I 111th CONGRESS 1st Session H. R. 2844 IN THE HOUSE OF REPRESENTATIVES June 12, 2009 Mr. Kind (for himself, Mr. Braley of Iowa, Mr. Blumenauer, Mr. Walz, and Mr. Inslee) introduced the following bill; which was referred to the Committee on Energy and Commerce, and in addition to the Committee on Ways and Means, 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 create a value indexing mechanism for the physician work component of the Medicare physician fee schedule.

1.

Short title

This Act may be cited as the Medicare Payment Improvement Act of 2009.

2.

Value index under the Medicare physician fee schedule

(a)

In general

Section 1848(e)(5) of the Social Security Act (42 U.S.C. 1395w–4(e)) is amended by adding at the end the following new paragraph: (6)

Value index

(A)

In general

The Secretary shall determine a value index for each fee schedule area. The value index shall be the ratio of the quality component under subparagraph (B) to the cost component under subparagraph (C) for that fee schedule area. (B)

Quality component

(i)

In general

The quality component shall be based on a composite score that reflects quality measures available on a State or fee schedule area basis. The measures shall reflect health outcomes and health status for the Medicare population, patient safety, and patient satisfaction. The Secretary shall use the best data available, after consultation with the Agency for Healthcare Research and Quality and with private entities that compile quality data. (ii)

Requirement

In establishing the quality component under this subparagraph, the Secretary shall take into account the following: (I)Hospital readmission rates. (II)Hospital emergency department utilization for ambulatory care-sensitive conditions. (III)Hospital admissions for ambulatory care-sensitive conditions. (IV)Mortality amenable to health care. (V)Other items determined appropriate by the Secretary. (iii)

Establishment

The quality component for each fee schedule area shall be the ratio of the quality score for such area to the national average quality score. (iv)

Application

In the case of a fee schedule area that is less than an entire State, if available quality data is not sufficient to measure quality at the sub-State level, the quality component for a sub-State fee schedule area shall be the quality component for the entire State. (C)

Cost component

(i)

In general

The cost component shall be total annual per beneficiary Medicare expenditures under part A and this part for the fee schedule area. The Secretary may use total per beneficiary expenditures under such parts in the last two years of life as an alternative measure if the Secretary determines that such measure better takes into account severity differences among fee schedule areas. (ii)

Establishment

The cost component for a fee schedule area shall be the ratio of the cost per beneficiary for such area to the national average cost per beneficiary. . (b)

Conforming amendments

Section 1848 of the Social Security Act (42 U.S.C. 1395w–4) is amended— (1)in subparagraph (b)(1)(C), by striking geographic and inserting geographic and value; and (2)in subsection (e)— (A)in paragraph (1)— (i)in the heading, by inserting and value after geographic; (ii)in subparagraph (A), by striking clause (iii) and inserting the following new clause: (iii)a value index (as defined in paragraph (6)) applicable to physician work. ; (iii)in subparagraph (C), by inserting and value after geographic in the first sentence; (iv)in subparagraph (D), by striking physician work effort and inserting value; (v)by striking subparagraph (E); and (vi)by striking subparagraph (G); (B)by striking paragraph (2) and inserting the following new paragraph: (2)

Computation of geographic and value adjustment factor

For purposes of subsection (b)(1)(C), for all physicians’ services for each fee schedule area the Secretary shall establish a geographic and value adjustment factor equal to the sum of the geographic cost-of-practice adjustment factor (specified in paragraph (3)), the geographic malpractice adjustment factor (specified in paragraph (4)), and the value adjustment factor (specified in paragraph (5)) for the service and the area. ; and (C)by striking paragraph (5) and inserting the following new paragraph: (5)

Physician work value adjustment factor

For purposes of paragraph (2), the physician work value adjustment factor for a service for a fee schedule area, is the product of— (A)the proportion of the total relative value for the service that reflects the relative value units for the work component; and (B)the value index score for the area, based on the value index established under paragraph (6). . (c)

Availability of quality component prior to implementation

The Secretary of Health and Human Services shall make the quality component described in section 1848(c)(6)(B) of the Social Security Act, as added by subsection (a), for each fee schedule area available to the public by not later than January 1, 2011. (d)

Effective date

The amendments made by this section shall apply to the Medicare physician fee schedule for 2012 and each subsequent year.