A bill to provide for the voluntary development by States of qualifying best practices for health care and to encourage such voluntary development by amending titles XVIII and XIX of the Social Security Act to provide differential rates of payment favoring treatment provided consistent with qualifying best practices under the Medicare and Medicaid programs, and for other purposes.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Improved Medical Decision Incentive 
Act of 2007''.

SEC. 2. FINDINGS.

    Congress makes the following findings:
            (1) The United States spends more per capita on health care 
        than any other nation, and yet it has mediocre health outcomes, 
        including the second-highest infant mortality rate of all 
        industrialized nations.
            (2) The efficacy of best practices guidelines in improving 
        health care delivery and patient outcomes is well established.
            (3) Existing payment systems compensate physicians without 
        adequate attention to the appropriateness or quality of care 
        delivered and often without reference to established best 
        practices.
            (4) Identification of and adherence to best practices can 
        improve the quality of health care while reducing overall costs 
        to the health care system.
            (5) Orderly administrative proceedings involving 
        knowledgeable professionals will enhance best practices for 
        health care.
            (6) Control of medical practices through denial of claims 
        by insurance companies has proven wasteful and confusing, and 
        has failed to motivate adequate development and use of best 
        practices for health care.

SEC. 3. VOLUNTARY STATE DEVELOPMENT AND APPROVAL OF QUALIFYING BEST 
              PRACTICES; INCENTIVES FOR PRIVATE INSURERS.

    (a) State Approval of Best Practices.--
            (1) In general.--A State health department may approve best 
        practices in a course of, or as a means of treatment for, a 
        particular condition, illness, or procedure, as the qualifying 
        standard of care for the State in order to take advantage of 
        the differential rates of payment implemented under sections 
        1898 and 1902(dd) of the Social Security Act (as added by 
        sections 4 and 5, respectively) and the private insurance 
        incentive under subsection (b).
            (2) Qualifying process for state approval.--In order for 
        best practices approved by a State under paragraph (1) to 
        qualify as best practices for purposes of implementing such 
        differential rates of payment and for purposes of such private 
        insurance incentive, a State health department shall--
                    (A) allow any duly constituted State medical 
                society or medical specialty group to file with the 
                State health department a course or means of treatment 
                representing best practices for a particular condition, 
                illness, or procedure to be applicable in the State, 
                including cost-effective prevention and management 
                measures;
                    (B) provide for notice and hearing consistent with 
                the administrative procedures of the State with respect 
                to the approval of best practices for a particular 
                condition, illness, or procedure;
                    (C) permit any health insurer described in 
                subsection (b)(1), including any individual authorized 
                by the Secretary of Health and Human Services to act as 
                a representative of the Medicare and Medicaid programs 
                under titles XVIII and XIX, respectively, of the Social 
                Security Act (42 U.S.C. 1395 et seq.; 1396 et seq.), to 
                intervene in any administrative proceeding to approve 
                such best practices;
                    (D) provide appropriate notice of any such 
                administrative proceeding to established advocacy 
                groups concerned with the condition or illness involved 
                in the proceeding; and
                    (E) in the case where the State health department 
                determines that a course of treatment filed in 
                accordance with subparagraph (A) would lower system 
                costs and improve quality of care, approve that best 
                practices course of treatment within its jurisdiction 
                as the qualifying standard of care under this 
                subsection for that condition, illness, or procedure.
            (3) Priority of approvals.--State health departments are 
        encouraged to prioritize approval of best practices that 
        address conditions, illnesses, or procedures where those best 
        practices are reasonably anticipated to result in the greatest 
        overall cost savings and quality improvements.
            (4) Approval of qualifying best practices.--If, at the 
        conclusion of a process that meets the requirements of 
        paragraph (2), the State health department approves best 
        practices (as described in paragraph (1)), those best practices 
        shall be--
                    (A) deemed qualifying best practices;
                    (B) the basis for differential rates of payment 
                under sections 1898 and 1902(dd) of the Social Security 
                Act (as added by sections 4 and 5, respectively); and
                    (C) eligible for the private insurance incentive 
                under subsection (b).
            (5) Definition of state.--In this subsection the term 
        ``State'' includes such regional or local areas as the State 
        health department determines appropriate.
    (b) Incentive for Private Insurers To Provide Timely Payment for 
Services Provided in Accordance With Best Practices.--
            (1) In general.--Notwithstanding any other provision of 
        law, in the case where qualifying best practices have been 
        approved by a State health department in accordance with 
        subsection (a), any health insurer doing business in interstate 
        commerce and providing health care coverage within the State 
        shall pay all provider charges for any service provided in 
        accordance with such best practices not later than 30 days 
        after the date on which such service is provided and, absent 
        fraud, without regard for the insurer's internal utilization 
        review or claims denial procedure.
            (2) Standing to enforce.--Any provider or specialty group 
        that does business in a State where the State health department 
        has approved qualifying best practices in accordance with 
        subsection (a) may bring a civil action in an appropriate 
        United States district court to enjoin efforts by any health 
        insurer to challenge or delay payment for services provided by 
        the provider or a member of the specialty group in accordance 
        with such best practices approved in the State. The district 
        court shall award a provider or specialty group costs and 
        attorney's fees in such a civil action if the court finds that 
        the challenge or delay was a willful violation of this Act.

SEC. 4. IMPLEMENTATION OF DIFFERENTIAL RATES OF PAYMENT FOR QUALIFYING 
              BEST PRACTICES UNDER THE MEDICARE PROGRAM.

    (a) Differential Rates of Payment for Qualifying Best Practices.--
Title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) is 
amended by adding at the end the following new section:

     ``differential rates of payment for qualifying best practices

    ``Sec. 1898.  (a) In General.--
            ``(1) Differential rates of payment.--Notwithstanding any 
        other provision of law, the Secretary shall establish 
        procedures to provide differential rates of payment for items 
        and services covered under the program under this title that 
        favor treatment provided consistent with qualifying best 
        practices approved by a State in accordance with section 3(a) 
        of the Improved Medical Decision Incentive Act of 2007.
            ``(2) Regulations.--Not later than March 31, 2008, the 
        Secretary shall promulgate regulations to carry out this 
        subsection.
            ``(3) Budget neutrality.--The Secretary shall ensure that 
        the procedures established under paragraph (1) do not result in 
        overall expenditures for any year under this title that are 
        more than the expenditures which would have been made if such 
        procedures had not been established, taking into account--
                    ``(A) any savings anticipated as a result of the 
                application of best practices to items and services 
                covered under the program under this title; and
                    ``(B) the net effects of reimbursement increases 
                and decreases as a result of the differential in rates 
                of payment established under such program.
    ``(b) Adoption of National Best Practices.--
            ``(1) In general.--Such procedures shall specify that, in 
        any case where the Secretary finds a national standard for best 
        practices to be appropriate, the Secretary may adopt national 
        best practices. Subject to paragraph (2), such national best 
        practices shall be applicable within a State as a qualifying 
        best practice in accordance with section 3(a) of the Improved 
        Medical Decision Incentive Act of 2007 and the basis for the 
        establishment of differential rates of payment under the 
        program under this title.
            ``(2) Limitation.--In any case where the State health 
        department has approved qualifying best practices in the State 
        for a condition, illness, or procedure in accordance with such 
        section 3(a), national best practices adopted under paragraph 
        (1) shall only be applicable within such State as a qualifying 
        best practice and the basis for the establishment of such 
        differential rates of payment if the Secretary finds, after a 
        hearing in the State that meets the procedural requirements 
        under paragraph (2) of such section 3(a), that the national 
        best practices will improve health care outcomes and lower 
        health care costs in the State to a greater extent than the 
        qualifying best practices approved by the State health 
        department for that condition, illness, or procedure in 
        accordance with such section 3(a).''.
    (b) Effective Date.--The amendment made by this section shall apply 
to items and services furnished on or after March 31, 2008.

SEC. 5. IMPLEMENTATION OF DIFFERENTIAL RATES OF PAYMENT FOR QUALIFYING 
              BEST PRACTICES UNDER THE MEDICAID PROGRAM.

    (a) State Plan Amendment.--Section 1902(a) of the Social Security 
Act (42 U.S.C. 1396a(a)) is amended--
            (1) in paragraph (69), by striking ``and'' at the end;
            (2) in paragraph (70)(B)(iv), by striking the period at the 
        end and inserting ``; and''; and
            (3) by inserting after paragraph (70)(B)(iv) the following 
        new paragraph:
            ``(71) provide, in accordance with procedures established 
        by the Secretary under subsection (dd) and after consultation 
        with and upon the recommendation of the State health department 
        (and the approval of the Secretary), for differential rates of 
        payment for medical assistance under the plan that favor 
        treatment provided consistent with qualifying best practices 
        approved by the State health department in accordance with 
        section 3(a) of the Improved Medical Decision Incentive Act of 
        2007, except that in establishing such payment rates, the State 
        shall ensure that the amounts paid under such rates do not 
        exceed the amount the State would have paid for such medical 
        assistance under the plan if such differential rates of payment 
        had not been made, taking into account any annual increases in 
        population and inflation.''.
    (b) Establishment of Procedures.--Section 1902 of the Social 
Security Act (42 U.S.C. 1396a) is amended by adding at the end the 
following new subsection:
    ``(dd) Differential Rates of Payment for Qualifying Best Practices 
and Adoption of National Best Practices.--
            ``(1) Differential rates of payment for qualifying best 
        practices.--
                    ``(A) In general.--Notwithstanding any other 
                provision of law, the Secretary shall establish 
                procedures to provide differential rates of payment for 
                medical assistance provided consistent with qualifying 
                best practices approved by a State in accordance with 
                section 3(a) of the Improved Medical Decision Incentive 
                Act of 2007.
                    ``(B) Regulations.--Not later than March 31, 2008, 
                the Secretary shall promulgate regulations to carry out 
                this subsection.
                    ``(C) Budget neutrality.--The Secretary shall 
                ensure that the procedures established under 
                subparagraph (A) do not result in overall expenditures 
                for any year under a State plan that are more than the 
                expenditures which would have been made if such 
                procedures had not been established, taking into 
                account--
                            ``(i) any savings anticipated as a result 
                        of the application of best practices to medical 
                        assistance provided under the State plan; and
                            ``(ii) the net effects of reimbursement 
                        increases and decreases as a result of the 
                        differential rates of payment established under 
                        such plan.
            ``(2) Adoption of national best practices.--Such procedures 
        shall specify that, in any case where the Secretary adopts 
        national best practices in accordance with section 1898(b), 
        subject to the limitation under paragraph (2) of such section, 
        such national best practices shall be--
                    ``(A) applicable within a State as a qualifying 
                best practice in accordance with section 3(a) of the 
                Improved Medical Decision Incentive Act of 2007; and
                    ``(B) the basis for the establishment of 
                differential rates of payment under the State plan.''.
    (c) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall apply to medical 
        assistance furnished on or after March 31, 2008.
            (2) Extension of effective date for state law amendment.--
        In the case of a State plan under title XIX of the Social 
        Security Act (42 U.S.C. 1396 et seq.) which the Secretary of 
        Health and Human Services determines requires State legislation 
        in order for the plan to meet the additional requirements 
        imposed by the amendments made by this section, the State plan 
        shall not be regarded as failing to comply with the 
        requirements of such title solely on the basis of its failure 
        to meet these additional requirements before the first day of 
        the first calendar quarter beginning after the close of the 
        first regular session of the State legislature that begins 
        after the date of enactment of this Act. For purposes of the 
        previous sentence, in the case of a State that has a 2-year 
        legislative session, each year of the session is considered to 
        be a separate regular session of the State legislature.

SEC. 6. OVERSIGHT BY THE CENTERS FOR MEDICARE & MEDICAID SERVICES.

    (a) Review and Report.--
            (1) Review.--
                    (A) In general.--The Secretary shall conduct an 
                annual review of the efficacy of all qualifying best 
                practices approved pursuant to section 3(a) and, if 
                applicable, any national best practices adopted 
                pursuant to section 1898(b) of the Social Security Act, 
                as added by section 4(a).
                    (B) Considerations.--The review conducted under 
                subparagraph (A) shall consider--
                            (i) the effect of such best practices with 
                        respect to improving outcomes and lowering the 
                        cost of care; and
                            (ii) the effect and efficacy of 
                        differential rates of payment under the 
                        Medicare and Medicaid programs under titles 
                        XVIII and XIX, respectively, of the Social 
                        Security Act (42 U.S.C. 1395 et seq.; 1396 et 
                        seq.) under procedures established pursuant to 
                        the amendments made by sections 4 and 5.
            (2) Report.--The Secretary shall submit an annual report to 
        Congress containing the results of the review conducted under 
        paragraph (1)(A), together with recommendations for such 
        legislation and administrative actions as the Secretary 
        determines appropriate.
    (b) Annual Conference.--The Secretary shall host an annual 
conference of all State health directors, and any State medical 
societies and medical specialty groups that have filed best practices 
for approval with a State health department in accordance with 
subparagraph (A) of section 3(a)(2) and any health insurers and 
advocacy groups that have participated in any administrative proceeding 
to approve best practices in accordance with subparagraphs (C) and (D), 
respectively, of such section, to provide--
            (1) for the exchange of information; and
            (2) an opportunity to summarize the effects on health care 
        costs, quality, and outcomes of qualifying best practices 
        approved in accordance with section 3(a) prior to the date on 
        which the conference is held.
    (c) Authorization.--There are authorized to be appropriated such 
sums as may be necessary for the purpose of carrying out this section.
    (d) Definition of Secretary.--In this section, the term 
``Secretary'' means the Secretary of Health and Human Services, acting 
through the Administrator of the Centers for Medicare & Medicaid 
Services.

Summary: Improved Medical Decision Incentive Act of 2007 - Allows a state health department to approve best practices in a course of, or as a means of treatment for, a particular condition, illness, or procedure, as the qualifying standard of care for the state in order to take advantage of the differential rates of payment implemented under the Social Security Act and the private insurance incentive under this Act.

Requires a state health department, among other conditions for state approval, to allow any duly constituted state medical society or medical speciality group to file with the state health department a course or means of treatment representing best practices for a particular condition, illness, or procedure.

Requires any interstate health insurer providing health care coverage within a state with approved qualifying best practices to pay all provider charges for any service provided in accordance with such practices.

Authorizes any such provider or specialty group to bring a civil action in an appropriate U.S. district court to enjoin efforts by any health insurer to challenge or delay payment for services provided by the provider or a member of the specialty group in accordance with such best practices.

Amends titles XVIII (Medicare) and XIX (Medicaid) to provide for implementation of differential rates of payment for covered items and services that favor treatment consistent with qualifying best practices under the Medicare and Medicaid programs.

Requires the Secretary of Health and Human Services, acting through the Administrator of the Centers for Medicare & Medicaid Services, to review annually and report to Congress on the efficacy of all qualifying best practices approved pursuant to this Act and, if applicable, any national best practices adopted pursuant to this Act.

Requires the Secretary also to host an annual conference on best practices for all state health directors, any state medical societies and medical specialty groups that have filed best practices for state approval, and any health insurers and advocacy groups that have participated in any administrative proceeding to approve best practices.