I 114th CONGRESS 1st Session H. R. 3298 IN THE HOUSE OF REPRESENTATIVES July 29, 2015 Mr. Brady of Texas (for himself and Mr. Kind ) introduced the following bill; which was referred to the Committee on Ways and Means , and in addition to the Committee on Energy and Commerce , for a period to be subsequently 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 provide for value-based purchasing of post-acute care services under the Medicare program, and for other purposes.

1. Short title This Act may be cited as the Medicare Post-Acute Care Value-Based Purchasing Act of 2015 . 2. Repeal of market basket cuts for post-acute providers (a) SNFs Section 1888(e) of the Social Security Act ( 42 U.S.C. 1395yy(e) ), as amended by section 411(a) of the Medicare Access and CHIP Reauthorization Act of 2015, is amended— (1) in paragraph (5)(B)— (A) in clause (i), by striking clauses (ii) and (iii) and inserting clause (ii) ; (B) in clause (ii), by striking subject to clause (iii), ; and (C) by striking clause (iii); and (2) in paragraph (6)(A)(i), by striking clauses (ii) and (iii) of paragraph (5)(B) and inserting paragraph (5)(B)(ii) . (b) IRFs Section 1886(j) of the Social Security Act ( 42 U.S.C. 1395ww(j) ), as amended by section 411(b) of the Medicare Access and CHIP Reauthorization Act of 2015, is amended— (1) in paragraph (3)(C)— (A) in clause (i), by striking clauses (ii) and (iii) and inserting clause (ii) ; (B) in clause (ii), by striking Subject to clause (iii), after and inserting After ; and (C) by striking clause (iii); and (2) in paragraph (7)(A)(i), by striking subparagraphs (C)(iii) and (D) of paragraph (3) and inserting paragraph (3)(D) . (c) HHAs Section 1895(b)(3)(B) of the Social Security Act ( 42 U.S.C. 1395fff(b)(3)(B) ), as amended by section 411(c) of the Medicare Access and CHIP Reauthorization Act of 2015, is amended— (1) in clause (iii), by striking the last sentence; and (2) in clause (vi)(I), by striking (except 2018) . (d) LTCHs Section 1886(m)(3) of the Social Security Act ( 42 U.S.C. 1395ww(m)(3) ), as amended by section 411(e) of the Medicare Access and CHIP Reauthorization Act of 2015, is amended— (1) in subparagraph (A), by striking Subject to subparagraph (C), in implementing and inserting In implementing ; and (2) by striking subparagraph (C). (e) Effective date The amendments made by this section shall be effective as if included in the enactment of the Medicare Access and CHIP Reauthorization Act of 2015. 3. Post-acute care value-based purchasing program (a) In general Section 1899B of the Social Security Act ( 42 U.S.C. 1395lll ) is amended— (1) in the heading, by inserting ; post-acute care value-based purchasing program before the period at the end; and (2) by adding at the end the following new subsection: (n) Post-Acute care value-Based purchasing program (PAC VBP program) (1) Establishment (A) In general Subject to the succeeding provisions of this subsection, the Secretary shall establish a post-acute care value-based purchasing program (in this subsection referred to as the PAC VBP Program ) under which value-based incentive payments are made in a payment year to PAC providers. (B) Program implementation The PAC VBP Program shall apply to payments for services furnished in payment years beginning on or after October 1, 2019. (C) Treatment of new PAC providers In the case of a PAC provider that first begins participation in the program under this title during the performance period for a payment year (and had not previously submitted claims under this title as such a provider under a different billing number or tax identifier), such provider shall not be treated under this subsection as a PAC provider until the subsequent payment year and performance period for such subsequent payment year. (D) Payment year defined In this subsection, the term payment year means— (i) for PAC providers described in clause (i) of subsection (a)(2)(A) (relating to home health agencies), a calendar year; and (ii) for all other PAC providers, a fiscal year. (E) Type of provider defined In this subsection, the term provider type means, with respect to PAC providers, each of the types of PAC providers described in a clause in subsection (a)(2)(A). (2) Application of measure (A) In general Under the PAC VBP Program, the Secretary shall apply the resource use measure specified under subsection (d)(1)(A) for purposes of the PAC VBP Program. (B) Application on provider and area basis Such measure shall be applied separately— (i) for each PAC provider; and (ii) for all PAC providers, regardless of type, in each hospital service area or comparable area (as determined by the Secretary) in which an individual receives a service from any PAC provider involved under this title in such area. (3) Performance standards (A) Establishment The Secretary shall establish performance standards consistent with this paragraph with respect to the measure applied under paragraph (2) for a performance period for a payment year. (B) Higher of achievement and improvement The performance standards established under subparagraph (A) shall include levels of achievement and improvement. In calculating the performance score of a PAC provider (including an area) under paragraph (4), the Secretary shall use the higher of either improvement or achievement. (C) Timing The Secretary shall establish and announce the performance standards established under subparagraph (A) not later than 90 days before the beginning of the performance period for the payment year involved. (4) PAC performance scores (A) In general The Secretary shall develop a methodology for assessing the total performance of each PAC provider, and of each hospital service area or comparable area (as determined by the Secretary, based on performance standards established under paragraph (3) with respect to the measure applied under paragraph (2) for a performance period for a payment year. (B) Computation of individual, area, and composite performance scores Using such methodology, the Secretary shall provide for— (i) an assessment, based on the measure applied under paragraph (2)(B)(i), for each individual PAC provider for each performance period; (ii) an assessment, based on the measure applied under paragraph (2)(B)(ii), for all PAC providers in each area described in such paragraph for each performance period; and (iii) a composite assessment (in this subsection referred to as the PAC composite performance score ) for each PAC provider for each performance period equal to the sum of— (I) 55 percent of the performance score under clause (i) for the period for that PAC provider; and (II) 45 percent of the performance score under clause (ii) for the period for all PAC providers located in the area in which the PAC provider is located. (C) Ranking of PAC performance scores The Secretary shall, for the performance period for each payment year for each type of PAC provider, rank the PAC composite performance scores determined under subparagraph (B)(iii) from low to high. (5) Calculation of value-based incentive payments (A) In general With respect to a PAC provider, based on the ranking under paragraph (4)(C) for a performance period for a payment year, the Secretary shall increase the payment basis specified in subparagraph (B) otherwise applicable to such provider for services furnished by such provider during such payment year by the value-based incentive payment percentage specified under subparagraph (C) for the provider and payment year. (B) Payment basis The payment basis specified in this subparagraph for a type of provider is as follows, as applied after the application of paragraph (6): (i) Skilled nursing facilities For skilled nursing facilities, the adjusted Federal per diem rate under section 1888(e)(4)(B). (ii) Inpatient rehabilitation facilities For inpatient rehabilitation facilities, the prospective per unit payment rate under section 1886(j)(3). (iii) Long-term care hospitals For long-term care hospitals, the standard Federal rate under section 1886(m), or, if applicable, the applicable site neutral payment rate under paragraph (6) of such section. (iv) Home health agencies For home health agencies, the standard prospective payment amount (or amounts) under section 1895(b)(3). (C) Value-based incentive payment percentage The Secretary shall specify a value-based incentive payment percentage for each PAC provider for a payment year, which may include a zero percentage but not a percentage below zero. In specifying the value-based incentive payment percentage for each PAC provider for a payment year under this subparagraph, the Secretary shall ensure that— (i) such percentage is based on the ranking of PAC composite performance score of the provider under paragraph (4) for the performance period for the payment year; (ii) the application of all such percentages for a type of PAC provider for a payment year results in an appropriate distribution of value-based incentive increases under subparagraph (A) such that— (I) PAC providers with the highest rankings under paragraph (4)(C) receive the highest value-based incentive payment percentages under this subparagraph; and (II) PAC providers with the lowest rankings under such paragraph receive the lowest value-based incentive payment percentages under this subparagraph; and (iii) the total amount of value-based incentive increases under this paragraph for all PAC providers for each type of provider in such payment year shall be at least 50 percent, but not greater than 70 percent, of the total amount of the reductions to payments for PAC providers of such type for such payment year under paragraph (6), as estimated by the Secretary. (6) Funding for value-based incentive payments (A) In general The Secretary shall reduce the payment basis (as defined in paragraph (5)(B)), not taking into account any increase under paragraph (5), for each type of PAC provider for each payment year beginning— (i) during fiscal year 2020 by 3 percent; (ii) during fiscal year 2021 by 4 percent; (iii) during fiscal year 2022 by 5 percent; (iv) during fiscal year 2023 by 6 percent; (v) during fiscal year 2024 by 7 percent; and (vi) during or after fiscal year 2025 by 8 percent. (B) Implementation The Secretary shall make such reductions for all PAC providers in the payment year involved, regardless of whether or not the PAC provider has been determined by the Secretary to have earned a value-based incentive payment increase under paragraph (5) for such payment year. (7) Announcement of net result of adjustments Under the PAC VBP Program, the Secretary shall, not later than 90 days prior to the payment year involved, inform each PAC provider of the adjustments to payments to the PAC provider for services furnished by such provider during the payment year under paragraphs (5) and (6). (8) No effect in subsequent fiscal years The value-based incentive payment increase under paragraph (5) and the payment reduction under paragraph (6) shall each apply only with respect to the payment year involved, and the Secretary shall not take into account such value-based incentive payment increase or payment reduction in making payments to a PAC provider under this title in a subsequent payment year. (9) Public reporting (A) PAC specific information The Secretary shall make available to the public, by posting on the relevant Compare Medicare website (or a successor website) in an easily understandable format, information regarding the performance of individual PAC providers under the PAC VBP Program, with respect to a payment year, including— (i) the PAC composite performance score of the PAC provider for such payment year; and (ii) the ranking of the PAC provider under paragraph (4)(C) for the performance period for such payment year. (B) Aggregate information The Secretary shall periodically post on the relevant websites referred to in subparagraph (A) aggregate information on the PAC VBP Program for the types of providers, including— (i) the range of PAC composite performance scores under paragraph (4)(B); and (ii) the number of PAC providers of each type receiving value-based incentive payment increases under paragraph (5) and the range and total amount of such value-based incentive payment increases. (10) Limitation on review There shall be no administrative or judicial review under section 1869, section 1878, or otherwise of the following: (A) The establishment of the performance standards under paragraph (3) and the performance period. (B) The methodology developed under paragraph (4) that is used to calculate PAC composite performance scores and the calculation of such scores. (C) The ranking determinations under paragraph (4)(C). (D) The methodology used to determine the value-based incentive payment percentages under paragraph (5). (E) The determination of the amount of funding available for such value-based incentive payments under paragraph (5)(C)(iii). . (b) Conforming amendments (1) SNF payment Section 1888(e)(4) of the Social Security Act ( 42 U.S.C. 1395yy(e)(4) ) is amended by adding at the end the following new subparagraph: (I) Value-based purchasing adjustment The adjusted Federal per diem rate under subparagraph (B) is subject to adjustment under paragraphs (5) and (6) of section 1899B(n). . (2) Inpatient rehabilitation facilities Section 1886(j)(3) of the Social Security Act ( 42 U.S.C. 1395ww(j)(3) ) is amended by adding at the end the following new subparagraph: (D) Value-based purchasing adjustment The prospective per unit payment rate under this paragraph is subject to adjustment under paragraphs (5) and (6) of section 1899B(n). . (3) Long-term care hospitals Section 1886(m) of the Social Security Act ( 42 U.S.C. 1395ww(m) ) is amended by adding at the end the following new paragraph: (7) Value-based purchasing adjustment The standard Federal rate under this subsection, or, if applicable, the applicable site neutral payment rate under paragraph (6), is subject to adjustment under paragraphs (5) and (6) of section 1899B(n). . (4) Home health agencies Section 1895(b)(3) of the Social Security Act ( 42 U.S.C. 1395fff(b)(3) ) is amended by adding at the end the following new subparagraph: (D) Value-based purchasing adjustment The standard prospective payment amount (or amounts) under this paragraph is subject to adjustment under paragraphs (5) and (6) of section 1899B(n). . 4. Sunsetting of skilled nursing facility value-based purchasing (SNF VBP) program Section 1888(h)(1)(B) of the Social Security Act ( 42 U.S.C. 1395yy(h)(1)(B) ) is amended— (1) in the heading, by inserting and to end in fiscal year 2025 after fiscal year 2019 ; and (2) by inserting and before October 1, 2025 after 2018 .