Given the task definition and input, reply with output. In this task, you are given text for US Congressional and California state bills, your task is to generate a summary for this bill.

SECTION 1. SHORT TITLE.

This Act may be cited as the ''Medicare Nursing Facility Pay-for-
Performance Act of 2004''.

SEC. 2. ADDITIONAL MEDICARE PAYMENT FOR FACILITIES THAT REPORT
ADDITIONAL QUALITY DATA.

(a) Voluntary Reporting of Quality Measures and Adjustment in
Payment.--
(1) In general.--Section 1888 of the Social Security Act
(42 U.S.C. 1395yy) is amended by adding at the end the
following new subsection:
''(f) Voluntary Reporting of Quality Measures; Change in Payment
Based on Reported Quality Measures.--
''(1) Establishment of additional quality measures.--
''(A) In general.--Not later than 6 months after
the date of the enactment of this subsection, the
Secretary, through a contract with a qualified
independent party (such as the National Quality Forum)
identified by the Secretary, shall provide for the
identification of--
''(i) at least 10, and not more than 15,
quality measures for the performance of skilled
nursing facilities under this title; and
''(ii) the data to be reported, including
their collection and formatting, on a calendar
quarter basis for each such quality measure to
measure the performance of a skilled nursing
facility.
Such measures may be outcome or process measures. Such
measures shall be in addition to the 14 enhanced
measures published by the Secretary for such facilities
for use as of September 1, 2004.
''(B) Measure of staffing level.--The quality
measures identified under subparagraph (A) shall
include a measure of the level of facility staffing and
the mix of licensed staff at a facility.
''(C) Risk adjustment.--The values obtained for
quality measures identified under subparagraph (A),
including the existing 14 enhanced measures, shall be
appropriately risk adjusted as applied to individual
skilled nursing facilities in order to increase the
likelihood that any differences in such values reflect
differences in the care provided by the skilled nursing
facilities and not differences in the characteristics
of the residents in such facilities. Such risk
adjustment shall take into account resident
characteristics that are related to triggering a value
for a quality measure but are not reflective of
facility care processes. Risk adjustment approaches may
include, as appropriate--
''(i) excluding certain types of residents;
''(ii) stratifying residents into high-risk
and low-risk groups; or
''(iii) statistical adjustment (such as
regression analysis) that takes into
consideration multiple characteristics
(covariates) for each resident simultaneously
and adjusts the nursing facilities' quality
measure values for different resident
characteristics.
''(D) Small facilities.--
''(i) In general.--In selecting and
applying quality measures, there shall be taken
into account the circumstances of small skilled
nursing facilities.
''(ii) Definition.--For purposes of clause
(i), the term 'small skilled nursing facility'
means a skilled nursing facility which had, in
most recent preceding cost reporting period,
fewer than 1,500 patient days with respect to
which payments were made under this title.
''(E) Annual evaluation.--The Secretary shall
provide for an annual process whereby the use of
particular quality measures are evaluated and, as
appropriate, adjusted in consultation with the National
Quality Forum.
''(F) Posting on website.--The Secretary shall
provide for the posting on its website, and the
publication at least annually, of the quality
performance of skilled nursing facilities as measured
through values reported under this subsection by such
facilities.
''(2) Adjustment in payment based on quality performance.--
''(A) In general.--For each fiscal year beginning
with fiscal year 2006, in the case of a skilled nursing
facility that reports data under paragraph (1) for the
data reporting period with respect to that fiscal year
(as defined in subparagraph (C)), the aggregate amount
of payment under this subsection shall be adjusted as
follows:
''(i) Increase of 2 percent for facilities
in top 10 percent in quality.--In the case of a
facility that, based on such data, has a
composite score for quality that is equal to or
exceeds such score for the baseline period (as
defined in subparagraph (D)) for the top 10
percent of skilled nursing facilities that have
reported such data for such baseline period,
such aggregate payment shall be increased by
such amount as reflects an increase in the
market basket percentage increase applied for
the fiscal year involved under subsection
(e)(4)(E)(ii)(V) by 2 percentage points.
''(ii) Increase of 1 percent for facilities
in next 10 percent in quality.--In the case of
a facility that, based on such data, has a
composite score for quality that exceeds such
score for the baseline period for the top 10
percent of skilled nursing facilities that have
reported such data for such baseline period,
but is equal to or exceeds such score for the
baseline period for the top 20 percent of such
skilled nursing facilities, such aggregate
payment shall be increased by such amount as
reflects an increase in the market basket
percentage increase applied for the fiscal year
involved under subsection (e)(4)(E)(ii)(V) by 1
percentage point.
''(iii) Quality threshold covering 80
percent of facilities.--For a baseline period,
the Secretary shall establish a quality
threshold score that covers 80 percent of the
skilled nursing facilities that have reported
such data for such baseline period.
''(iv) Decrease of 1 percent for facilities
below quality threshold.--In the case of a
fiscal year beginning with fiscal year 2007, in
the case of a facility that, based on such
data, has a composite score on quality measures
that is below the quality threshold score
established under clause (iii) for the baseline
period, the aggregate payment for the fiscal
year involved shall be decreased by such amount
as reflects a decrease in the market basket
percentage increase applied under subsection
(e)(4)(E)(ii)(V) by 1 percentage point.
''(v) Year by year determination.--Any
increase or decrease in payments to a skilled
nursing facility under the preceding provisions
of this subparagraph for a fiscal year shall
not affect or apply to payments to such
facility in any subsequent fiscal year.
''(B) Treatment of small facilities.--In the case
of a skilled nursing facility which because of its
small size is unable to submit data on one or more
quality measures--
''(i) the facility shall not be penalized
under this paragraph due to its non-reporting
of such data; and
''(ii) the composite rank or score shall be
based on the data so reported, with appropriate
adjustments so as to be comparable to other
facilities.
''(C) Data reporting period.--For purposes of
subparagraph (A), the term 'data reporting period'
means, with respect to--
''(i) fiscal year 2006, such period of
calendar quarters in fiscal year 2005 as the
Secretary shall specify, which, to the extent
feasible, shall be a period of at least 2
calendar quarters; or
''(ii) a subsequent fiscal year, the period
of 4 consecutive calendar quarters ending on
the June 30 preceding the fiscal year.
''(D) Baseline period.--For purposes of
subparagraph (A), the term 'baseline period' means,
with respect to--
''(i) fiscal year 2006, the period of
calendar quarters specified under subparagraph
(C)(i); or
''(ii) a subsequent fiscal year, the period
of 4-calendar-quarters ending on June 30,
2006.''.
(2) Limiting market basket increases to facilities that
voluntarily report information.--Subsection (e)(4)(E)(ii) of
such section is amended--
(A) in subclause (III), by striking ''and'' at the
end;
(B) in subclause (IV), by inserting ''before the
first fiscal year in which the reporting of quality
measures is in effect under subsection (f)(1)'' after
''each subsequent fiscal year'' and by striking the
period at the end and inserting ''; and''; and
(C) by adding at the end the following new
subclause:by inserting before the period at the end the
following:
''(V) for each subsequent year, the
rate computed for the previous fiscal
year increased, in the case of a
skilled nursing facility that reports
data under subsection (f)(1) for the
fiscal year, by the skilled nursing
facility market basket percentage for
the fiscal year involved.''.
(b) Using Fiscal Year 2005 Payment Rates as a Floor for Subsequent
Updates.--
(1) In general.--Subsection (e)(4)(E)(ii)(IV) and
subsection (e)(4)(E)(ii)(V), as added by subsection (a)(2), of
such section is amended by inserting ''(taking into account,
with respect to a previous fiscal year that was fiscal year
2005, all add-ons to such rate that were applicable in such
fiscal year as well as market basket adjustments made in
subsequent fiscal years)'' after ''the rate computed for the
previous fiscal year''.
(2) Effective date.--The amendment made by paragraph (1)
shall apply to the computation of rates for fiscal years
beginning with fiscal year 2006.

SEC. 3. LONG-TERM CARE FINANCING COMMISSION.

(a) Establishment.--There is hereby established a commission to be
known as the ''Long-Term Care Financing Commission'' (in this section
referred to as the ''Commission'').
(b) Composition.--The Commission shall be composed of 10 members
appointed by the Secretary of Health and Human Services.
(c) Duties.--
(1) Analyses.--The Commission shall conduct analyses of the
financing of long-term care, including the financing of nursing
facilities. Such analyses shall include an analysis of each of
the following:
(A) The adequacy of Medicaid program financing of
the long term care system.
(B) Medicare's cross-subsidization of long-term
care for Medicaid patients.
(C) Total industry margins in long-term care.
(D) Long-term demographic challenges.
(E) The impact of current trends, including
staffing shortages and litigation costs, on long-term
care spending.
(F) Different approaches to refinements in the per
diem RUG payment amounts and related payment
methodologies under section 1888(e) of the Social
Security Act (42 U.S.C. 1395yy(e)) .
(2) Report.--The Commission shall submit to Congress an
annual report on its analyses. Each such report shall include
recommendations for such changes in financing of long-term care
as the Commission deems appropriate.
(d) Terms, Compensation, Chairman, Meetings, Staff, and Powers.--
The provisions of subsections (c)(3), (c)(4), (c)(5), (c)(6), (d), and
(e) of section 1805 of the Social Security Act (42 U.S.C. 1395b-6)
(relating to provisions for the Medicare Payment Advisory Commission)
shall apply to the Commission in the same manner as they apply to the
Medicare Payment Advisory Commission.
Medicare Nursing Facility Pay-for-Performance Act of 2004 - Amends title XVIII (Medicare) of the Social Security Act (SSA) to direct the Secretary of Health and Human Services, through a contract with a qualified independent party (such as the National Quality Forum), to provide for identification of: (1) between ten and 15 quality measures for the performance of skilled nursing facilities under Medicare; and (2) the data to be reported, including their collection and formatting, on a calendar quarter basis for each such quality measure.

Requires the values obtained for quality measures to be appropriately risk-adjusted as applied to individual skilled nursing facilities in order to increase the likelihood that any differences in such values reflect differences in the care provided by the facilities and not differences in the characteristics of their residents.

Provides for: (1) adjusting payments for skilled nursing facilities based on quality performance, including an increase of two percent for facilities in the top ten percent in quality as well as a decrease of one percent for facilities below the quality threshold; (2) limiting market basket increases to facilities that voluntarily report information; and (3) using FY 2005 payment rates as a floor for subsequent updates.

Establishes the Long-Term Care Financing Commission to analyse and report to Congress on the financing of long-term care.