use outcome measures when 
determining payment adjustments, com-
posite performance scores, scores for per-
formance categories, or scores for meas-
ures or activities under the MIPS. 
‘‘(2) MEASURES AND ACTIVITIES UNDER PER-
FORMANCE CATEGORIES.— 
‘‘(A) PERFORMANCE CATEGORIES.—Under 
the MIPS, the Secretary shall use the following 
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performance categories (each of which is re-
ferred to in this subsection as a performance 
category) in determining the composite per-
formance score under paragraph (5): 
‘‘(i) Quality. 
‘‘(ii) Resource use. 
‘‘(iii) Clinical practice improvement 
activities. 
‘‘(iv) Meaningful use of certified EHR 
technology. 
‘‘(B) MEASURES
AND
ACTIVITIES
SPECI-
FIED FOR EACH CATEGORY.—For purposes of 
paragraph (3)(A) and subject to subparagraph 
(C), measures and activities specified for a per-
formance period (as established under para-
graph (4)) for a year are as follows: 
‘‘(i) QUALITY.—For the performance 
category described in subparagraph (A)(i), 
the quality measures included in the final 
measures list published under subpara-
graph (D)(i) for such year and the list of 
quality measures described in subpara-
graph (D)(vi) used by qualified clinical 
data registries under subsection (m)(3)(E). 
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‘‘(ii) RESOURCE USE.—For the per-
formance category described in subpara-
graph (A)(ii), the measurement of resource 
use for such period under subsection 
(p)(3), using the methodology under sub-
section (r) as appropriate, and, as feasible 
and applicable, accounting for the cost of 
drugs under part D. 
‘‘(iii) CLINICAL
PRACTICE
IMPROVE-
MENT
ACTIVITIES.—For the performance 
category 
described 
in 
subparagraph 
(A)(iii), clinical practice improvement ac-
tivities 
(as 
defined 
in 
subparagraph 
(C)(v)(III)) under subcategories specified 
by the Secretary for such period, which 
shall include at least the following: 
‘‘(I) The subcategory of expanded 
practice access, which shall include ac-
tivities such as same day appoint-
ments for urgent needs and after 
hours access to clinician advice. 
‘‘(II) The subcategory of popu-
lation management, which shall in-
clude activities such as monitoring 
health conditions of individuals to pro-
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vide timely health care interventions 
or participation in a qualified clinical 
data registry. 
‘‘(III) The subcategory of care 
coordination, which shall include ac-
tivities such as timely communication 
of test results, timely exchange of 
clinical information to patients and 
other providers, and use of remote 
monitoring or telehealth. 
‘‘(IV) The subcategory of bene-
ficiary engagement, which shall in-
clude activities such as the establish-
ment of care plans for individuals 
with complex care needs, beneficiary 
self-management 
assessment 
and 
training, and using shared decision- 
making mechanisms. 
‘‘(V) The subcategory of patient 
safety and practice assessment, such 
as through use of clinical or surgical 
checklists and practice assessments 
related to maintaining certification. 
‘‘(VI) The subcategory of partici-
pation in an alternative payment 
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model 
(as 
defined 
in 
section 
1833(z)(3)(C)). 
In establishing activities under this clause, 
the Secretary shall give consideration to 
the circumstances of small practices (con-
sisting of 15 or fewer professionals) and 
practices located in rural areas and in 
health professional shortage areas (as des-
ignated under section 332(a)(1)(A) of the 
Public Health Service Act). 
‘‘(iv) MEANINGFUL
EHR
USE.—For 
the performance category described in sub-
paragraph (A)(iv), the requirements estab-
lished for such period under subsection 
(o)(2) for determining whether an eligible 
professional is a meaningful EHR user. 
‘‘(C) ADDITIONAL PROVISIONS.— 
‘‘(i) EMPHASIZING
OUTCOME
MEAS-
URES UNDER THE QUALITY PERFORMANCE 
CATEGORY.—In 
applying 
subparagraph 
(B)(i), the Secretary shall, as feasible, em-
phasize the application of outcome meas-
ures. 
‘‘(ii) APPLICATION
OF
ADDITIONAL 
SYSTEM
MEASURES.—The Secretary may 
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use measures used for a payment system 
other than for physicians, such as meas-
ures for inpatient hospitals, for purposes of 
the performance categories described in 
clauses (i) and (ii) of subparagraph (A). 
For purposes of the previous sentence, the 
Secretary may not use measures for hos-
pital outpatient departments, except in the 
case of emergency physicians. 
‘‘(iii) 
GLOBAL
AND
POPULATION- 
BASED
MEASURES.—The Secretary may 
use global measures, such as global out-
come 
measures, 
and 
population-based 
measures for purposes of the performance 
category described in subparagraph (A)(i). 
‘‘(iv) APPLICATION OF MEASURES AND 
ACTIVITIES TO NON-PATIENT-FACING PRO-
FESSIONALS.—In carrying out this para-
graph, with respect to measures and activi-
ties specified in subparagraph (B) for per-
formance categories described in subpara-
graph (A), the Secretary— 
‘‘(I) shall give consideration to 
the 
circumstances 
of 
professional 
types (or subcategories of those types 
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determined by practice characteris-
tics) who typically furnish services 
that do not involve face-to-face inter-
action with a patient; and 
‘‘(II) may, to the extent feasible 
and appropriate, take into account 
such circumstances and apply under 
this subsection with respect to MIPS 
eligible professionals of such profes-
sional types or subcategories, alter-
native measures or activities that ful-
fill the goals of the applicable per-
formance category. 
In carrying out the previous sentence, the 
Secretary shall consult with professionals 
of such professional types or subcategories. 
‘‘(v) CLINICAL
PRACTICE
IMPROVE-
MENT ACTIVITIES.— 
‘‘(I) REQUEST
FOR
INFORMA-
TION.—In initially applying subpara-
graph (B)(iii), the Secretary shall use 
a request for information to solicit 
recommendations from stakeholders to 
identify activities described in such 
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subparagraph and specifying criteria 
for such activities. 
‘‘(II) CONTRACT AUTHORITY FOR 
CLINICAL
PRACTICE
IMPROVEMENT 
ACTIVITIES
PERFORMANCE
CAT-
EGORY.—In applying subparagraph 
(B)(iii), the Secretary may contract 
with entities to assist the Secretary 
in— 
‘‘(aa) identifying activities 
described 
in 
subparagraph 
(B)(iii); 
‘‘(bb) specifying criteria for 
such activities; and 
‘‘(cc) determining whether a 
MIPS eligible professional meets 
such criteria. 
‘‘(III) CLINICAL
PRACTICE
IM-
PROVEMENT
ACTIVITIES
DEFINED.— 
For purposes of this subsection, the 
term ‘clinical practice improvement 
activity’ means an activity that rel-
evant eligible professional organiza-
tions and other relevant stakeholders 
identify as improving clinical practice 
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or care delivery and that the Sec-
retary determines, when effectively ex-
ecuted, is likely to result in improved 
outcomes. 
‘‘(D) ANNUAL LIST OF QUALITY MEASURES 
AVAILABLE FOR MIPS ASSESSMENT.— 
‘‘(i) IN GENERAL.—Under the MIPS, 
the Secretary, through notice and comment 
rulemaking and subject to the succeeding 
clauses of this subparagraph, shall, with 
respect to the performance period for a 
year, establish an annual final list of qual-
ity measures from which MIPS eligible 
professionals may choose for purposes of 
assessment under this subsection for such 
performance period. Pursuant to the pre-
vious sentence, the Secretary shall— 
‘‘(I) not later than November 1 
of the year prior to the first day of 
the first performance period under the 
MIPS, establish and publish in the 
Federal Register a final list of quality 
measures; and 
‘‘(II) not later than November 1 
of the year prior to the first day of 
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each subsequent performance period, 
update the final list of quality meas-
ures from the previous year (and pub-
lish such updated final list in the Fed-
eral Register), by— 
‘‘(aa) removing from such 
list, as appropriate, quality meas-
ures, which may include the re-
moval of measures that are no 
longer meaningful (such as meas-
ures that are topped out); 
‘‘(bb) adding to such list, as 
appropriate, new quality meas-
ures; and 
‘‘(cc) determining whether 
or not quality measures on such 
list that have undergone sub-
stantive changes should be in-
cluded in the updated list. 
‘‘(ii) 
CALL
FOR
QUALITY
MEAS-
URES.— 
‘‘(I) IN GENERAL.—Eligible pro-
fessional organizations and other rel-
evant stakeholders shall be requested 
to identify and submit quality meas-
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ures to be considered for selection 
under this subparagraph in the an-
nual list of quality measures published 
under clause (i) and to identify and 
submit updates to the measures on 
such list. For purposes of the previous 
sentence, measures may be submitted 
regardless of whether such measures 
were previously published in a pro-
posed rule or endorsed by an entity 
with a contract under section 1890(a). 
‘‘(II) ELIGIBLE
PROFESSIONAL 
ORGANIZATION
DEFINED.—In 
this 
subparagraph, the term ‘eligible pro-
fessional organization’ means a pro-
fessional organization as defined by 
nationally recognized multispecialty 
boards of certification or equivalent 
certification boards. 
‘‘(iii) REQUIREMENTS.—In selecting 
quality measures for inclusion in the an-
nual final list under clause (i), the Sec-
retary shall— 
‘‘(I) provide that, to the extent 
practicable, all quality domains (as 
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defined in subsection (s)(1)(B)) are 
addressed by such measures; and 
‘‘(II) ensure that such selection 
is consistent with the process for se-
lection of measures under subsections 
(k), (m), and (p)(2). 
‘‘(iv) PEER REVIEW.—Before includ-
ing a new measure or a measure described 
in clause (i)(II)(cc) in the final list of 
measures published under clause (i) for a 
year, the Secretary shall submit for publi-
cation in applicable specialty-appropriate 
peer-reviewed journals such measure and 
the method for developing and selecting 
such measure, including clinical and other 
data supporting such measure. 
‘‘(v) MEASURES
FOR
INCLUSION.— 
The final list of quality measures published 
under clause (i) shall include, as applica-
ble, measures under subsections (k), (m), 
and (p)(2), including quality measures 
from among— 
‘‘(I) measures endorsed by a con-
sensus-based entity; 
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‘‘(II) measures developed under 
subsection (s); and 
‘‘(III) measures submitted under 
clause (ii)(I). 
Any measure selected for inclusion in such 
list that is not endorsed by a consensus- 
based entity shall have a focus that is evi-
dence-based. 
‘‘(vi) EXCEPTION
FOR
QUALIFIED 
CLINICAL
DATA
REGISTRY
MEASURES.— 
Measures used by a qualified clinical data 
registry under subsection (m)(3)(E) shall 
not be subject to the requirements under 
clauses (i), (iv), and (v). The Secretary 
shall publish the list of measures used by 
such qualified clinical data registries on 
the Internet website of the Centers for 
Medicare & Medicaid Services. 
‘‘(vii) 
EXCEPTION
FOR
EXISTING 
QUALITY
MEASURES.—Any quality meas-
ure specified by the Secretary under sub-
section (k) or (m), including under sub-
section (m)(3)(E), and any measure of 
quality of care established under sub-
section (p)(2) for the reporting period 
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under the respective subsection beginning 
before the first performance period under 
the MIPS— 
‘‘(I) shall not be subject to the 
requirements under clause (i) (except 
under items (aa) and (cc) of subclause 
(II) of such clause) or to the require-
ment under clause (iv); and 
‘‘(II) shall be included in the 
final list of quality measures pub-
lished under clause (i) unless removed 
under clause (i)(II)(aa). 
‘‘(viii) CONSULTATION
WITH
REL-
EVANT ELIGIBLE PROFESSIONAL ORGANI-
ZATIONS
AND
OTHER
RELEVANT
STAKE-
HOLDERS.—Relevant eligible professional 
organizations and other relevant stake-
holders, including State and national med-
ical societies, shall be consulted in carrying 
out this subparagraph. 
‘‘(ix) OPTIONAL
APPLICATION.—The 
process under section 1890A is not re-
quired to apply to the selection of meas-
ures under this subparagraph. 
‘‘(3) PERFORMANCE STANDARDS.— 
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‘‘(A) ESTABLISHMENT.—Under the MIPS, 
the Secretary shall establish performance stand-
ards with respect to measures and activities 
specified under paragraph (2)(B) for a perform-
ance period (as established under paragraph 
(4)) for a year. 
‘‘(B) CONSIDERATIONS IN ESTABLISHING 
STANDARDS.—In establishing such performance 
standards with respect to measures and activi-
ties specified under paragraph (2)(B), the Sec-
retary shall consider the following: 
‘‘(i) Historical performance standards. 
‘‘(ii) Improvement. 
‘‘(iii) The opportunity for continued 
improvement. 
‘‘(4) PERFORMANCE
PERIOD.—The Secretary 
shall establish a performance period (or periods) for 
a year (beginning with the year described in para-
graph (1)(B)). Such performance period (or periods) 
shall begin and end prior to the beginning of such 
year and be as close as possible to such year. In this 
subsection, such performance period (or periods) for 
a year shall be referred to as the performance period 
for the year. 
‘‘(5) COMPOSITE PERFORMANCE SCORE.— 
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‘‘(A) IN
GENERAL.—Subject to the suc-
ceeding provisions of this paragraph and taking 
into account, as available and applicable, para-
graph (1)(G), the Secretary shall develop a 
methodology for assessing the total performance 
of each MIPS eligible professional according to 
performance standards under paragraph (3) 
with respect to applicable measures and activi-
ties specified in paragraph (2)(B) with respect 
to each performance category applicable to such 
professional for a performance period (as estab-
lished under paragraph (4)) for a year. Using 
such methodology, the Secretary shall provide 
for a composite assessment (using a scoring 
scale of 0 to 100) for each such professional for 
the performance period for such year. In this 
subsection such a composite assessment for 
such a professional with respect to a perform-
ance period shall be referred to as the ‘com-
posite performance score’ for such professional 
for such performance period. 
‘‘(B) INCENTIVE
TO
REPORT; ENCOUR-
AGING USE OF CERTIFIED EHR TECHNOLOGY 
FOR REPORTING QUALITY MEASURES.— 
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‘‘(i) INCENTIVE TO REPORT.—Under 
the methodology established under sub-
paragraph (A), the Secretary shall provide 
that in the case of a MIPS eligible profes-
sional who fails to report on an applicable 
measure or activity that is required to be 
reported by the professional, the profes-
sional shall be treated as achieving the 
lowest potential score applicable to such 
measure or activity. 
‘‘(ii) ENCOURAGING
USE
OF
CER-
TIFIED EHR TECHNOLOGY AND QUALIFIED 
CLINICAL DATA REGISTRIES FOR REPORT-
ING
QUALITY
MEASURES.—Under 
the 
methodology established under subpara-
graph (A), the Secretary shall— 
‘‘(I) encourage MIPS eligible 
professionals to report on applicable 
measures with respect to the perform-
ance category described in paragraph 
(2)(A)(i) through the use of certified 
EHR technology and qualified clinical 
data registries; and 
‘‘(II) with respect to a perform-
ance period, with respect to a year, 
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for which a MIPS eligible professional 
reports such measures through the 
use of such EHR technology, treat 
such professional as satisfying the 
clinical quality measures reporting re-
quirement described in subsection 
(o)(2)(A)(iii) for such year. 
‘‘(C) CLINICAL
PRACTICE
IMPROVEMENT 
ACTIVITIES PERFORMANCE SCORE.— 
‘‘(i) RULE
FOR
ACCREDITATION.—A 
MIPS eligible professional who is in a 
practice that is certified as a patient-cen-
tered medical home or comparable spe-
cialty practice pursuant to subsection 
(b)(8)(B)(i) with respect to a performance 
period shall be given the highest potential 
score for the performance category de-
scribed in paragraph (2)(A)(iii) for such 
period. 
‘‘(ii) APM PARTICIPATION.—Partici-
pation by a MIPS eligible professional in 
an alternative payment model (as defined 
in section 1833(z)(3)(C)) with respect to a 
performance period shall earn such eligible 
professional a minimum score of one-half 
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of the highest potential score for the per-
formance category described in paragraph 
(2)(A)(iii) for such performance period. 
‘‘(iii) SUBCATEGORIES.—A MIPS eli-
gible professional shall not be required to 
perform activities in each subcategory 
under paragraph (2)(B)(iii) or participate 
in an alternative payment model in order 
to achieve the highest potential score for 
the performance category described in 
paragraph (2)(A)(iii). 
‘‘(D) 
ACHIEVEMENT
AND
IMPROVE-
MENT.— 
‘‘(i) TAKING INTO ACCOUNT IMPROVE-
MENT.—Beginning with the second year to 
which the MIPS applies, in addition to the 
achievement of a MIPS eligible profes-
sional, if data sufficient to measure im-
provement is available, the methodology 
developed under subparagraph (A)— 
‘‘(I) in the case of the perform-
ance score for the performance cat-
egory described in clauses (i) and (ii) 
of paragraph (2)(A), shall take into 
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account the improvement of the pro-
fessional; and 
‘‘(II) in the case of performance 
scores for other performance cat-
egories, may take into account the im-
provement of the professional. 
‘‘(ii) ASSIGNING HIGHER WEIGHT FOR 
ACHIEVEMENT.—Beginning 
with 
the 
fourth year to which the MIPS applies, 
under the methodology developed under 
subparagraph (A), the Secretary may as-
sign a higher scoring weight under sub-
paragraph (F) with respect to the achieve-
ment of a MIPS eligible professional than 
with respect to any improvement of such 
professional applied under clause (i) with 
respect to a measure, activity, or category 
described in paragraph (2). 
‘‘(E) WEIGHTS
FOR
THE
PERFORMANCE 
CATEGORIES.— 
‘‘(i) IN GENERAL.—Under the meth-
odology developed under subparagraph (A), 
subject to subparagraph (F)(i) and clauses 
(ii) and (iii), the composite performance 
score shall be determined as follows: 
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‘‘(I) QUALITY.— 
‘‘(aa) IN
GENERAL.—Sub-
ject to item (bb), thirty percent 
of such score shall be based on 
performance with respect to the 
category described in clause (i) of 
paragraph (2)(A). In applying 
the previous sentence, the Sec-
retary shall, as feasible, encour-
age the application of outcome 
measures within such category. 
‘‘(bb) FIRST 2 YEARS.—For 
the first and second years for 
which the MIPS applies to pay-
ments, the percentage applicable 
under item (aa) shall be in-
creased in a manner such that 
the total percentage points of the 
increase under this item for the 
respective year equals the total 
number of percentage points by 
which the percentage applied 
under subclause (II)(bb) for the 
respective year is less than 30 
percent. 
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‘‘(II) RESOURCE USE.— 
‘‘(aa) IN
GENERAL.—Sub-
ject to item (bb), thirty percent 
of such score shall be based on 
performance with respect to the 
category described in clause (ii) 
of paragraph (2)(A). 
‘‘(bb) FIRST 2 YEARS.—For 
the first year for which the MIPS 
applies to payments, not more 
than 10 percent of such score 
shall be based on performance 
with respect to the category de-
scribed in clause (ii) of para-
graph (2)(A). For the second 
year for which the MIPS applies 
to payments, not more than 15 
percent of such score shall be 
based on performance with re-
spect to the category described in 
clause (ii) of paragraph (2)(A). 
‘‘(III) CLINICAL
PRACTICE
IM-
PROVEMENT
ACTIVITIES.—Fifteen 
percent of such score shall be based 
on performance with respect to the 
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category described in clause (iii) of 
paragraph (2)(A). 
‘‘(IV) MEANINGFUL USE OF CER-
TIFIED
EHR
TECHNOLOGY.—Twenty- 
five percent of such score shall be 
based on performance with respect to 
the category described in clause (iv) of 
paragraph (2)(A). 
‘‘(ii) AUTHORITY
TO
ADJUST
PER-
CENTAGES IN CASE OF HIGH EHR MEAN-
INGFUL USE ADOPTION.—In any year in 
which the Secretary estimates that the pro-
portion of eligible professionals (as defined 
in subsection (o)(5)) who are meaningful 
EHR users (as determined under sub-
section (o)(2)) is 75 percent or greater, the 
Secretary may reduce the percent applica-
ble under clause (i)(IV), but not below 15 
percent. If the Secretary makes such re-
duction for a year, subject to subclauses 
(I)(bb) and (II)(bb) of clause (i), the per-
centages applicable under one or more of 
subclauses (I), (II), and (III) of clause (i) 
for such year shall be increased in a man-
ner such that the total percentage points 
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of the increase under this clause for such 
year equals the total number of percentage 
points reduced under the preceding sen-
tence for such year. 
‘‘(F) 
CERTAIN
FLEXIBILITY
FOR 
WEIGHTING PERFORMANCE CATEGORIES, MEAS-
URES, AND
ACTIVITIES.—Under the method-
ology under subparagraph (A), if there are not 
sufficient measures and clinical practice im-
provement activities applicable and available to 
each type of eligible professional involved, the 
Secretary shall assign different scoring weights 
(including a weight of 0)— 
‘‘(i) which may vary from the scoring 
weights specified in subparagraph (E), for 
each performance category based on the 
extent to which the category is applicable 
to the type of eligible professional involved; 
and 
‘‘(ii) for each measure and activity 
specified under paragraph (2)(B) with re-
spect to each such category based on the 
extent to which the measure or activity is 
applicable and available to the type of eli-
gible professional involved. 
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‘‘(G) RESOURCE
USE.—Analysis of the 
performance category described in paragraph 
(2)(A)(ii) shall include results from the method-
ology described in subsection (r)(5), as appro-
priate. 
‘‘(H) INCLUSION
OF
QUALITY
MEASURE 
DATA FROM OTHER PAYERS.—In applying sub-
sections (k), (m), and (p) with respect to meas-
ures described in paragraph (2)(B)(i), analysis 
of the performance category described in para-
graph (2)(A)(i) may include data submitted by 
MIPS eligible professionals with respect to 
items and services furnished to individuals who 
are not individuals entitled to benefits under 
part A or enrolled under part B. 
‘‘(I) USE OF VOLUNTARY VIRTUAL GROUPS 
FOR CERTAIN ASSESSMENT PURPOSES.— 
‘‘(i) IN
GENERAL.—In the case of 
MIPS eligible professionals electing to be a 
virtual group under clause (ii) with respect 
to a performance period for a year, for 
purposes of applying the methodology 
under subparagraph (A)— 
‘‘(I) the assessment of perform-
ance provided under such methodology 
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with respect to the performance cat-
egories described in clauses (i) and 
(ii) of paragraph (2)(A) that is to be 
applied to each such professional in 
such group for such performance pe-
riod shall be with respect to the com-
bined performance of all such profes-
sionals in such group for such period; 
and 
‘‘(II) the composite score pro-
vided under this paragraph for such 
performance period with respect to 
each such performance category for 
each such MIPS eligible professional 
in such virtual group shall be based 
on the assessment of the combined 
performance under subclause (I) for 
the performance category and per-
formance period. 
‘‘(ii) ELECTION OF PRACTICES TO BE 
A VIRTUAL GROUP.—The Secretary shall, 
in accordance with clause (iii), establish 
and have in place a process to allow an in-
dividual MIPS eligible professional or a 
group practice consisting of not more than 
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10 MIPS eligible professionals to elect, 
with respect to a performance period for a 
year, for such individual MIPS eligible pro-
fessional or all such MIPS eligible profes-
sionals in such group practice, respectively, 
to be a virtual group under this subpara-
graph with at least one other such indi-
vidual MIPS eligible professional or group 
practice making such an election. Such a 
virtual group may be based on geographic 
areas or on provider specialties defined by 
nationally recognized multispecialty boards 
of certification or equivalent certification 
boards and such other eligible professional 
groupings in order to capture classifica-
tions of providers across eligible profes-
sional organizations and other practice 
areas or categories. 
‘‘(iii) REQUIREMENTS.—The process 
under clause (ii)— 
‘‘(I) shall provide that an election 
under such clause, with respect to a 
performance period, shall be made be-
fore or during the beginning of such 
performance period and may not be 
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changed during such performance pe-
riod; 
‘‘(II) shall provide that a practice 
described in such clause, and each 
MIPS eligible professional in such 
practice, may elect to be in no more 
than one virtual group for a perform-
ance period; and 
‘‘(III) may provide that a virtual 
group may be combined at the tax 
identification number level. 
‘‘(6) MIPS PAYMENTS.— 
‘‘(A) MIPS ADJUSTMENT FACTOR.—Tak-
ing into account paragraph (1)(G), the Sec-
retary shall specify a MIPS adjustment factor 
for each MIPS eligible professional for a year. 
Such MIPS adjustment factor for a MIPS eligi-
ble professional for a year shall be in the form 
of a percent and shall be determined— 
‘‘(i) by comparing the composite per-
formance score of the eligible professional 
for such year to the performance threshold 
established under subparagraph (D)(i) for 
such year; 
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‘‘(ii) in a manner such that the ad-
justment factors specified under this sub-
paragraph for a year result in differential 
payments under this paragraph reflecting 
that— 
‘‘(I) MIPS eligible professionals 
with composite performance scores for 
such year at or above such perform-
ance threshold for such year receive 
zero or positive incentive payment ad-
justment factors for such year in ac-
cordance with clause (iii), with such 
professionals having higher composite 
performance scores receiving higher 
adjustment factors; and 
‘‘(II) MIPS eligible professionals 
with composite performance scores for 
such year below such performance 
threshold for such year receive nega-
tive payment adjustment factors for 
such year in accordance with clause 
(iv), with such professionals having 
lower composite performance scores 
receiving lower adjustment factors; 
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‘‘(iii) in a manner such that MIPS eli-
gible professionals with composite scores 
described in clause (ii)(I) for such year, 
subject to clauses (i) and (ii) of subpara-
graph (F), receive a zero or positive ad-
justment factor on a linear sliding scale 
such that an adjustment factor of 0 per-
cent is assigned for a score at the perform-
ance threshold and an adjustment factor of 
the applicable percent specified in subpara-
graph (B) is assigned for a score of 100; 
and 
‘‘(iv) in a manner such that— 
‘‘(I) subject to subclause (II), 
MIPS eligible professionals with com-
posite performance scores described in 
clause (ii)(II) for such year receive a 
negative payment adjustment factor 
on a linear sliding scale such that an 
adjustment factor of 0 percent is as-
signed for a score at the performance 
threshold and an adjustment factor of 
the negative of the applicable percent 
specified in subparagraph (B) is as-
signed for a score of 0; and 
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‘‘(II) MIPS eligible professionals 
with composite performance scores 
that are equal to or greater than 0, 
but not greater than 1⁄4 of the per-
formance threshold specified under 
subparagraph (D)(i) for such year, re-
ceive a negative payment adjustment 
factor that is equal to the negative of 
the applicable percent specified in 
subparagraph (B) for such year. 
‘‘(B) APPLICABLE
PERCENT
DEFINED.— 
For purposes of this paragraph, the term ‘ap-
plicable percent’ means— 
‘‘(i) for 2018, 4 percent; 
‘‘(ii) for 2019, 5 percent; 
‘‘(iii) for 2020, 7 percent; and 
‘‘(iv) for 2021 and subsequent years, 
9 percent. 
‘‘(C) ADDITIONAL MIPS ADJUSTMENT FAC-
TORS FOR EXCEPTIONAL PERFORMANCE.— 
‘‘(i) IN GENERAL.—In the case of a 
MIPS eligible professional with a com-
posite performance score for a year at or 
above the additional performance threshold 
under subparagraph (D)(ii) for such year, 
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in addition to the MIPS adjustment factor 
under subparagraph (A) for the eligible 
professional for such year, subject to the 
availability of funds under clause (ii), the 
Secretary shall specify an additional posi-
tive MIPS adjustment factor for such pro-
fessional and year. Such additional MIPS 
adjustment factors shall be determined by 
the Secretary in a manner such that pro-
fessionals having higher composite per-
formance scores above the additional per-
formance threshold receive higher addi-
tional MIPS adjustment factors. 
‘‘(ii) ADDITIONAL FUNDING POOL.— 
For 2018 and each subsequent year 
through 2023, there is appropriated from 
the Federal Supplementary Medical Insur-
ance Trust Fund $500,000,000 for MIPS 
payments under this paragraph resulting 
from the application of the additional 
MIPS adjustment factors under clause (i). 
‘‘(D) ESTABLISHMENT OF PERFORMANCE 
THRESHOLDS.— 
‘‘(i) PERFORMANCE
THRESHOLD.— 
For each year of the MIPS, the Secretary 
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shall compute a performance threshold 
with respect to which the composite per-
formance score of MIPS eligible profes-
sionals shall be compared for purposes of 
determining adjustment factors under sub-
paragraph (A) that are positive, negative, 
and zero. Such performance threshold for 
a year shall be the mean or median (as se-
lected by the Secretary) of the composite 
performance scores for all MIPS eligible 
professionals with respect to a prior period 
specified by the Secretary. The Secretary 
may reassess the selection under the pre-
vious sentence every 3 years. 
‘‘(ii) 
ADDITIONAL
PERFORMANCE 
THRESHOLD FOR EXCEPTIONAL PERFORM-
ANCE.—In addition to the performance 
threshold under clause (i), for each year of 
the MIPS, the Secretary shall compute an 
additional performance threshold for pur-
poses of determining the additional MIPS 
adjustment factors under subparagraph 
(C)(i). For each such year, the Secretary 
shall apply either of the following methods 
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for computing such additional performance 
threshold for such a year: 
‘‘(I) The threshold shall be the 
score that is equal to the 25th per-
centile of the range of possible com-
posite performance scores above the 
performance threshold with respect to 
the prior period described in clause 
(i). 
‘‘(II) The threshold shall be the 
score that is equal to the 25th per-
centile of the actual composite per-
formance scores for MIPS eligible 
professionals with composite perform-
ance scores at or above the perform-
ance threshold with respect to the 
prior period described in clause (i). 
‘‘(iii) SPECIAL RULE FOR INITIAL 2 
YEARS.—With respect to each of the first 
two years to which the MIPS applies, the 
Secretary shall, prior to the performance 
period for such years, establish a perform-
ance threshold for purposes of determining 
MIPS adjustment factors under subpara-
graph (A) and a threshold for purposes of 
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determining additional MIPS adjustment 
factors under subparagraph (C)(i). Each 
such performance threshold shall— 
‘‘(I) be based on a period prior to 
such performance periods; and 
‘‘(II) take into account— 
‘‘(aa) data available with re-
spect to performance on meas-
ures and activities that may be 
used under the performance cat-
egories 
under 
subparagraph 
(2)(B); and 
‘‘(bb) other factors deter-
mined appropriate by the Sec-
retary. 
‘‘(E) APPLICATION OF MIPS ADJUSTMENT 
FACTORS.—In the case of items and services 
furnished by a MIPS eligible professional dur-
ing a year (beginning with 2018), the amount 
otherwise paid under this part with respect to 
such items and services and MIPS eligible pro-
fessional for such year, shall be multiplied by— 
‘‘(i) 1, plus 
‘‘(ii) the sum of— 
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‘‘(I) the MIPS adjustment factor 
determined under subparagraph (A) 
divided by 100, and 
‘‘(II) as applicable, the additional 
MIPS adjustment factor determined 
under subparagraph (C)(i) divided by 
100. 
‘‘(F) AGGREGATE
APPLICATION
OF
MIPS 
ADJUSTMENT FACTORS.— 
‘‘(i) APPLICATION OF SCALING FAC-
TOR.— 
‘‘(I) IN GENERAL.—With respect 
to positive MIPS adjustment factors 
under subparagraph (A)(ii)(I) for eli-
gible professionals whose composite 
performance score is above the per-
formance threshold under subpara-
graph (D)(i) for such year, subject to 
subclause (II), the Secretary shall in-
crease or decrease such adjustment 
factors by a scaling factor in order to 
ensure that the budget neutrality re-
quirement of clause (ii) is met. 
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‘‘(II) SCALING FACTOR LIMIT.— 
In no case may be the scaling factor 
applied under this clause exceed 3.0. 
‘‘(ii) BUDGET NEUTRALITY REQUIRE-
MENT.— 
‘‘(I) IN
GENERAL.—Subject to 
clause (iii), the Secretary shall ensure 
that the estimated amount described 
in subclause (II) for a year is equal to 
the estimated amount described in 
subclause (III) for such year. 
‘‘(II) AGGREGATE INCREASES.— 
The amount described in this sub-
clause is the estimated increase in the 
aggregate allowed charges resulting 
from the application of positive MIPS 
adjustment factors under subpara-
graph (A) (after application of the 
scaling factor described in clause (i)) 
to MIPS eligible professionals whose 
composite performance score for a 
year is above the performance thresh-
old under subparagraph (D)(i) for 
such year. 
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‘‘(III) 
AGGREGATE
DE-
CREASES.—The amount described in 
this subclause is the estimated de-
crease 
in 
the 
aggregate 
allowed 
charges resulting from the application 
of negative MIPS adjustment factors 
under subparagraph (A) to MIPS eli-
gible professionals whose composite 
performance score for a year is below 
the performance threshold under sub-
paragraph (D)(i) for such year. 
‘‘(iii) EXCEPTIONS.— 
‘‘(I) In the case that all MIPS el-
igible professionals receive composite 
performance scores for a year that are 
below 
the 
performance 
threshold 
under subparagraph (D)(i) for such 
year, the negative MIPS adjustment 
factors under subparagraph (A) shall 
apply with respect to such MIPS eligi-
ble professionals and the budget neu-
trality requirement of clause (ii) shall 
not apply for such year. 
‘‘(II) In the case that, with re-
spect to a year, the application of 
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clause (i) results in a scaling factor 
equal to the maximum scaling factor 
specified in clause (i)(II), such scaling 
factor shall apply and the budget neu-
trality requirement of clause (ii) shall 
not apply for such year. 
‘‘(iv) ADDITIONAL
INCENTIVE
PAY-
MENT
ADJUSTMENTS.—In specifying the 
MIPS additional adjustment factors under 
subparagraph (C)(i) for each applicable 
MIPS eligible professional for a year, the 
Secretary shall ensure that the estimated 
increase in payments under this part re-
sulting from the application of such addi-
tional adjustment factors for MIPS eligible 
professionals in a year shall be equal (as 
estimated by the Secretary) to the addi-
tional funding pool amount for such year 
under subparagraph (C)(ii). 
‘‘(7) ANNOUNCEMENT OF RESULT OF ADJUST-
MENTS.—Under the MIPS, the Secretary shall, not 
later than 30 days prior to January 1 of the year 
involved, make available to MIPS eligible profes-
sionals the MIPS adjustment factor (and, as appli-
cable, the additional MIPS adjustment factor) under 
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paragraph (6) applicable to the eligible professional 
for items and services furnished by the professional 
for such year. The Secretary may include such infor-
mation in the confidential feedback under paragraph 
(12). 
‘‘(8) NO EFFECT IN SUBSEQUENT YEARS.—The 
MIPS adjustment factors and additional MIPS ad-
justment factors under paragraph (6) shall apply 
only with respect to the year involved, and the Sec-
retary shall not take into account such adjustment 
factors in making payments to a MIPS eligible pro-
fessional under this part in a subsequent year. 
‘‘(9) PUBLIC REPORTING.— 
‘‘(A) IN GENERAL.—The Secretary shall, 
in an easily understandable format, make avail-
able on the Physician Compare Internet website 
of the Centers for Medicare & Medicaid Serv-
ices the following: 
‘‘(i) Information regarding the per-
formance of MIPS eligible professionals 
under the MIPS, which— 
‘‘(I) shall include the composite 
score for each such MIPS eligible pro-
fessional and the performance of each 
such MIPS eligible professional with 
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respect to each performance category; 
and 
‘‘(II) may include the perform-
ance of each such MIPS eligible pro-
fessional with respect to each measure 
or activity specified in paragraph 
(2)(B). 
‘‘(ii) The names of eligible profes-
sionals in eligible alternative payment mod-
els (as defined in section 1833(z)(3)(D)) 
and, to the extent feasible, the names of 
such eligible alternative payment models 
and performance of such models. 
‘‘(B) 
DISCLOSURE.—The 
information 
made available under this paragraph shall indi-
cate, where appropriate, that publicized infor-
mation may not be representative of the eligible 
professional’s entire patient population, the va-
riety of services furnished by the eligible profes-
sional, or the health conditions of individuals 
treated. 
‘‘(C) OPPORTUNITY TO REVIEW AND SUB-
MIT
CORRECTIONS.—The Secretary shall pro-
vide for an opportunity for a professional de-
scribed in subparagraph (A) to review, and sub-
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mit corrections for, the information to be made 
public with respect to the professional under 
such subparagraph prior to such information 
being made public. 
‘‘(D) 
AGGREGATE
INFORMATION.—The 
Secretary shall periodically post on the Physi-
cian Compare Internet website aggregate infor-
mation on the MIPS, including the range of 
composite scores for all MIPS eligible profes-
sionals and the range of the performance of all 
MIPS eligible professionals with respect to each 
performance category. 
‘‘(10) CONSULTATION.—The Secretary shall 
consult with stakeholders in carrying out the MIPS, 
including for the identification of measures and ac-
tivities under paragraph (2)(B) and the methodolo-
gies developed under paragraphs (5)(A) and (6) and 
regarding the use of qualified clinical data registries. 
Such consultation shall include the use of a request 
for information or other mechanisms determined ap-
propriate. 
‘‘(11) TECHNICAL ASSISTANCE TO SMALL PRAC-
TICES AND PRACTICES IN HEALTH PROFESSIONAL 
SHORTAGE AREAS.— 
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‘‘(A) IN
GENERAL.—The Secretary shall 
enter into contracts or agreements with appro-
priate entities (such as quality improvement or-
ganizations, regional extension centers (as de-
scribed in section 3012(c) of the Public Health 
Service Act), or regional health collaboratives) 
to offer guidance and assistance to MIPS eligi-
ble professionals in practices of 15 or fewer pro-
fessionals (with priority given to such practices 
located in rural areas, health professional short-
age areas (as designated under in section 
332(a)(1)(A) of such Act), and medically under-
served areas, and practices with low composite 
scores) with respect to— 
‘‘(i) the performance categories de-
scribed in clauses (i) through (iv) of para-
graph (2)(A); or 
‘‘(ii) how to transition to the imple-
mentation of and participation in an alter-
native payment model as described in sec-
tion 1833(z)(3)(C). 
‘‘(B) FUNDING FOR IMPLEMENTATION.— 
‘‘(i) IN
GENERAL.—For purposes of 
implementing subparagraph (A), the Sec-
retary shall provide for the transfer from 
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the Federal Supplementary Medical Insur-
ance Trust Fund established under section 
1841 to the Centers for Medicare & Med-
icaid Services Program Management Ac-
count of $40,000,000 for each of fiscal 
years 2015 through 2019. Amounts trans-
ferred under this subparagraph for a fiscal 
year shall be available until expended. 
‘‘(ii) 
TECHNICAL
ASSISTANCE.—Of 
the amounts transferred pursuant to clause 
(i) for each of fiscal years 2015 through 
2019, not less than $10,000,000 shall be 
made available for each such year for tech-
nical assistance to small practices in health 
professional shortage areas (as so des-
ignated) and medically underserved areas. 
‘‘(12) FEEDBACK
AND
INFORMATION
TO
IM-
PROVE PERFORMANCE.— 
‘‘(A) PERFORMANCE FEEDBACK.— 
‘‘(i) IN GENERAL.—Beginning July 1, 
2016, the Secretary— 
‘‘(I) shall make available timely 
(such as quarterly) confidential feed-
back to MIPS eligible professionals on 
the performance of such professionals 
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with respect to the performance cat-
egories under clauses (i) and (ii) of 
paragraph (2)(A); and 
‘‘(II) may make available con-
fidential feedback to each such profes-
sional on the performance of such 
professional with respect to the per-
formance categories under clauses (iii) 
and (iv) of such paragraph. 
‘‘(ii) MECHANISMS.—The Secretary 
may use one or more mechanisms to make 
feedback available under clause (i), which 
may include use of a web-based portal or 
other mechanisms determined appropriate 
by the Secretary. With respect to the per-
formance category described in paragraph 
(2)(A)(i), feedback under this subpara-
graph shall, to the extent an eligible pro-
fessional chooses to participate in a data 
registry for purposes of this subsection (in-
cluding registries under subsections (k) 
and (m)), be provided based on perform-
ance on quality measures reported through 
the use of such registries. With respect to 
any other performance category described 
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in paragraph (2)(A), the Secretary shall 
encourage provision of feedback through 
qualified clinical data registries as de-
scribed in subsection (m)(3)(E). 
‘‘(iii) USE OF DATA.—For purposes of 
clause (i), the Secretary may use data, 
with respect to a MIPS eligible profes-
sional, from periods prior to the current 
performance period and may use rolling 
periods in order to make illustrative cal-
culations about the performance of such 
professional. 
‘‘(iv) 
DISCLOSURE
EXEMPTION.— 
Feedback made available under this sub-
paragraph shall be exempt from disclosure 
under section 552 of title 5, United States 
Code. 
‘‘(v) RECEIPT
OF
INFORMATION.— 
The Secretary may use the mechanisms es-
tablished under clause (ii) to receive infor-
mation from professionals, such as infor-
mation with respect to this subsection. 
‘‘(B) ADDITIONAL INFORMATION.— 
‘‘(i) IN GENERAL.—Beginning July 1, 
2017, the Secretary shall make available to 
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each MIPS eligible professional informa-
tion, with respect to individuals who are 
patients of such MIPS eligible professional, 
about items and services for which pay-
ment is made under this title that are fur-
nished to such individuals by other sup-
pliers and providers of services, which may 
include information described in clause (ii). 
Such information may be made available 
under the previous sentence to such MIPS 
eligible professionals by mechanisms deter-
mined appropriate by the Secretary, which 
may include use of a web-based portal. 
Such information may be made available in 
accordance with the same or similar terms 
as data are made available to accountable 
care organizations participating in the 
shared savings program under section 
1899, including a beneficiary opt-out. 
‘‘(ii) TYPE
OF
INFORMATION.—For 
purposes of clause (i), the information de-
scribed in this clause, is the following: 
‘‘(I) With respect to selected 
items and services (as determined ap-
propriate by the Secretary) for which 
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payment is made under this title and 
that are furnished to individuals, who 
are patients of a MIPS eligible profes-
sional, by another supplier or provider 
of services during the most recent pe-
riod for which data are available (such 
as the most recent three-month pe-
riod), such as the name of such pro-
viders furnishing such items and serv-
ices to such patients during such pe-
riod, the types of such items and serv-
ices so furnished, and the dates such 
items and services were so furnished. 
‘‘(II) Historical data, such as 
averages and other measures of the 
distribution if appropriate, of the 
total, and components of, allowed 
charges (and other figures as deter-
mined appropriate by the Secretary). 
‘‘(13) REVIEW.— 
‘‘(A) TARGETED REVIEW.—The Secretary 
shall establish a process under which a MIPS 
eligible professional may seek an informal re-
view of the calculation of the MIPS adjustment 
factor applicable to such eligible professional 
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under this subsection for a year. The results of 
a review conducted pursuant to the previous 
sentence shall not be taken into account for 
purposes of paragraph (6) with respect to a 
year (other than with respect to the calculation 
of such eligible professional’s MIPS adjustment 
factor for such year or additional MIPS adjust-
ment factor for such year) after the factors de-
termined in subparagraph (A) and subpara-
graph (C) of such paragraph have been deter-
mined for such year. 
‘‘(B) LIMITATION.—Except as provided for 
in subparagraph (A), there shall be no adminis-
trative or judicial review under section 1869, 
section 1878, or otherwise of the following: 
‘‘(i) The methodology used to deter-
mine the amount of the MIPS adjustment 
factor under paragraph (6)(A) and the 
amount of the additional MIPS adjustment 
factor under paragraph (6)(C)(i) and the 
determination of such amounts. 
‘‘(ii) The establishment of the per-
formance standards under paragraph (3) 
and the performance period under para-
graph (4). 
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‘‘(iii) The identification of measures 
and activities specified under paragraph 
(2)(B) and information made public or 
posted on the Physician Compare Internet 
website of the Centers for Medicare & 
Medicaid Services under paragraph (9). 
‘‘(iv) 
The 
methodology 
developed 
under paragraph (5) that is used to cal-
culate performance scores and the calcula-
tion of such scores, including the weighting 
of measures and activities under such 
methodology.’’. 
(2) GAO REPORTS.— 
(A) EVALUATION
OF
ELIGIBLE
PROFES-
SIONAL MIPS.—Not later than October 1, 2019, 
and October 1, 2022, the Comptroller General 
of the United States shall submit to Congress 
a report evaluating the eligible professional 
Merit-based Incentive Payment System under 
subsection (q) of section 1848 of the Social Se-
curity Act (42 U.S.C. 1395w–4), as added by 
paragraph (1). Such report shall— 
(i) examine the distribution of the 
composite performance scores and MIPS 
adjustment factors (and additional MIPS 
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adjustment factors) for MIPS eligible pro-
fessionals 
(as 
defined 
in 
subsection 
(q)(1)(c) of such section) under such pro-
gram, and patterns relating to such scores 
and adjustment factors, including based on 
type of provider, practice size, geographic 
location, and patient mix; 
(ii) provide recommendations for im-
proving such program; 
(iii) evaluate the impact of technical 
assistance 
funding 
under 
section 
1848(q)(11) of the Social Security Act, as 
added by paragraph (1), on the ability of 
professionals to improve within such pro-
gram or successfully transition to an alter-
native payment model (as defined in sec-
tion 1833(z)(3) of the Social Security Act, 
as added by subsection (e)), with priority 
for such evaluation given to practices lo-
cated in rural areas, health professional 
shortage areas (as designated in section 
332(a)(1)(a) of the Public Health Service 
Act), and medically underserved areas; and 
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(iv) provide recommendations for opti-
mizing the use of such technical assistance 
funds. 
(B) STUDY TO EXAMINE ALIGNMENT OF 
QUALITY MEASURES USED IN PUBLIC AND PRI-
VATE PROGRAMS.— 
(i) IN GENERAL.—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— 
(I) compares the similarities and 
differences in the use of quality meas-
ures under the original Medicare fee- 
for-service program under parts A and 
B of title XVIII of the Social Security 
Act, the Medicare Advantage program 
under part C of such title, selected 
State Medicaid programs under title 
XIX of such Act, and private payer 
arrangements; and 
(II) makes recommendations on 
how to reduce the administrative bur-
den involved in applying such quality 
measures. 
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(ii) 
REQUIREMENTS.—The 
report 
under clause (i) shall— 
(I) consider those measures ap-
plicable to individuals entitled to, or 
enrolled for, benefits under such part 
A, or enrolled under such part B and 
individuals under the age of 65; and 
(II) focus on those measures that 
comprise the most significant compo-
nent of the quality performance cat-
egory of the eligible professional 
MIPS incentive program under sub-
section (q) of section 1848 of the So-
cial Security Act (42 U.S.C. 1395w– 
4), as added by paragraph (1). 
(C) STUDY
ON
ROLE
OF
INDEPENDENT 
RISK MANAGERS.—Not later than January 1, 
2016, the Comptroller General of the United 
States shall submit to Congress a report exam-
ining whether entities that pool financial risk 
for physician practices, such as independent 
risk managers, can play a role in supporting 
physician practices, particularly small physician 
practices, in assuming financial risk for the 
treatment of patients. Such report shall exam-
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ine barriers that small physician practices cur-
rently face in assuming financial risk for treat-
ing patients, the types of risk management enti-
ties that could assist physician practices in par-
ticipating in two-sided risk payment models, 
and how such entities could assist with risk 
management and with quality improvement ac-
tivities. Such report shall also include an anal-
ysis of any existing legal barriers to such ar-
rangements. 
(D) STUDY
TO
EXAMINE
RURAL
AND 
HEALTH
PROFESSIONAL
SHORTAGE
AREA
AL-
TERNATIVE PAYMENT MODELS.—Not later than 
October 1, 2020, and October 1, 2022, the 
Comptroller General of the United States shall 
submit to Congress a report that examines the 
transition of professionals in rural areas, health 
professional shortage areas (as designated in 
section 332(a)(1)(A) of the Public Health Serv-
ice Act), or medically underserved areas to an 
alternative payment model (as defined in sec-
tion 1833(z)(3) of the Social Security Act, as 
added by subsection (e)). Such report shall 
make recommendations for removing adminis-
trative barriers to practices, including small 
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practices consisting of 15 or fewer profes-
sionals, in rural areas, health professional 
shortage areas, and medically underserved areas 
to participation in such models. 
(3) FUNDING
FOR
IMPLEMENTATION.—For 
purposes of implementing the provisions of and the 
amendments made by this section, the Secretary of 
Health and Human Services shall provide for the 
transfer of $80,000,000 from the Supplementary 
Medical Insurance Trust Fund established under 
section 1841 of the Social Security Act (42 U.S.C. 
1395t) to the Centers for Medicare & Medicaid Pro-
gram Management Account for each of the fiscal 
years 2014 through 2018. Amounts transferred 
under this paragraph shall be available until ex-
pended. 
(d) IMPROVING QUALITY REPORTING
FOR COM-
POSITE SCORES.— 
(1) CHANGES
FOR
GROUP
REPORTING
OP-
TION.— 
(A) 
IN
GENERAL.—Section 
1848(m)(3)(C)(ii) of the Social Security Act 
(42 U.S.C. 1395w–4(m)(3)(C)(ii)) is amended 
by inserting ‘‘and, for 2015 and subsequent 
years, may provide’’ after ‘‘shall provide’’. 
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(B) CLARIFICATION OF QUALIFIED CLIN-
ICAL
DATA
REGISTRY
REPORTING
TO
GROUP 
PRACTICES.—Section 1848(m)(3)(D) of the So-
cial 
Security 
Act 
(42 
U.S.C. 
1395w– 
4(m)(3)(D)) is amended by inserting ‘‘and, for 
2015 and subsequent years, subparagraph (A) 
or (C)’’ after ‘‘subparagraph (A)’’. 
(2) CHANGES FOR MULTIPLE REPORTING PERI-
ODS
AND
ALTERNATIVE
CRITERIA
FOR
SATISFAC-
TORY
REPORTING.—Section 1848(m)(5)(F) of the 
Social Security Act (42 U.S.C. 1395w–4(m)(5)(F)) 
is amended— 
(A) by striking ‘‘and subsequent years’’ 
and inserting ‘‘through reporting periods occur-
ring in 2014’’; and 
(B) by inserting ‘‘and, for reporting peri-
ods occurring in 2015 and subsequent years, 
the Secretary may establish’’ following ‘‘shall 
establish’’. 
(3) PHYSICIAN FEEDBACK PROGRAM REPORTS 
SUCCEEDED
BY
REPORTS
UNDER
MIPS.—Section 
1848(n) of the Social Security Act (42 U.S.C. 
1395w–4(n)) is amended by adding at the end the 
following new paragraph: 
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‘‘(11) REPORTS ENDING WITH 2016.—Reports 
under the Program shall not be provided after De-
cember 31, 2016. See subsection (q)(12) for reports 
under the eligible professionals Merit-based Incentive 
Payment System.’’. 
(4) COORDINATION WITH SATISFYING MEANING-
FUL EHR USE CLINICAL QUALITY MEASURE REPORT-
ING
REQUIREMENT.—Section 1848(o)(2)(A)(iii) of 
the Social Security Act (42 U.S.C. 1395w– 
4(o)(2)(A)(iii)) is amended by inserting ‘‘and sub-
section (q)(5)(B)(ii)(II)’’ after ‘‘Subject to subpara-
graph (B)(ii)’’. 
(e) PROMOTING ALTERNATIVE PAYMENT MODELS.— 
(1) INCREASING TRANSPARENCY OF PHYSICIAN 
FOCUSED PAYMENT MODELS.—Section 1868 of the 
Social Security Act (42 U.S.C. 1395ee) is amended 
by adding at the end the following new subsection: 
‘‘(c) PHYSICIAN FOCUSED PAYMENT MODELS.— 
‘‘(1) TECHNICAL ADVISORY COMMITTEE.— 
‘‘(A) ESTABLISHMENT.—There is estab-
lished an ad hoc committee to be known as the 
‘Payment Model Technical Advisory Committee’ 
(referred to in this subsection as the ‘Com-
mittee’). 
‘‘(B) MEMBERSHIP.— 
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‘‘(i) NUMBER
AND
APPOINTMENT.— 
The Committee shall be composed of 11 
members appointed by the Comptroller 
General of the United States. 
‘‘(ii) QUALIFICATIONS.—The member-
ship of the Committee shall include indi-
viduals with national recognition for their 
expertise in payment models and related 
delivery of care. No more than 5 members 
of the Committee shall be providers of 
services or suppliers, or representatives of 
providers of services or suppliers. 
‘‘(iii) PROHIBITION ON FEDERAL EM-
PLOYMENT.—A member of the Committee 
shall not be an employee of the Federal 
Government. 
‘‘(iv) 
ETHICS
DISCLOSURE.—The 
Comptroller General shall establish a sys-
tem for public disclosure by members of 
the Committee of financial and other po-
tential conflicts of interest relating to such 
members. Members of the Committee shall 
be treated as employees of Congress for 
purposes of applying title I of the Ethics 
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in Government Act of 1978 (Public Law 
95–521). 
‘‘(v) DATE
OF
INITIAL
APPOINT-
MENTS.—The initial appointments of mem-
bers of the Committee shall be made by 
not later than 180 days after the date of 
enactment of this subsection. 
‘‘(C) TERM; VACANCIES.— 
‘‘(i) TERM.—The terms of members of 
the Committee shall be for 3 years except 
that the Comptroller General shall des-
ignate staggered terms for the members 
first appointed. 
‘‘(ii) VACANCIES.—Any member ap-
pointed to fill a vacancy occurring before 
the expiration of the term for which the 
member’s predecessor was appointed shall 
be appointed only for the remainder of that 
term. A member may serve after the expi-
ration of that member’s term until a suc-
cessor has taken office. A vacancy in the 
Committee shall be filled in the manner in 
which the original appointment was made. 
‘‘(D) DUTIES.—The Committee shall meet, 
as needed, to provide comments and rec-
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ommendations to the Secretary, as described in 
paragraph (2)(C), on physician-focused pay-
ment models. 
‘‘(E) COMPENSATION OF MEMBERS.— 
‘‘(i) IN
GENERAL.—Except as pro-
vided in clause (ii), a member of the Com-
mittee shall serve without compensation. 
‘‘(ii) TRAVEL EXPENSES.—A member 
of the Committee shall be allowed travel 
expenses, including per diem in lieu of sub-
sistence, at rates authorized for an em-
ployee of an agency under subchapter I of 
chapter 57 of title 5, United States Code, 
while away from the home or regular place 
of business of the member in the perform-
ance of the duties of the Committee. 
‘‘(F) OPERATIONAL AND TECHNICAL SUP-
PORT.— 
‘‘(i) IN
GENERAL.—The Assistant 
Secretary for Planning and Evaluation 
shall provide technical and operational sup-
port for the Committee, which may be by 
use of a contractor. The Office of the Ac-
tuary of the Centers for Medicare & Med-
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icaid Services shall provide to the Com-
mittee actuarial assistance as needed. 
‘‘(ii) FUNDING.—The Secretary shall 
provide for the transfer, from the Federal 
Supplementary Medical Insurance Trust 
Fund under section 1841, such amounts as 
are necessary to carry out clause (i) (not 
to exceed $5,000,000) for fiscal year 2014 
and each subsequent fiscal year. Any 
amounts transferred under the preceding 
sentence for a fiscal year shall remain 
available until expended. 
‘‘(G) APPLICATION.—Section 14 of the 
Federal Advisory Committee Act (5 U.S.C. 
App.) shall not apply to the Committee. 
‘‘(2) CRITERIA AND PROCESS FOR SUBMISSION 
AND
REVIEW
OF
PHYSICIAN-FOCUSED
PAYMENT 
MODELS.— 
‘‘(A) CRITERIA FOR ASSESSING PHYSICIAN- 
FOCUSED PAYMENT MODELS.— 
‘‘(i) RULEMAKING.—Not later than 
November 1, 2015, the Secretary shall, 
through notice and comment rulemaking, 
following a request for information, estab-
lish criteria for physician-focused payment 
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models, including models for specialist phy-
sicians, that could be used by the Com-
mittee for making comments and rec-
ommendations 
pursuant 
to 
paragraph 
(1)(D). 
‘‘(ii) MEDPAC SUBMISSION OF COM-
MENTS.—During the comment period for 
the proposed rule described in clause (i), 
the Medicare Payment Advisory Commis-
sion may submit comments to the Sec-
retary on the proposed criteria under such 
clause. 
‘‘(iii) UPDATING.—The Secretary may 
update the criteria established under this 
subparagraph through rulemaking. 
‘‘(B) STAKEHOLDER SUBMISSION OF PHY-
SICIAN
FOCUSED
PAYMENT
MODELS.—On an 
ongoing basis, individuals and stakeholder enti-
ties may submit to the Committee proposals for 
physician-focused payment models that such in-
dividuals and entities believe meet the criteria 
described in subparagraph (A). 
‘‘(C) TAC 
REVIEW
OF
MODELS
SUB-
MITTED.—The Committee shall, on a periodic 
basis, review models submitted under subpara-
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graph (B), prepare comments and recommenda-
tions regarding whether such models meet the 
criteria described in subparagraph (A), and 
submit such comments and recommendations to 
the Secretary. 
‘‘(D) 
SECRETARY
REVIEW
AND
RE-
SPONSE.—The Secretary shall review the com-
ments and recommendations submitted by the 
Committee under subparagraph (C) and post a 
detailed response to such comments and rec-
ommendations on the Internet website of the 
Centers for Medicare & Medicaid Services. 
‘‘(3) RULE
OF
CONSTRUCTION.—Nothing in 
this subsection shall be construed to impact the de-
velopment or testing of models under this title or ti-
tles XI, XIX, or XXI.’’. 
(2) INCENTIVE PAYMENTS FOR PARTICIPATION 
IN
ELIGIBLE
ALTERNATIVE
PAYMENT
MODELS.— 
Section 1833 of the Social Security Act (42 U.S.C. 
1395l) is amended by adding at the end the fol-
lowing new subsection: 
‘‘(z) INCENTIVE PAYMENTS FOR PARTICIPATION IN 
ELIGIBLE ALTERNATIVE PAYMENT MODELS.— 
‘‘(1) PAYMENT INCENTIVE.— 
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‘‘(A) IN GENERAL.—In the case of covered 
professional services furnished by an eligible 
professional during a year that is in the period 
beginning with 2018 and ending with 2023 and 
for which the professional is a qualifying APM 
participant, in addition to the amount of pay-
ment that would otherwise be made for such 
covered professional services under this part for 
such year, there also shall be paid to such pro-
fessional an amount equal to 5 percent of the 
payment amount for the covered professional 
services under this part for the preceding year. 
For purposes of the previous sentence, the pay-
ment amount for the preceding year may be an 
estimation for the full preceding year based on 
a period of such preceding year that is less than 
the full year. The Secretary shall establish poli-
cies to implement this subparagraph in cases 
where payment for covered professional services 
furnished by a qualifying APM participant in 
an alternative payment model is made to an en-
tity participating in the alternative payment 
model rather than directly to the qualifying 
APM participant. 
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‘‘(B) 
FORM
OF
PAYMENT.—Payments 
under this subsection shall be made in a lump 
sum, on an annual basis, as soon as practicable. 
‘‘(C) TREATMENT
OF
PAYMENT
INCEN-
TIVE.—Payments under this subsection shall 
not be taken into account for purposes of deter-
mining actual expenditures under an alternative 
payment model and for purposes of determining 
or rebasing any benchmarks used under the al-
ternative payment model. 
‘‘(D) COORDINATION.—The amount of the 
additional payment for an item or service under 
this subsection or subsection (m) shall be deter-
mined without regard to any additional pay-
ment for the item or service under subsection 
(m) and this subsection, respectively. The 
amount of the additional payment for an item 
or service under this subsection or subsection 
(x) shall be determined without regard to any 
additional payment for the item or service 
under subsection (x) and this subsection, re-
spectively. The amount of the additional pay-
ment for an item or service under this sub-
section or subsection (y) shall be determined 
without regard to any additional payment for 
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the item or service under subsection (y) and 
this subsection, respectively. 
‘‘(2) QUALIFYING APM PARTICIPANT.—For pur-
poses of this subsection, the term ‘qualifying APM 
participant’ means the following: 
‘‘(A) 2018 AND
2019.—With respect to 
2018 and 2019, an eligible professional for 
whom the Secretary determines that at least 25 
percent of payments under this part for covered 
professional services furnished by such profes-
sional during the most recent period for which 
data are available (which may be less than a 
year) were attributable to such services fur-
nished under this part through an entity that 
participates in an eligible alternative payment 
model with respect to such services. 
‘‘(B) 2020 AND
2021.—With respect to 
2020 and 2021, an eligible professional de-
scribed in either of the following clauses: 
‘‘(i) MEDICARE REVENUE THRESHOLD 
OPTION.—An 
eligible 
professional 
for 
whom the Secretary determines that at 
least 50 percent of payments under this 
part for covered professional services fur-
nished by such professional during the 
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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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111 
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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112 
‘‘(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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113 
‘‘(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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120 
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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126 
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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129 
‘‘(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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130 
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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132 
‘‘(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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133 
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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134 
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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135 
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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136 
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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137 
‘‘(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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138 
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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139 
(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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140 
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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141 
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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142 
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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143 
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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144 
‘‘(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 2015. 
‘‘(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 
‘‘(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.’’. 
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145 
(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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146 
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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170 
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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