[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 2729 Introduced in Senate (IS)]







110th CONGRESS
  2d Session
                                S. 2729

  To amend title XVIII of the Social Security Act to modify Medicare 
     physician reimbursement policies to ensure a future physician 
                   workforce, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 6, 2008

  Mr. Cornyn 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 modify Medicare 
     physician reimbursement policies to ensure a future physician 
                   workforce, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Ensuring the 
Future Physician Workforce Act of 2008''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
                TITLE I--PAYMENT AND QUALITY INCENTIVES

Sec. 101. Resetting to 2007 the base year for application of 
                            sustainable growth rate formula; 
                            elimination of sustainable growth rate 
                            formula in 2010.
Sec. 102. Quality incentives.
           TITLE II--HEALTH INFORMATION TECHNOLOGY INCENTIVES

Sec. 201. Health information technology (HIT) payment incentive.
Sec. 202. Safe harbors to antikickback, civil penalties, and criminal 
                            penalties for provision of health 
                            information technology and training 
                            services.
Sec. 203. Exception to limitation on certain physician referrals (under 
                            Stark) for provision of Health Information 
                            Technology and training services to health 
                            care professionals.
Sec. 204. Rules of construction regarding use of consortia.
                   TITLE III--INFORMATION AND REPORTS

Sec. 301. Information for physicians on Medicare billings.
Sec. 302. Information for beneficiaries on Medicare expenditures.
Sec. 303. Collection of data on Medicare savings from physicians' 
                            services diversion.
Sec. 304. Trustees' ongoing examination of Medicare funding.
Sec. 305. Independent study on Medicare Relative Value Unit Scale 
                            Update Committee (RUC) process.
Sec. 306. Study of reporting requirements on health care disparities.

                TITLE I--PAYMENT AND QUALITY INCENTIVES

SEC. 101. RESETTING TO 2007 THE BASE YEAR FOR APPLICATION OF 
              SUSTAINABLE GROWTH RATE FORMULA; ELIMINATION OF 
              SUSTAINABLE GROWTH RATE FORMULA IN 2010.

    (a) In General.--Section 1848(d) of the Social Security Act (42 
U.S.C. 1395w-4(d)), as amended by section 101 of the Medicare, 
Medicaid, and SCHIP Extension Act of 2007 (Public Law 110-173), is 
amended--
            (1) in paragraph (4)--
                    (A) in subparagraph (B), by striking ``subparagraph 
                (D)'' and inserting ``subparagraphs (D) and (G)''; and
                    (B) by adding at the end the following new 
                subparagraph:
                    ``(G) Rebasing to 2007 for update adjustments 
                beginning with july 1, 2008.--In determining the update 
                adjustment factor under subparagraph (B) for 2008, for 
                the period beginning on July 1, 2008, and ending on 
                December 31, 2008, and 2009--
                            ``(i) the allowed expenditures for 2007 
                        shall be equal to the amount of the actual 
                        expenditures for physicians' services during 
                        2007;
                            ``(ii) subparagraph (B)(ii) shall not apply 
                        to 2008, for the period beginning on July 1, 
                        2008, and ending on December 31, 2008; and
                            ``(iii) the reference in subparagraph 
                        (B)(ii)(I) to `April 1, 1996' shall be treated, 
                        beginning with 2009, as a reference to `January 
                        1, 2007'.''; and
            (2) by adding at the end the following new paragraph:
            ``(9) Updating beginning with 2010.--The update to the 
        single conversion factor for each year beginning with 2010 
        shall be the percentage increase in the MEI (as defined in 
        section 1842(i)(3)) for that year.''.
    (b) Conforming Sunset.--Section 1848(f)(1)(B) of such Act is 
amended by inserting ``(ending with 2008)'' after ``each succeeding 
year''.

SEC. 102. QUALITY INCENTIVES.

    (a) Extension of Current Transitional Bonus Incentive Payments for 
2009.--Section 101(c) of division B of the Tax Relief and Health Care 
Act of 2006 (42 U.S.C. 1395w-4 note), as amended by section 101 of the 
Medicare, Medicaid, and SCHIP Extension Act of 2007 (Public Law 110-
173), is amended--
            (1) in the heading, by striking ``and 2008'' and inserting 
        ``, 2008, and 2009'';
            (2) in paragraph (1), by inserting ``(or 3 percent in the 
        case of the reporting periods beginning after December 31, 
        2008)'' after ``1.5 percent''; and
            (3) in paragraph (6)(C)--
                    (A) in clause (i), by striking ``and'' at the end;
                    (B) in clause (ii), by striking the period at the 
                end and inserting ``; and''; and
                    (C) by adding at the end the following new clause:
                    ``(III) for 2009, all of 2009.''.
    (b) Establishment of New Quality Incentive System Effective in 
2010.--
            (1) In general.--Section 1848 of the Social Security Act 
        (42 U.S.C. 1395w) is amended by striking subsection (k) and 
        inserting the following:
    ``(k) Physician Quality Incentive System.--
            ``(1) In general.--The Secretary shall establish a 
        reporting system (in this subsection referred to as the 
        `Physician Quality Incentive System' or `System') for quality 
        measures relating to physicians' services that focuses on 
        disease-specific high cost conditions. Not later than January 
        1, 2010, the Secretary shall--
                    ``(A) identify the 10 health conditions that have 
                the highest proportion of spending under this part, due 
                in part to a gap in patient care, and for which 
                reporting measures are feasible; and
                    ``(B) adopt reporting measures on these conditions, 
                based on measures developed by the Physician Consortium 
                of the American Medical Association.
            ``(2) Add-on payment.--
                    ``(A) In general.--The Secretary shall provide, in 
                a form and manner specified by the Secretary, for a 
                bonus or other add-on payment for physicians that 
                submit information required on the conditions 
                identified under paragraph (1).
                    ``(B) Amount.--Such a bonus or add-on payment shall 
                be equal to 1.0 percent of the payment amount otherwise 
                computed under this section.
                    ``(C) Timely payments.--Such a payment shall be 
                made, with respect to information submitted for a 
                month, by not later than 30 days after the date the 
                information is submitted for such month.
                    ``(D) Deductible and coinsurance not applicable.--
                Such payment shall not be subject to the deductible or 
                coinsurance otherwise applicable to physicians' 
                services under this part.
                    ``(E) Use of registry.--In carrying out 
                subparagraph (A), the Secretary shall allow the 
                submission of the required information through an 
                appropriate medical registry identified by the 
                Secretary.
            ``(3) Monitoring.--The Secretary shall monitor and report 
        to Congress on an annual basis physician participation in the 
        Physician Quality Incentive System, administrative burden 
        encountered by participants, barriers to participation, as well 
        as savings accrued to the Medicare program due to quality care 
        improvements based on measures established under the Physician 
        Quality Incentive System.''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply to payment for physicians' services for services 
        furnished in years beginning with 2010.

           TITLE II--HEALTH INFORMATION TECHNOLOGY INCENTIVES

SEC. 201. HEALTH INFORMATION TECHNOLOGY (HIT) PAYMENT INCENTIVE.

    Section 1848 of the Social Security Act is amended by adding at the 
end the following new subsection:
    ``(m) Health Information Technology Payment Incentives.--
            ``(1) Standards.--Not later than January 1, 2009, the 
        Secretary shall create standards for the certification of 
        health information technology used in the furnishing of 
        physicians' services.
            ``(2) Add-on payment.--The Secretary shall provide for a 
        bonus or other add-on payment for physicians that implement a 
        health information technology system that is certified under 
        paragraph (1). Such a bonus shall be equal to 3.0 percent of 
        the payment amount otherwise computed under this section, 
        except that--
                    ``(A) in no case may the total of such bonus and 
                the bonus provided under subsection (k)(2) exceed 6 
                percent of such payment amount; and
                    ``(B) such payments with respect to a physician 
                shall only apply to physicians' services furnished 
                during a period of 36 consecutive months beginning with 
                the first day of the first month after the date of such 
                certification.
        The bonus payment under this paragraph shall not be subject to 
        the deductible or coinsurance otherwise applicable to 
        physicians' services under this part.''.

SEC. 202. SAFE HARBORS TO ANTIKICKBACK, CIVIL PENALTIES, AND CRIMINAL 
              PENALTIES FOR PROVISION OF HEALTH INFORMATION TECHNOLOGY 
              AND TRAINING SERVICES.

    (a) For Civil Penalties.--Section 1128A of the Social Security Act 
(42 U.S.C. 1320a-7a) is amended--
            (1) in subsection (b), by adding at the end the following 
        new paragraph:
    ``(4) For purposes of this subsection, inducements to reduce or 
limit services described in paragraph (1) shall not include the 
practical or other advantages resulting from health information 
technology or related installation, maintenance, support, or training 
services.''; and
            (2) in subsection (i), by adding at the end the following 
        new paragraph:
            ``(8) The term `health information technology' means 
        hardware, software, license, right, intellectual property, 
        equipment, or other information technology (including new 
        versions, upgrades, and connectivity) designed or provided 
        primarily for the electronic creation, maintenance, or exchange 
        of health information to better coordinate care or improve 
        health care quality, efficiency, or research.''.
    (b) For Criminal Penalties.--Section 1128B of such Act (42 U.S.C. 
1320a-7b) is amended--
            (1) in subsection (b)(3)--
                    (A) in subparagraph (G), by striking ``and'' at the 
                end;
                    (B) in the subparagraph (H) added by section 237(d) 
                of the Medicare Prescription Drug, Improvement, and 
                Modernization Act of 2003 (Public Law 108-173; 117 
                Stat. 2213)--
                            (i) by moving such subparagraph 2 ems to 
                        the left; and
                            (ii) by striking the period at the end and 
                        inserting a semicolon;
                    (C) in the subparagraph (H) added by section 431(a) 
                of such Act (117 Stat. 2287)--
                            (i) by redesignating such subparagraph as 
                        subparagraph (I);
                            (ii) by moving such subparagraph 2 ems to 
                        the left; and
                            (iii) by striking the period at the end and 
                        inserting ``; and''; and
                    (D) by adding at the end the following new 
                subparagraph:
            ``(J) any nonmonetary remuneration (in the form of health 
        information technology, as defined in section 1128A(i)(8), or 
        related installation, maintenance, support, or training 
        services) made to a person by a specified entity (as defined in 
        subsection (g)) if--
                    ``(i) the provision of such remuneration is without 
                an agreement between the parties or legal condition 
                that--
                            ``(I) limits or restricts the use of the 
                        health information technology to services 
                        provided by the physician to individuals 
                        receiving services at the specified entity;
                            ``(II) limits or restricts the use of the 
                        health information technology in conjunction 
                        with other health information technology; or
                            ``(III) conditions the provision of such 
                        remuneration on the referral of patients or 
                        business to the specified entity;
                    ``(ii) such remuneration is arranged for in a 
                written agreement that is signed by the parties 
                involved (or their representatives) and that specifies 
                the remuneration solicited or received (or offered or 
                paid) and states that the provision of such 
                remuneration is made for the primary purpose of better 
                coordination of care or improvement of health quality, 
                efficiency, or research; and
                    ``(iii) the specified entity providing the 
                remuneration (or a representative of such entity) has 
                not taken any action to disable any basic feature of 
                any hardware or software component of such remuneration 
                that would permit interoperability.''; and
            (2) by adding at the end the following new subsection:
    ``(g) Specified Entity Defined.--For purposes of subsection 
(b)(3)(J), the term `specified entity' means an entity that is a 
hospital, group practice, prescription drug plan sponsor, a Medicare 
Advantage organization, or any other such entity specified by the 
Secretary, considering the goals and objectives of this section, as 
well as the goals to better coordinate the delivery of health care and 
to promote the adoption and use of health information technology.''.
    (c) Effective Date and Effect on State Laws.--
            (1) Effective date.--The amendments made by subsections (a) 
        and (b) shall take effect on the date that is 120 days after 
        the date of the enactment of this Act.
            (2) Preemption of state laws.--No State (as defined in 
        section 1101(a) of the Social Security Act (42 U.S.C. 1301(a)) 
        for purposes of title XI of such Act) shall have in effect a 
        State law that imposes a criminal or civil penalty for a 
        transaction described in section 1128A(b)(4) or section 
        1128B(b)(3)(J) of such Act, as added by subsections (a)(1) and 
        (b), respectively, if the conditions described in the 
        respective provision, with respect to such transaction, are 
        met.
    (d) Study and Report To Assess Effect of Safe Harbors on Health 
System.--
            (1) In general.--The Secretary of Health and Human Services 
        shall conduct a study to determine the impact of each of the 
        safe harbors described in paragraph (3). In particular, the 
        study shall examine the following:
                    (A) The effectiveness of each safe harbor in 
                increasing the adoption of health information 
                technology.
                    (B) The types of health information technology 
                provided under each safe harbor.
                    (C) The extent to which the financial or other 
                business relationships between providers under each 
                safe harbor have changed as a result of the safe harbor 
                in a way that adversely affects or benefits the health 
                care system or choices available to consumers.
                    (D) The impact of the adoption of health 
                information technology on health care quality, cost, 
                and access under each safe harbor.
            (2) Report.--Not later than three years after the effective 
        date described in subsection (c)(1), the Secretary of Health 
        and Human Services shall submit to Congress a report on the 
        study under paragraph (1).
            (3) Safe harbors described.--For purposes of paragraphs (1) 
        and (2), the safe harbors described in this paragraph are--
                    (A) the safe harbor under section 1128A(b)(4) of 
                such Act (42 U.S.C. 1320a-7a(b)(4)), as added by 
                subsection (a)(1); and
                    (B) the safe harbor under section 1128B(b)(3)(J) of 
                such Act (42 U.S.C. 1320a-7b(b)(3)(J)), as added by 
                subsection (b).

SEC. 203. EXCEPTION TO LIMITATION ON CERTAIN PHYSICIAN REFERRALS (UNDER 
              STARK) FOR PROVISION OF HEALTH INFORMATION TECHNOLOGY AND 
              TRAINING SERVICES TO HEALTH CARE PROFESSIONALS.

    (a) In General.--Section 1877(b) of the Social Security Act (42 
U.S.C. 1395nn(b)) is amended by adding at the end the following new 
paragraph:
            ``(6) Information technology and training services.--
                    ``(A) In general.--Any nonmonetary remuneration (in 
                the form of health information technology or related 
                installation, maintenance, support or training 
                services) made by a specified entity to a physician 
                if--
                            ``(i) the provision of such remuneration is 
                        without an agreement between the parties or 
                        legal condition that--
                                    ``(I) limits or restricts the use 
                                of the health information technology to 
                                services provided by the physician to 
                                individuals receiving services at the 
                                specified entity;
                                    ``(II) limits or restricts the use 
                                of the health information technology in 
                                conjunction with other health 
                                information technology; or
                                    ``(III) conditions the provision of 
                                such remuneration on the referral of 
                                patients or business to the specified 
                                entity;
                            ``(ii) such remuneration is arranged for in 
                        a written agreement that is signed by the 
                        parties involved (or their representatives) and 
                        that specifies the remuneration made and states 
                        that the provision of such remuneration is made 
                        for the primary purpose of better coordination 
                        of care or improvement of health quality, 
                        efficiency, or research; and
                            ``(iii) the specified entity (or a 
                        representative of such entity) has not taken 
                        any action to disable any basic feature of any 
                        hardware or software component of such 
                        remuneration that would permit 
                        interoperability.
                    ``(B) Health information technology defined.--For 
                purposes of this paragraph, the term `health 
                information technology' means hardware, software, 
                license, right, intellectual property, equipment, or 
                other information technology (including new versions, 
                upgrades, and connectivity) designed or provided 
                primarily for the electronic creation, maintenance, or 
                exchange of health information to better coordinate 
                care or improve health care quality, efficiency, or 
                research.
                    ``(C) Specified entity defined.--For purposes of 
                this paragraph, the term `specified entity' means an 
                entity that is a hospital, group practice, prescription 
                drug plan sponsor, a Medicare Advantage organization, 
                or any other such entity specified by the Secretary, 
                considering the goals and objectives of this section, 
                as well as the goals to better coordinate the delivery 
                of health care and to promote the adoption and use of 
                health information technology.''.
    (b) Effective Date; Effect on State Laws.--
            (1) Effective date.--The amendment made by subsection (a) 
        shall take effect on the date that is 120 days after the date 
        of the enactment of this Act.
            (2) Preemption of state laws.--No State (as defined in 
        section 1101(a) of the Social Security Act (42 U.S.C. 1301(a)) 
        for purposes of title XI of such Act) shall have in effect a 
        State law that imposes a criminal or civil penalty for a 
        transaction described in section 1877(b)(6) of such Act, as 
        added by subsection (a), if the conditions described in such 
        section, with respect to such transaction, are met.
    (c) Study and Report To Assess Effect of Exception on Health 
System.--
            (1) In general.--The Secretary of Health and Human Services 
        shall conduct a study to determine the impact of the exception 
        under section 1877(b)(6) of such Act (42 U.S.C. 1395nn(b)(6)), 
        as added by subsection (a). In particular, the study shall 
        examine the following:
                    (A) The effectiveness of the exception in 
                increasing the adoption of health information 
                technology.
                    (B) The types of health information technology 
                provided under the exception.
                    (C) The extent to which the financial or other 
                business relationships between providers under the 
                exception have changed as a result of the exception in 
                a way that adversely affects or benefits the health 
                care system or choices available to consumers.
                    (D) The impact of the adoption of health 
                information technology on health care quality, cost, 
                and access under the exception.
            (2) Report.--Not later than three years after the effective 
        date described in subsection (b)(1), the Secretary of Health 
        and Human Services shall submit to Congress a report on the 
        study conducted under paragraph (1).

SEC. 204. RULES OF CONSTRUCTION REGARDING USE OF CONSORTIA.

    (a) Application to Safe Harbor From Criminal Penalties.--Section 
1128B(b)(3) of the Social Security Act (42 U.S.C. 1320a-7b(b)(3)) is 
amended by adding after and below subparagraph (J), as added by section 
202(b)(1), the following: ``For purposes of subparagraph (J), nothing 
in such subparagraph shall be construed as preventing a specified 
entity, consistent with the specific requirements of such subparagraph, 
from forming a consortium composed of health care providers, payers, 
employers, and other interested entities to collectively purchase and 
donate health information technology, or from offering health care 
providers a choice of health information technology products in order 
to take into account the varying needs of such providers receiving such 
products.''.
    (b) Application to Stark Exception.--Paragraph (6) of section 
1877(b) of the Social Security Act (42 U.S.C. 1395nn(b)), as added by 
section 203(a), is amended by adding at the end the following new 
subparagraph:
                    ``(D) Rule of construction.--For purposes of 
                subparagraph (A), nothing in such subparagraph shall be 
                construed as preventing a specified entity, consistent 
                with the specific requirements of such subparagraph, 
                from--
                            ``(i) forming a consortium composed of 
                        health care providers, payers, employers, and 
                        other interested entities to collectively 
                        purchase and donate health information 
                        technology; or
                            ``(ii) offering health care providers a 
                        choice of health information technology 
                        products in order to take into account the 
                        varying needs of such providers receiving such 
                        products.''.

                   TITLE III--INFORMATION AND REPORTS

SEC. 301. INFORMATION FOR PHYSICIANS ON MEDICARE BILLINGS.

    (a) In General.--Section 1848 of the Social Security Act, as 
amended by section 201, is amended by adding at the end the following 
new subsection:
    ``(n) Annual Reporting of Information to Physicians.--
            ``(1) In general.--The Secretary shall annually report to 
        each physician information on total billings by the physician 
        (including laboratory tests and other items and services 
        ordered by the physician) under this title. Such information 
        shall be provided in a comparative format by code, weighting 
        for practice size, number of Medicare patients treated, and 
        relative number of Medicare beneficiaries in the geographical 
        area.
            ``(2) Confidentiality.--Information reported under 
        paragraph (1) is confidential and shall not be disclosed to 
        anyone other than the physician to whom the information 
        relates.
            ``(3) Report not to be used in determining reimbursement 
        rates for a specific physician.--The Secretary shall not use 
        information contained in a report under this subsection with 
        respect to a physician in determining reimbursement rates under 
        this part for items and services furnished by that 
        physician.''.
    (b) Effective Date.--The Secretary of Health and Human Services 
shall first provide for reporting of information under the amendment 
made by subsection (a) for billings during 2007.

SEC. 302. INFORMATION FOR BENEFICIARIES ON MEDICARE EXPENDITURES.

    (a) In General.--Section 1804 of the Social Security Act (42 U.S.C. 
1395b-2) is amended by adding at the end the following new subsection:
    ``(d) Annual Report on Individual Resource Utilization.--The 
Secretary shall provide for the reporting, on an annual basis, to each 
individual entitled to benefits under part A or enrolled under part B, 
on the amount of payments made to or on behalf of the individual under 
this title during the year involved. Such information shall be provided 
in a format that compares such amount with the average per capita 
expenditures in the region or area involved.''.
    (b) Effective Date.--The Secretary of Health and Human Services 
shall first provide for reporting of information under the amendment 
made by subsection (a) for payments made during 2007.

SEC. 303. COLLECTION OF DATA ON MEDICARE SAVINGS FROM PHYSICIANS' 
              SERVICES DIVERSION.

    (a) In General.--The Secretary of Health and Human Services shall 
collect data on annual savings in expenditures in the Medicare program 
due to physicians' services that resulted in hospital or in-patient 
diversion.
    (b) Report.--The Secretary shall transmit to Congress annually a 
summary of the data collected under subsection (a).

SEC. 304. TRUSTEES' ONGOING EXAMINATION OF MEDICARE FUNDING.

    (a) Examination by Board of Trustees.--The Board of Trustees of the 
Federal Hospital Insurance Trust Fund under section 1817 of the Social 
Security Act (42 U.S.C. 1395i) and of the Federal Supplementary Medical 
Insurance Trust Fund under section 1841 of such Act (42 U.S.C. 1395t) 
shall monitor and examine the extent to which the different funding 
mechanisms under parts A, B, and D of title XVIII of such Act provide 
an appropriate alignment with the program goals of the respective 
parts. Such examination shall include an analysis of each of the 
following:
            (1) The extent to which, as the volume of services 
        increases in physician settings under such part B, there is a 
        corresponding reduction in similar services provided in a 
        hospital setting under such part A.
            (2) The extent to which, as a result of increased 
        coordination between physicians and the delivery of 
        prescription drugs under such part D, particularly with respect 
        to individuals with chronic conditions, there will be a 
        decrease in hospitalizations under such part A.
            (3) The extent to which other changes in physician or other 
        health care practice results in a shifting of expenditures 
        among the various parts of such title XVIII.
    (b) Inclusion in Annual Reports.--In each annual report submitted 
to the Congress after the date of the enactment of this Act under 
section 1817(b)(2) or section 1841(b)(2) of the Social Security Act (42 
U.S.C. 1395i(b)(2), 1395t(b)(2)), such Board of Trustees shall include 
information on the matters described in subsection (a).

SEC. 305. INDEPENDENT STUDY ON MEDICARE RELATIVE VALUE UNIT SCALE 
              UPDATE COMMITTEE (RUC) PROCESS.

    (a) In General.--The Secretary of Health and Human Services shall 
enter into an arrangement with an appropriate independent entity to 
conduct a study of price inputs and relative values for physicians' 
services recommended by the AMA/Specialty Society Relative Value Unit 
Scale Update Committee (RUC) process. The study shall examine (and make 
recommendations on) how to improve accuracy in pricing the mix of 
physicians' services and how such process could improve value weighting 
as new services become available.
    (b) Report.--The Secretary shall provide for completion of the 
study under subsection (a) by January 1, 2010, and shall provide for a 
report to Congress on the results of the study.

SEC. 306. STUDY OF REPORTING REQUIREMENTS ON HEALTH CARE DISPARITIES.

    (a) In General.--The Secretary of Health and Human Services shall 
provide for a study of health care disparities in high-risk health 
condition areas and minority communities about the impact reporting 
requirements may have on physician penetration in such communities.
    (b) Report.--The Secretary shall provide for the completion of the 
study conducted under subsection (a) by not later than January 1, 2011, 
and shall submit to Congress a report on the study upon its completion.
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