SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Graduate Medical Education Reform 
Act of 2012''.

SEC. 2. MEDICARE INDIRECT MEDICAL EDUCATION PERFORMANCE ADJUSTMENT.

    Section 1886 of the Social Security Act (42 U.S.C. 1395ww) is 
amended by adding at the end the following new subsection:
    ``(t) Indirect Medical Education Performance Adjustments.--
            ``(1) In general.--Subject to the succeeding provisions of 
        this subsection, the Secretary shall establish and implement 
        procedures under which the amount of payments that a hospital 
        (as defined in paragraph (11)(A)) would otherwise receive for 
        indirect medical education costs under subsection (d)(5)(B) for 
        discharges occurring during a fiscal year is adjusted based on 
        the reporting of measures and the performance of the hospital 
        on measures of patient care priorities specified by the 
        Secretary.
            ``(2) Adjustments to begin in fiscal year 2017.--The 
        adjustments shall apply to payments for discharges occurring--
                    ``(A) with respect to the adjustments for reporting 
                under paragraph (8)(A), during fiscal year 2017; and
                    ``(B) with respect to the adjustments for 
                performance under paragraph (8)(B), on or after October 
                1, 2017.
            ``(3) Measures.--The measures of patient care priorities 
        specified by the Secretary under this subsection shall include 
        the extent of training provided in--
                    ``(A) the delivery of services categorized as 
                evaluation and management codes by the Centers for 
                Medicare & Medicaid Services;
                    ``(B) a variety of settings and systems;
                    ``(C) the coordination of patient care across 
                settings;
                    ``(D) the relevant cost and value of various 
                diagnostic and treatment options;
                    ``(E) interprofessional and multidisciplinary care 
                teams;
                    ``(F) methods for identifying system errors and 
                implementing system solutions; and
                    ``(G) the use of health information technology.
            ``(4) Measure development process.--
                    ``(A) In general.--The measures of patient care 
                specified by the Secretary under this subsection--
                            ``(i) shall--
                                    ``(I) be measures that have been 
                                adopted or endorsed by an accrediting 
                                organization (such as the Accreditation 
                                Council for Graduate Medical Education 
                                or the Commission on Osteopathic 
                                College Accreditation); and
                                    ``(II) be measures that the 
                                Secretary identifies as having used a 
                                consensus-based process for developing 
                                such measures; and
                            ``(ii) may include measures that have been 
                        submitted by teaching hospitals, medical 
                        schools, and other stakeholders.
                    ``(B) Proposed set of initial measures.--Not later 
                than July 1, 2014, the Secretary shall publish in the 
                Federal Register a proposed initial set of measures for 
                use under this subsection. The Secretary shall provide 
                for a period of public comment on such measures.
                    ``(C) Final set of initial measures.--Not later 
                than January 1, 2015, the Secretary shall publish in 
                the Federal Register the set of initial measures to be 
                specified by the Secretary for use under this 
                subsection.
                    ``(D) Update of measures.--The Secretary may, 
                through notice and comment rulemaking, periodically 
                update the measures specified under this subsection 
                pursuant to the requirements under subparagraph (A).
            ``(5) Performance standards.--The Secretary shall establish 
        performance standards with respect to measures specified by the 
        Secretary under this subsection for a performance period for a 
        fiscal year (as established under paragraph (6)).
            ``(6) Performance period.--The Secretary shall establish 
        the performance period for a fiscal year. Such performance 
        period shall begin and end prior to the beginning of such 
        fiscal year.
            ``(7) Reporting of measures.--The procedures established 
        and implemented under paragraph (1) shall include a process 
        under which hospitals shall submit data on the measures 
        specified by the Secretary under this subsection to the 
        Secretary in a form and manner, and at a time, specified by the 
        Secretary for purposes of this subsection.
            ``(8) Adjustments.--
                    ``(A) Reporting for fiscal year 2017.--For fiscal 
                year 2017, in the case of a hospital that does not 
                submit, to the Secretary in accordance with this 
                subsection, data required to be submitted under 
                paragraph (7) for a period (determined appropriate by 
                the Secretary) for such fiscal year, the total amount 
                that the hospital would otherwise receive under 
                subsection (d)(5)(B) for discharges in such fiscal year 
                shall be reduced by 0.5 percent.
                    ``(B) Performance for fiscal year 2018 and 
                subsequent fiscal years.--
                            ``(i) In general.--Subject to clause (ii), 
                        based on the performance of each hospital with 
                        respect to compliance with the measures for a 
                        performance period for a fiscal year (beginning 
                        with fiscal year 2018), the Secretary shall 
                        determine the amount of any adjustment under 
                        this subparagraph to payments to the hospital 
                        under subsection (d)(5)(B) for discharges in 
                        such fiscal year. Such adjustment may not 
                        exceed an amount equal to 3 percent of the 
                        total amount that the hospital would otherwise 
                        receive under such subsection for discharges in 
                        such fiscal year.
                            ``(ii) Budget neutral.--In making 
                        adjustments under this subparagraph, the 
                        Secretary shall ensure that the total amount of 
                        payments made to all hospitals under subsection 
                        (d)(5)(B) for discharges in a fiscal year is 
                        equal to the total amount of payments that 
                        would have been made to such hospitals under 
                        such subsection for discharges in such fiscal 
                        year if this subsection had not been enacted.
            ``(9) No effect in subsequent fiscal years.--Any adjustment 
        under subparagraph (A) or (B) of paragraph (8) shall apply only 
        with respect to the fiscal year involved, and the Secretary 
        shall not take into account any such adjustment in making 
        payments to a hospital under this section in a subsequent 
        fiscal year.
            ``(10) Evaluation of submission of performance measures.--
        Not later January 1, 2017, the Secretary shall submit to 
        Congress a report on the implementation of this subsection, 
        including--
                    ``(A) the measure development procedures, including 
                any barriers to measure development;
                    ``(B) the compliance with reporting on the 
                performance measures, including any barriers to such 
                compliance; and
                    ``(C) recommendations to address any barriers 
                described in subparagraph (A) or (B).
            ``(11) Definition of hospital.--In this subsection, the 
        term `hospital' means a hospital the receives payments under 
        subsection (d)(5)(B).''.

SEC. 3. INCREASING GRADUATE MEDICAL EDUCATION TRANSPARENCY.

    (a) In General.--Not later than 2 years after the date of the 
enactment of this Act, and annually thereafter, the Secretary of Health 
and Human Services shall submit to Congress and the National Health 
Care Workforce Commission a report on the graduate medical education 
payments that hospitals receive under the Medicare program. The report 
shall include the following information with respect to each hospital 
that receives such payments:
            (1) The direct graduate medical education payments made to 
        the hospital under section 1886(h) of the Social Security Act 
        (42 U.S.C. 1395ww(h)).
            (2) The total costs of direct graduate medical education to 
        the hospital as reported on the annual Medicare Cost Reports.
            (3) The indirect medical education payments made to the 
        hospital under section 1886(d)(5)(B) of such Act (42 U.S.C. 
        1395ww(d)(1)(B)).
            (4) The number of full-time-equivalent residents counted 
        for purposes of making the payments described in paragraph (1).
            (5) The number of full-time-equivalent residents counted 
        for purposes of making the payments described in paragraph (3).
            (6) The number of full-time-equivalent residents, if any, 
        that are not counted for purposes of making payments described 
        in paragraph (1).
            (7) The number of full-time-equivalent residents, if any, 
        that are not counted for purposes of making payments described 
        in paragraph (3).
            (8) The factors contributing to the higher costs of patient 
        care provided by the hospital, including--
                    (A) the costs of trauma, burn, other standby 
                services;
                    (B) translation services for disabled or non-
                english speaking patients;
                    (C) the cost of uncompensated care;
                    (D) financial losses with respect to Medicaid 
                patients; and
                    (E) uncompensated costs of clinical research.
Output: Graduate Medical Education Reform Act of 2012 - Amends title XVIII (Medicare) of the Social Security Act to direct the Secretary of Health and Human Services (HHS) to establish and implement procedures under which, beginning in FY2017, the amount of payments that a hospital would otherwise receive for indirect graduate medical education (GME) costs for discharges during a fiscal year is adjusted based on the hospital's performance on measures of patient care priorities.

Requires the Secretary to specify measures of patient care priorities, including the extent of training provided in: (1) the delivery of services categorized as evaluation and management codes by the Centers for Medicare and Medicaid Services, (2) a variety of settings and systems, (3) the coordination of patient care across settings, (4) the relevant cost and value of various diagnostic and treatment options, (5) interprofessionality and multidisciplinary care teams, (6) methods for identifying system errors and implementing system solutions, and (7) the use of health information technology.

Requires such measures of patient care to be: (1) adopted or endorsed by an accrediting organization, and (2) consensus-based. Allows such measures to include any submitted by teaching hospitals, medical schools, and other stakeholders.

Directs the Secretary to report to Congress and the National Health Care Workforce Commission on the GME payments hospitals receive under Medicare.