II 111th CONGRESS 1st Session S. 438 IN THE SENATE OF THE UNITED STATES February 13, 2009 Mr. Whitehouse introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To provide for the voluntary development by States of qualifying best practices for health care and to encourage such voluntary development by amending titles XVIII and XIX of the Social Security Act to provide differential rates of payment favoring treatment provided consistent with qualifying best practices under the Medicare and Medicaid programs, and for other purposes.

1.

Short title

This Act may be cited as the Improved Medical Decision Incentive Act of 2009.

2.

Findings

Congress makes the following findings: (1)The United States spends more per capita on health care than any other nation, and yet it has mediocre health outcomes, including the second-highest infant mortality rate of all industrialized nations. (2)The efficacy of best practices guidelines in improving health care delivery and patient outcomes is well established. (3)Existing payment systems compensate physicians without adequate attention to the appropriateness or quality of care delivered and often without reference to established best practices. (4)Identification of and adherence to best practices can improve the quality of health care while reducing overall costs to the health care system. (5)Orderly administrative proceedings involving knowledgeable professionals will enhance best practices for health care. (6)Control of medical practices through denial of claims by insurance companies has proven wasteful and confusing, and has failed to motivate adequate development and use of best practices for health care.

3.

Voluntary state development and approval of qualifying best practices; incentives for private insurers

(a)

State approval of best practices

(1)

In general

A State health department may approve best practices in a course of, or as a means of treatment for, a particular condition, illness, or procedure, as the qualifying standard of care for the State in order to take advantage of the differential rates of payment implemented under sections 1899 and 1902(dd) of the Social Security Act (as added by sections 4 and 5, respectively) and the private insurance incentive under subsection (b). (2)

Qualifying process for State approval

In order for best practices approved by a State under paragraph (1) to qualify as best practices for purposes of implementing such differential rates of payment and for purposes of such private insurance incentive, a State health department shall— (A)allow any duly constituted State medical society, medical specialty group, or medical specialty board to file with the State health department a course or means of treatment representing best practices for a particular condition, illness, or procedure to be applicable in the State, including cost-effective prevention and management measures; (B)provide for notice and hearing with respect to the approval of best practices for a particular condition, illness, or procedure consistent with— (i)section 552b of title 5, United States Code (relating to open meetings), or, if applicable, equivalent State law; and (ii)the administrative procedures of the State; (C)permit any health insurer described in subsection (b)(1), including any individual authorized by the Secretary of Health and Human Services to act as a representative of the Medicare and Medicaid programs under titles XVIII and XIX, respectively, of the Social Security Act (42 U.S.C. 1395 et seq.; 1396 et seq.), to intervene in any administrative proceeding to approve such best practices; (D)provide appropriate notice of any such administrative proceeding to established advocacy groups concerned with the condition or illness involved in the proceeding; and (E)in the case where the State health department determines that a course of treatment filed in accordance with subparagraph (A) would lower system costs and improve quality of care, approve that best practices course of treatment within its jurisdiction as the qualifying standard of care under this subsection for that condition, illness, or procedure. (3)

Priority of approvals

State health departments are encouraged to prioritize approval of best practices that address conditions, illnesses, or procedures where those best practices are reasonably anticipated to result in the greatest overall cost savings and quality improvements. (4)

Approval of qualifying best practices

If, at the conclusion of a process that meets the requirements of paragraph (2), the State health department approves best practices (as described in paragraph (1)), those best practices shall be— (A)deemed qualifying best practices; (B)the basis for differential rates of payment under sections 1899 and 1902(dd) of the Social Security Act (as added by sections 4 and 5, respectively); and (C)eligible for the private insurance incentive under subsection (b). (5)

Definition of state

In this subsection the term State includes such regional or local areas as the State health department determines appropriate. (b)

Incentive for private insurers To provide timely payment for services provided in accordance with best practices

(1)

In general

Notwithstanding any other provision of law, in the case where qualifying best practices have been approved by a State health department in accordance with subsection (a), any health insurer doing business in interstate commerce and providing health care coverage within the State shall pay all provider charges for any service provided in accordance with such best practices not later than 30 days after the date on which such service is provided and, absent fraud, without regard for the insurer’s internal utilization review or claims denial procedure. (2)

Standing to enforce

Any provider or specialty group that does business in a State where the State health department has approved qualifying best practices in accordance with subsection (a) may bring a civil action in an appropriate United States district court to enjoin efforts by any health insurer to challenge or delay payment for services provided by the provider or a member of the specialty group in accordance with such best practices approved in the State. The district court shall award a provider or specialty group costs and attorney’s fees in such a civil action if the court finds that the challenge or delay was a willful violation of this Act.

4.

Implementation of differential rates of payment for qualifying best practices under the Medicare program

(a)

Differential rates of payment for qualifying best practices

Title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) is amended by adding at the end the following new section:

1899.

Differential rates of payment for qualifying best practices

(a)

In general

(1)

Differential rates of payment

Notwithstanding any other provision of law, subject to paragraph (4), the Secretary shall establish procedures to provide differential rates of payment for items and services covered under the program under this title that favor treatment provided consistent with qualifying best practices approved by a State in accordance with section 3(a) of the Improved Medical Decision Incentive Act of 2009. (2)

Regulations

Not later than March 31, 2010, the Secretary shall promulgate regulations to carry out this subsection. (3)

Budget neutrality

The Secretary shall ensure that the procedures established under paragraph (1) do not result in overall expenditures for any year under this title that are more than the expenditures which would have been made if such procedures had not been established, taking into account— (A)any savings anticipated as a result of the application of best practices to items and services covered under the program under this title; and (B)the net effects of reimbursement increases and decreases as a result of the differential in rates of payment established under such program. (4)

Exception for certain items and services

Such procedures shall not apply to payment for items and services which the Secretary determines are provided— (A)as part of a clinical trial or study; or (B)in exceptional circumstances that require non-standard care. (b)

Adoption of national best practices

(1)

In general

Such procedures shall specify that, in any case where the Secretary finds a national standard for best practices to be appropriate, the Secretary may adopt national best practices. Subject to paragraph (2), such national best practices shall be applicable within a State as a qualifying best practice in accordance with section 3(a) of the Improved Medical Decision Incentive Act of 2009 and the basis for the establishment of differential rates of payment under the program under this title. (2)

Limitation

In any case where the State health department has approved qualifying best practices in the State for a condition, illness, or procedure in accordance with such section 3(a), national best practices adopted under paragraph (1) shall only be applicable within such State as a qualifying best practice and the basis for the establishment of such differential rates of payment if the Secretary finds, after a hearing in the State that meets the procedural requirements under paragraph (2) of such section 3(a), that the national best practices will improve health care outcomes and lower health care costs in the State to a greater extent than the qualifying best practices approved by the State health department for that condition, illness, or procedure in accordance with such section 3(a).

. (b)

Effective date

The amendment made by this section shall apply to items and services furnished on or after March 31, 2010.

5.

Implementation of differential rates of payment for qualifying best practices under the Medicaid program

(a)

State plan amendment

Section 1902(a) of the Social Security Act (42 U.S.C. 1396a(a)) is amended— (1)in paragraph (70)(B)(iv), by striking and at the end; (2)in paragraph (71), by striking the period at the end and inserting ; and; and (3)by inserting after paragraph (71) the following new paragraph: (72)provide, in accordance with procedures established by the Secretary under subsection (dd) and after consultation with and upon the recommendation of the State health department (and the approval of the Secretary), for differential rates of payment for medical assistance under the plan that favor treatment provided consistent with qualifying best practices approved by the State health department in accordance with section 3(a) of the Improved Medical Decision Incentive Act of 2009, except that in establishing such payment rates, the State shall ensure that the amounts paid under such rates do not exceed the amount the State would have paid for such medical assistance under the plan if such differential rates of payment had not been made, taking into account any annual increases in population and inflation. . (b)

Establishment of procedures

Section 1902 of the Social Security Act (42 U.S.C. 1396a) is amended by adding at the end the following new subsection: (dd)

Differential rates of payment for qualifying best practices and adoption of national best practices

(1)

Differential rates of payment for qualifying best practices

(A)

In general

Notwithstanding any other provision of law, subject to subparagraph (D), the Secretary shall establish procedures to provide differential rates of payment for medical assistance provided consistent with qualifying best practices approved by a State in accordance with section 3(a) of the Improved Medical Decision Incentive Act of 2009. (B)

Regulations

Not later than March 31, 2010, the Secretary shall promulgate regulations to carry out this subsection. (C)

Budget neutrality

The Secretary shall ensure that the procedures established under subparagraph (A) do not result in overall expenditures for any year under a State plan that are more than the expenditures which would have been made if such procedures had not been established, taking into account— (i)any savings anticipated as a result of the application of best practices to medical assistance provided under the State plan; and (ii)the net effects of reimbursement increases and decreases as a result of the differential rates of payment established under such plan. (D)

Exception for certain items and services

Such procedures shall not apply to payment for medical assistance which the Secretary determines is provided— (i)as part of a clinical trial or study; or (ii)in exceptional circumstances that require non-standard care. (2)

Adoption of national best practices

Such procedures shall specify that, in any case where the Secretary adopts national best practices in accordance with section 1899(b), subject to the limitation under paragraph (2) of such section, such national best practices shall be— (A)applicable within a State as a qualifying best practice in accordance with section 3(a) of the Improved Medical Decision Incentive Act of 2009; and (B)the basis for the establishment of differential rates of payment under the State plan. . (c)

Effective date

(1)

In general

Except as provided in paragraph (2), the amendments made by this section shall apply to medical assistance furnished on or after March 31, 2010. (2)

Extension of effective date for state law amendment

In the case of a State plan under title XIX of the Social Security Act (42 U.S.C. 1396 et seq.) which the Secretary of Health and Human Services determines requires State legislation in order for the plan to meet the additional requirements imposed by the amendments made by this section, the State plan shall not be regarded as failing to comply with the requirements of such title solely on the basis of its failure to meet these additional requirements before the first day of the first calendar quarter beginning after the close of the first regular session of the State legislature that begins after the date of enactment of this Act. For purposes of the previous sentence, in the case of a State that has a 2-year legislative session, each year of the session is considered to be a separate regular session of the State legislature.

6.

Oversight by the Centers for Medicare & Medicaid Services

(a)

Review and report

(1)

Review

(A)

In general

The Secretary shall conduct an annual review of the efficacy of all qualifying best practices approved pursuant to section 3(a) and, if applicable, any national best practices adopted pursuant to section 1899(b) of the Social Security Act, as added by section 4(a). (B)

Considerations

The review conducted under subparagraph (A) shall consider— (i)the effect of such best practices with respect to improving outcomes and lowering the cost of care; and (ii)the effect and efficacy of differential rates of payment under the Medicare and Medicaid programs under titles XVIII and XIX, respectively, of the Social Security Act (42 U.S.C. 1395 et seq.; 1396 et seq.) under procedures established pursuant to the amendments made by sections 4 and 5. (2)

Report

The Secretary shall submit an annual report to Congress containing the results of the review conducted under paragraph (1)(A), together with recommendations for such legislation and administrative actions as the Secretary determines appropriate. (b)

Annual conference

The Secretary shall host an annual conference of all State health directors, and any State medical societies and medical specialty groups that have filed best practices for approval with a State health department in accordance with subparagraph (A) of section 3(a)(2) and any health insurers and advocacy groups that have participated in any administrative proceeding to approve best practices in accordance with subparagraphs (C) and (D), respectively, of such section, to provide— (1)for the exchange of information; and (2)an opportunity to summarize the effects on health care costs, quality, and outcomes of qualifying best practices approved in accordance with section 3(a) prior to the date on which the conference is held. (c)

Authorization

There are authorized to be appropriated such sums as may be necessary for the purpose of carrying out this section. (d)

Definition of Secretary

In this section, the term Secretary means the Secretary of Health and Human Services, acting through the Administrator of the Centers for Medicare & Medicaid Services.