II 113th CONGRESS 1st Session S. 1137 IN THE SENATE OF THE UNITED STATES June 11, 2013 Mr. Wyden (for himself, Ms. Landrieu , Ms. Cantwell , Mr. Merkley , and Mr. Blumenthal ) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend title XVIII of the Social Security Act to modernize payments for ambulatory surgical centers under the Medicare program, and for other purposes.

1. Short title This Act may be cited as the Ambulatory Surgical Center Quality and Access Act of 2013 . 2. Aligning updates for ambulatory surgical center services with updates for OPD services Section 1833(i)(2)(D) of the Social Security Act ( 42 U.S.C. 13951(i)(2)(D) ) is amended— (1) by redesignating clause (vi) as clause (vii); (2) in the first sentence of clause (v), by inserting before the period the following: and, in the case of 2014 or a subsequent year, by the adjustment described in subsection (t)(3)(G) for the respective year ; and (3) by inserting after clause (v) the following new clause: (vi) In implementing the system described in clause (i) for 2014 and each subsequent year, there shall be an annual update under such system for the year equal to the OPD fee schedule increase factor specified under subsection (t)(3)(C)(iv) for such year, adjusted in accordance with clauses (iv) and (v). . 3. Transparency of quality reports and application of value-based purchasing to ASCs (a) Quality measures Paragraph (7) of section 1833(i) of the Social Security Act ( 42 U.S.C. 1395l(i) ) is amended by adding at the end the following new subparagraphs: (C) To the extent that quality measures implemented by the Secretary under this paragraph for ambulatory surgical centers and under section 1833(t)(17) for hospital outpatient departments are applicable to the provision of surgical services in both ambulatory surgical centers and hospital outpatient departments, the Secretary shall make reported data available on the website Medicare.gov in a manner that will permit side-by-side comparisons on such measures for ambulatory surgical centers and hospital outpatient departments in the same geographic area. (D) For each procedure covered for payment in an ambulatory surgical center, the Secretary shall publish, along with the quality reporting comparisons provided for in subparagraph (C), comparisons of the Medicare payment and beneficiary copayment amounts for the procedure when performed in ambulatory surgical centers and hospital outpatient departments in the same geographic area. (E) The Secretary shall ensure that an ambulatory surgery center and a hospital has the opportunity to review, and submit any corrections for, the data to be made public with respect to the ambulatory surgery center under subparagraph (C)(ii) prior to such data being made public. . (b) Ambulatory surgical center value-Based purchasing program Section 1833(i) of the Social Security Act ( 42 U.S.C. 1395l(i) ) is amended by adding at the end the following new paragraph: (8) Value-based purchasing program (A) Establishment The Secretary shall establish an ambulatory surgical center value-based purchasing program (in this subsection referred to as the Program ) under which, subject to subparagraph (I), each ambulatory surgical center that the Secretary determines meets (or exceeds) the performance standards under subparagraph (D) for the performance period (as established under subparagraph (E)) for a calendar year is eligible, from the amounts made available in the total shared savings pool under subparagraph (I)(iv), for shared savings under subparagraph (I), which shall be in the form, after application of the adjustments under clauses (iv), (v), and (vi) of paragraph (2)(D), of an increase in the amount of payment determined under the payment system under paragraph (2)(D) for surgical services furnished by such center during the subsequent year, by the value-based percentage amount under subparagraph (H) specified by the Secretary for such center and year. (B) Program start date The Program shall apply to payments for procedures occurring on or after January 1, 2015. (C) Measures (i) In general For purposes of the Program, the Secretary shall select measures from the measures specified under paragraph (7). (ii) Availability of measure and data The Secretary may not select a measure under this paragraph for use under the Program with respect to a performance period for a calendar year unless such measure has been included, and the reported data available, on the website Medicare.gov , for at least 1 year prior to the beginning of such performance period. (iii) Measure not applicable unless ASC furnishes services appropriate to measure A measure selected under this paragraph for use under the Program shall not apply to an ambulatory surgical center if such center does not furnish services appropriate to such measure. (D) Performance standards (i) Establishment The Secretary shall establish performance standards with respect to measures selected under subparagraph (C)(i) for a performance period for a calendar year. (ii) Achievement and improvement The performance standards established under clause (i) shall include levels of achievement and improvement. (iii) Timing The Secretary shall establish and announce the performance standards under clause (i) not later than 60 days prior to the beginning of the performance period for the calendar year involved. (E) Performance period For purposes of the Program, the Secretary shall establish the performance period for a calendar year. Such performance period shall begin and end prior to the beginning of such calendar year. (F) ASC performance score The Secretary shall develop a methodology for assessing the total performance of each ambulatory surgery center based on performance standards with respect to the measures selected under subparagraph (C) for a performance period (as established under subparagraph (E)). Using such methodology, the Secretary shall provide for an assessment (in this subsection referred to as the ASC performance score ) for each ambulatory surgical center for each performance period. The methodology shall provide that the ASC performance score is determined using the higher of its achievement or improvement score for each measure. (G) Appeals The Secretary shall establish a process by which ambulatory surgery centers may appeal the calculation of the ambulatory surgery center’s performance with respect to the performance standards established under subparagraph (D) and the ambulatory surgery center performance score under subparagraph (E). The Secretary shall ensure that such process provides for resolution of appeals in a timely manner. (H) Calculation of value-based incentive payment (i) Value-based percentage amount For purposes of subparagraph (A), the Secretary shall specify a value-based percentage amount for an ambulatory surgical center for a calendar year. (ii) Requirements In specifying the value-based percentage amount for each ambulatory surgical center for a calendar year under clause (i), the Secretary shall ensure that such percentage is based on— (I) the ASC performance score of the ambulatory surgery center under subparagraph (F); and (II) the amount of the total savings pool made available under subparagraph (I)(iii)(I) for such year. (I) Annual calculation of shared savings funding for value-based incentive payments (i) Determining bonus pool In each year of the Program, ambulatory surgery centers shall be eligible to receive payment for shared savings under the Program only if for such year the sum of— (I) the estimated amount of expenditures under this title for Medicare fee-for-service beneficiaries (as defined in section 1899(h)(3)) for surgical services for which payment is made under the payment system under paragraph (2), adjusted for beneficiary characteristics, and (II) the estimated amount of expenditures under this title for Medicare fee-for-service beneficiaries (as so defined) for the same surgical services for which payment is made under the prospective payment system under subsection (t), adjusted for beneficiary characteristics, is at least the percent specified by the Secretary below the applicable benchmark determined for such year under clause (ii). For purposes of this subparagraph, such sum shall be referred to as estimated expenditures . The Secretary shall determine the appropriate percent described in the preceding sentence to account for normal variation in volume of services under this title and to account for changes in the coverage of services in ambulatory surgery centers and hospital outpatient departments during the performance period involved. (ii) Establish and update benchmark For purposes of clause (i), the Secretary shall calculate a benchmark for each year described in such clause equal to the product of— (I) estimated expenditures described in clause (i) for such year, and (II) the average annual growth in estimated expenditures for the most recent three years. Such benchmark shall be reset at the start of each calendar year, and adjusted for changes in enrollment under the Medicare fee-for-service program. (iii) Payments based on shared savings If the requirement under clause (i) is met for a year— (I) 50 percent of the total savings pool estimated under clause (iv) for such year shall be made available for shared savings to be paid to ambulatory surgical centers under this paragraph; (II) a percent (as determined appropriate by the Secretary, in accordance with subparagraph (H)) of such amount made available for such year shall be paid as shared savings to each ambulatory surgery center that is determined under the Program to have met or exceeded performance scores for such year; and (III) all funds made available under subclause (I) for such year shall be used and paid as sharing savings for such year in accordance with subclause (II). (iv) Estimate of the total savings pool For purposes of clause (iii), the Secretary shall estimate for each year of the Program the total savings pool as the product of— (I) the conversion factor for such year determined by the Secretary under the payment system under paragraph (2)(D) divided by the conversion factor calculated under subsection (t)(3)(C) for such year for covered OPD services, multiplied by 100, and (II) (aa) the product of the estimated Medicare expenditures for surgical services described in clause (i)(I) furnished during such year to Medicare fee-for-service beneficiaries (as defined in section 1899(h)(3)) for which payment is made under subsection (t) and the average annual growth in the estimated Medicare expenditures for such services furnished to Medicare fee-for-service beneficiaries (as so defined) for which payment is made under subsection (t) in the most recent available 3 years, less (bb) the estimated Medicare expenditures for surgical services described in clause (i)(I) furnished to Medicare fee-for-service beneficiaries for which payment was made under subsection (t) in the most recent year. (J) No effect in subsequent calendar years The value-based percentage amount under subparagraph (H) and the percent determined under subparagraph (I)(iii)(I) shall apply only with respect to the calendar year involved, and the Secretary shall not take into account such amount or percentage in making payments to an ambulatory surgery center under this section in a subsequent calendar year. . 4. Advisory Panel on Hospital Outpatient Payment Representation (a) ASC representative The second sentence of section 1833(t)(9)(A) of the Social Security Act ( 42 U.S.C. 1395l(t)(9)(A) ) is amended by inserting and suppliers subject to the prospective payment system (including at least one ambulatory surgical center representative) after an appropriate selection of representatives of providers . (b) Effective date The amendment made by subsection (a) shall take effect on the date of the enactment of this Act. 5. Reasons for excluding additional procedures from ASC approved list (a) In general Section 1833(i)(1) of the Social Security Act ( 42 U.S.C. 1395l(i)(1) ) is amended by adding at the end the following: In updating such lists for application in years beginning after the date of the enactment of this sentence, for each procedure that was requested to be included in such lists during the public comment period but which the Secretary does not propose (in the final rule updating such lists) to so include in such lists, Secretary shall cite in such final rule the specific criteria in paragraph (b) or (c) of section 416.166 of title 42, Code of Federal Regulations, based on which the procedure was excluded. If paragraph (b) of such section is cited for exclusion of a procedure, the Secretary shall identify the peer reviewed research or the evidence upon which such determination is based. The Secretary may not use or cite section 416.166(c)(7) of such title as criteria or a basis for exclusion of a procedure from such lists. . (b) Effective date The amendment made by subsection (a) shall apply to lists of ambulatory surgery procedures for application in years beginning after the date of the enactment of this Act.