Establishing Beneficiary Equity in the Hospital Readmission Program Act of 2015

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Establishing Beneficiary Equity in 
the Hospital Readmission Program Act of 2015''.

SEC. 2. ESTABLISHING BENEFICIARY EQUITY IN THE MEDICARE HOSPITAL 
              READMISSION PROGRAM.

    (a) Transitional Adjustment for Dual Eligible Population and 
Socioeconomic Status.--Section 1886(q)(4)(C) of the Social Security Act 
(42 U.S.C. 1395ww(q)(4)(C)) is amended by adding at the end the 
following new clause:
                            ``(iii) Transitional adjustment for dual 
                        eligible population and socioeconomic status.--
                                    ``(I) In general.--In determining a 
                                hospital's excess readmission ratio 
                                under clause (i) for purposes of making 
                                payments for discharges occurring 
                                during fiscal years 2016 and 2017, and 
                                before the initial application of 
                                clause (iv), and in order to ensure 
                                that hospitals that treat the most 
                                vulnerable populations are not unfairly 
                                penalized by the program under this 
                                subsection, the Secretary shall provide 
                                for such risk adjustment as will take 
                                into account both a hospital's 
                                proportion of inpatients who are full-
                                benefit dual eligible individuals (as 
                                defined in section 1935(c)(6)) and the 
                                socioeconomic status of the patients 
                                served by the hospital.
                                    ``(II) Quantitative method.--For 
                                purposes of applying subclause (I)(bb), 
                                the Secretary, to the maximum extent 
                                practicable, shall utilize the most 
                                recent data available from the Bureau 
                                of the Census in order to develop a 
                                quantitative method to adjust for 
                                socioeconomic status. In developing 
                                such quantitative method, the 
                                Secretary--
                                            ``(aa) shall, to the 
                                        maximum extent practicable, use 
                                        inputs that address at least 
                                        income, education level, or 
                                        poverty rate; and
                                            ``(bb) may include inputs 
                                        that address other 
                                        socioeconomic and 
                                        sociodemographic factors 
                                        determined appropriate by the 
                                        Secretary.
                                    ``(III) Patients served by the 
                                hospital.--For purposes of subclause 
                                (I)(bb), the Secretary shall, to the 
                                maximum extent practicable, measure the 
                                socioeconomic status for all patients 
                                served by each hospital. The Secretary 
                                may supplement incomplete or 
                                inaccessible patient-level data with 
                                data related to the geographic region 
                                of the patients served by the hospital.
                                    ``(IV) Minimizing reporting burden 
                                on hospitals.--In carrying out this 
                                clause, the Secretary shall not impose 
                                any additional reporting requirements 
                                on hospitals.''.
    (b) Subsequent Adjustments Based on IMPACT and MedPAC Reports.--
Section 1886(q)(4)(C) of the Social Security Act (42 U.S.C. 
1395ww(q)(4)(C)) is further amended by adding at the end the following 
new clause:
                            ``(iv) Risk adjustments under readmission 
                        program based on impact and medpac reports.--In 
                        making recommendations under subparagraph (D) 
                        of section 2(d)(1) of the IMPACT Act of 2014 
                        (Public Law 113-185; 42 U.S.C. 1395lll note) 
                        with respect to the application of risk 
                        adjustment under this subsection, the Secretary 
                        is required to base such risk adjustment on the 
                        reports submitted under subparagraphs (A)(ii) 
                        and (B)(ii) of such section as well as on the 
                        report submitted by the Medicare Payment 
                        Advisory Commission under section 2(c) of the 
                        Establishing Beneficiary Equity in the Hospital 
                        Readmission Program Act of 2015. The 
                        Administrator of the Centers for Medicare & 
                        Medicaid Services shall incorporate such 
                        recommendations in carrying out risk adjustment 
                        under this subsection for discharges occurring 
                        in fiscal years after fiscal year 2017 in order 
                        to ensure that hospitals that treat the most 
                        vulnerable populations are not unfairly 
                        penalized by the program under this subsection. 
                        For fiscal years beginning more than 5 years 
                        after the date of submission of the report 
                        under section 2(d)(1)(B)(ii) of the IMPACT Act 
                        of 2014, the Secretary may use alternative 
                        adjustment mechanisms under this subsection to 
                        account for socioeconomic factors if the 
                        Secretary finds that such measures are better 
                        at accounting for socioeconomic factors than 
                        the mechanisms that would otherwise apply.''.
    (c) MedPAC Study on 30-Day Readmission Threshold.--The Medicare 
Payment Advisory Commission shall conduct a study on the 
appropriateness of using a threshold of 30 days for readmissions under 
section 1886(q)(5)(E) of the Social Security Act (42 U.S.C. 
1395ww(q)(5)(E)). The Commission shall submit to Congress a report on 
such study in its report to Congress in June 2016.
    (d) Addressing Issue of Noncompliant Patients.--Section 
1886(q)(4)(C) of the Social Security Act (42 U.S.C. 1395ww(q)(4)(C)), 
as amended by subsections (b) and (c), is further amended by adding at 
the end the following new clause:
                            ``(v) Consideration of exclusion of 
                        noncompliant patient cases based on v or other 
                        appropriate codes.--In promulgating regulations 
                        to carry out this subsection for the applicable 
                        period with respect to fiscal year 2017, the 
                        Secretary shall consider the use of V or other 
                        ICD-related codes for potential exclusions of 
                        cases in order to address the issue of 
                        noncompliant patients.''.
    (e) Excluding Certain Clinical Conditions.--
            (1) Study.--
                    (A) In general.--The Secretary of Health and Human 
                Services shall conduct a study, consistent with this 
                paragraph, that assesses and makes recommendations with 
                respect to excluding patients whose clinical conditions 
                or diagnoses may require frequent hospitalizations, 
                from the calculation of excess readmissions under 
                section 1886(q)(5)(E) of the Social Security Act (42 
                U.S.C. 1395ww(q)(5)(E)).
                    (B) Use of a technical expert panel.--The Secretary 
                shall convene a multi-stakeholder technical expert 
                panel comprised of individuals knowledgeable about 
                clinical care of hospitalized patients and quality 
                measurement, to provide input and recommendations on 
                the study conducted under this paragraph.
                    (C) Clinical conditions to be considered.--In 
                conducting the study, the Secretary shall consider 
                exclusions for patients with transplants, burns, 
                psychosis, and substance abuse disorders. The Secretary 
                may include additional clinical conditions where 
                appropriate care may require frequent hospitalizations.
                    (D) Transparency.--The Secretary shall make a draft 
                of report on such study available for public comment 
                for a period of not less than 30 days. The final study 
                and recommendations shall address the Secretary's 
                response to public comments.
                    (E) Deadline.--The Secretary shall submit a final 
                report on the study to Congress no later than Oct. 1, 
                2016. Such final report shall include recommendations 
                regarding the relevant clinical conditions that should 
                be excluded from the calculation of excess readmissions 
                described in subparagraph (A).
            (2) Application to calculation of excess readmissions.--
        Beginning with fiscal year 2018, the Secretary shall exclude 
        any relevant clinical conditions identified in the 
        recommendations made in the final report under paragraph (1)(E) 
        in determining a hospital's publicly reported readmission rate 
        and excess readmissions ratio under section 1886(q)(4)(C) of 
        the Social Security Act (42 U.S.C. 1395ww(q)(4)(C)). The 
        Secretary also is encouraged to consider applying the 
        exclusions so identified to other Medicare public reporting and 
        pay-for-performance programs in which readmission measures are 
        used.
    (f) Budget Neutral Implementation.--The Secretary of Health and 
Human Services shall make such payment adjustment to subsection (d) 
hospitals under the inpatient prospective payment system under section 
1886 of the Social Security Act (42 U.S.C. 1395ww) as may be necessary 
to ensure that the implementation of the this section (including the 
amendments made by this section) does not result in an increase in 
aggregate expenditures under such section 1886.

Summary: Establishing Beneficiary Equity in the Hospital Readmission Program Act of 2015 This bill amends title XVIII (Medicare) of the Social Security Act (SSAct) with respect to the hospital readmissions reduction program under the inpatient (hospital) prospective payment system (IPPS). The Secretary of Health and Human Services, in determining a hospital's excess readmission ratio for purposes of making payments for discharges occurring during FY2016-FY2017, is required to make a risk adjustment to the ratio that takes into account both: (1) a hospital's proportion of inpatients who are full-benefit dual eligible individuals (eligible for both Medicare and Medicaid under SSAct title XIX), and (2) the socioeconomic status of patients served by the hospital.  The Secretary must base the risk adjustment under the readmission program for subsequent fiscal years on specified reports required by the Improving Medicare Post Acute Care Transformation Act of 2014 as well as a report the Medicare Payment Advisory Commission shall submit on the appropriateness of using a threshold of 30 days for readmissions under the program. The Administrator of the Centers for Medicare &amp; Medicaid Services must then incorporate report recommendations in carrying out risk adjustments for discharges occurring in such fiscal years in order to ensure that the most vulnerable populations are not unfairly penalized by the program.  The Secretary shall consider the use of V or other International Classification of Diseases-related codes for potential exclusion of noncompliant patient cases when promulgating related regulations for FY2017. The Secretary must: (1) assess whether to exclude from the calculation of excess readmissions any patients whose clinical conditions or diagnoses may require frequent hospitalizations; then (2) exclude, starting in FY2018, any relevant clinical conditions identified in the assessment recommendations when determining a hospital's publicly reported readmission rate and excess readmissions ratio. The Secretary is directed to make a payment adjustment to subsection (d) hospitals necessary to ensure that the implementation of this Act does not result in any increase in aggregate expenditures under the IPPS. (Generally, a subsection (d) hospital is an acute care hospital, particularly one that receives payment under the IPPS when providing covered inpatient services to eligible beneficiaries.)