[House Report 113-257]
[From the U.S. Government Publishing Office]
113th Congress Rept. 113-257
HOUSE OF REPRESENTATIVES
1st Session Part 1
======================================================================
MEDICARE PATIENT ACCESS AND QUALITY IMPROVEMENT ACT OF 2013
_______
November 12, 2013.--Ordered to be printed
_______
Mr. Upton, from the Committee on Energy and Commerce, submitted the
following
R E P O R T
[To accompany H.R. 2810]
[Including cost estimate of the Congressional Budget Office]
The Committee on Energy and Commerce, to whom was referred
the bill (H.R. 2810) to amend title XVIII of the Social
Security Act to reform the sustainable growth rate and Medicare
payment for physicians' services, and for other purposes,
having considered the same, report favorably thereon with an
amendment and recommend that the bill as amended do pass.
CONTENTS
Page
Purpose and Summary.............................................. 22
Background and Need for Legislation.............................. 23
Hearings......................................................... 26
Committee Consideration.......................................... 27
Committee Votes.................................................. 27
Committee Oversight Findings..................................... 29
Statement of General Performance Goals and Objectives............ 29
New Budget Authority, Entitlement Authority, and Tax Expenditures 31
Earmark, Limited Tax Benefits, and Limited Tariff Benefits....... 31
Committee Cost Estimate.......................................... 31
Congressional Budget Office Estimate............................. 31
Federal Mandates Statement....................................... 39
Duplication of Federal Programs.................................. 39
Disclosure of Directed Rule Makings.............................. 39
Advisory Committee Statement..................................... 39
Applicability to Legislative Branch.............................. 39
Section-by-Section Analysis of the Legislation................... 39
Changes in Existing Law Made by the Bill, as Reported............ 42
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Medicare Patient
Access and Quality Improvement Act of 2013''.
(b) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. Reform of sustainable growth rate (SGR) and Medicare payment
for physicians' services.
Sec. 3. Expanding availability of Medicare data.
Sec. 4. Encouraging care coordination and medical homes.
Sec. 5. Miscellaneous.
SEC. 2. REFORM OF SUSTAINABLE GROWTH RATE (SGR) AND MEDICARE PAYMENT
FOR PHYSICIANS' SERVICES.
(a) Stabilizing Fee Updates (phase I).--
(1) Repeal of sgr payment methodology.--Section 1848 of the
Social Security Act (42 U.S.C. 1395w-4) is amended--
(A) in subsection (d)--
(i) in paragraph (1)(A), by inserting ``or a
subsequent paragraph or section 1848A'' after
``paragraph (4)''; and
(ii) in paragraph (4)--
(I) in the heading, by striking
``years beginning with 2001'' and
inserting ``2001, 2002, and 2003''; and
(II) in subparagraph (A), by striking
``a year beginning with 2001'' and
inserting ``2001, 2002, and 2003''; and
(B) in subsection (f)--
(i) in paragraph (1)(B), by inserting
``through 2013'' after ``of each succeeding
year''; and
(ii) in paragraph (2), by inserting ``and
ending with 2013'' after ``beginning with
2000''.
(2) Update of rates for 2014 through 2018.--Subsection (d) of
section 1848 of the Social Security Act (42 U.S.C. 1395w-4) is
amended by adding at the end the following new paragraph:
``(15) Update for 2014 through 2018.--The update to the
single conversion factor established in paragraph (1)(C) for
each of 2014 through 2018 shall be 0.5 percent.''.
(b) Quality Update Incentive Program (phase II).--
(1) In general.--Section 1848 of the Social Security Act (42
U.S.C. 1395w-4), as amended by subsection (a), is further
amended--
(A) in subsection (d), by adding at the end the
following new paragraph:
``(16) Update beginning with 2019.--
``(A) In general.--Subject to subparagraph (B), the
update to the single conversion factor established in
paragraph (1)(C) for each year beginning with 2019
shall be 0.5 percent.
``(B) Adjustment.--In the case of an eligible
professional (as defined in subsection (k)(3)) who does
not have a payment arrangement described in section
1848A(a) in effect, the update under subparagraph (A)
for a year beginning with 2019 shall be adjusted by the
applicable quality adjustment determined under
subsection (q)(3) for the year involved.''; and
(B) in subsection (i)(1)--
(i) by striking ``and'' at the end of
subparagraph (D);
(ii) by striking the period at the end of
subparagraph (E) and inserting ``, and''; and
(iii) by adding at the end the following new
subparagraph:
``(F) the implementation of subsection (q).''.
(2) Enhancing physician quality reporting system to support
quality update incentive program.--Section 1848 of the Social
Security Act (42 U.S.C. 1395w-4) is amended--
(A) in subsection (k)(1), in the first sentence, by
inserting ``and, if applicable, clinical practice
improvement activities,'' after ``quality measures'';
(B) in subsection (k)(2)--
(i) in subparagraph (C)--
(I) in the subparagraph heading, by
striking ``and subsequent years'' and
inserting ``through 2018''; and
(II) in clause (i), by inserting
``(before 2019)'' after ``subsequent
year'';
(ii) by redesignating subparagraph (D) as
subparagraph (E);
(iii) by inserting after subparagraph (C) the
following new subparagraph:
``(D) For 2019 and subsequent years.--For purposes of
reporting data on quality measures and, as applicable
clinical practice improvement activities, for covered
professional services furnished during the performance
period (as defined in subsection (q)(2)(B)) with
respect to 2019 and the performance period with respect
to each subsequent year, subject to subsection
(q)(1)(D), the quality measures and clinical practice
improvement activities specified under this paragraph
shall be, with respect to an eligible professional, the
quality measures and, as applicable, clinical practice
improvement activities within the final core measure
set under paragraph (9)(F) applicable to the peer
cohort of such provider and year involved.''; and
(iv) in subparagraph (E), as redesignated by
subparagraph (B)(ii) of this paragraph, by
striking ``and subsequent years'';
(C) in subsection (k)(3)--
(i) in the paragraph heading, by striking
``Covered professional services and eligible
professionals defined'' and inserting
``Definitions''; and
(ii) by adding at the end the following new
subparagraphs:
``(C) Clinical practice improvement activities.--The
term `clinical practice improvement activity' means an
activity that relevant eligible professional
organizations and other relevant stakeholders identify
as improving clinical practice or care delivery and
that the Secretary determines, when effectively
executed, is likely to result in improved outcomes.
``(D) Eligible professional organization.--The term
`eligible professional organization' means a
professional organization as defined by nationally
recognized multispecialty boards of certification or
equivalent certification boards.
``(E) Peer cohort.--The term `peer cohort' means a
peer cohort identified on the list under paragraph
(9)(B), as updated under clause (ii) of such
paragraph.'';
(D) in subsection (k)(7), by striking `` and the
application of paragraphs (4) and (5)'' and inserting
``, the application of paragraphs (4) and (5), and the
implementation of paragraph (9)'';
(E) by adding at the end of subsection (k) the
following new paragraph:
``(9) Establishment of final core measure sets.--
``(A) In general.--Under the system under this
subsection--
``(i) for each peer cohort identified under
subparagraph (B) and in accordance with this
paragraph, there shall be published a final
core measure set under subparagraph (F), which
shall consist of quality measures and may also
consist of clinical practice improvement
activities, with respect to which eligible
professionals shall, subject to subsection
(m)(3)(C), be assessed for purposes of
determining, for years beginning with 2019, the
quality adjustment under subsection (q)(3)
applicable to such professionals; and
``(ii) each eligible professional shall self-
identify, in accordance with subparagraph (B),
within such a peer cohort for purposes of such
assessments.
``(B) Peer cohorts.--The Secretary shall identify
(and publish a list of) peer cohorts by which eligible
professionals shall self-identify for purposes of this
subsection and subsection (q) with respect to a
performance period (as defined in subsection (q)(2)(B))
for a year beginning with 2019. For purposes of this
subsection and subsection (q), the Secretary shall
develop one or more peer cohorts for multispecialty
groups, each of which shall be included as a peer
cohort under this subparagraph. Such self-
identification will be made through such a process and
at such time as specified under the system under this
subsection. Such list--
``(i) shall include, as peer cohorts,
provider specialties defined by nationally
recognized multispecialty boards of
certification or equivalent certification
boards and such other cohorts as established
under this section in order to capture
classifications of providers across eligible
professional organizations and other practice
areas, groupings, or categories; and
``(ii) shall be updated from time to time.
``(C) Quality measures for core measure sets.--
``(i) Development.--Under the system under
this subsection there shall be established a
process for the development of quality measures
under this subparagraph for purposes of
potential inclusion of such measures in core
measure sets under this paragraph. Under such
process--
``(I) there shall be coordination, to
the extent possible, across
organizations developing such measures;
``(II) eligible professional
organizations and other relevant
stakeholders may submit best practices
and clinical practice guidelines for
the development of quality measures
that address quality domains (as
defined under clause (ii)) for
potential inclusion in such core
measure sets;
``(III) there is encouraged to be
developed, as appropriate, meaningful
outcome measures (or quality of life
measures in cases for which outcomes
may not be a valid measurement),
functional status measures, and patient
experience measures; and
``(IV) measures developed under this
clause shall be developed, to the
extent possible, in accordance with
best practices and clinical practice
guidelines.
``(ii) Quality domains.--For purposes of this
paragraph, the term `quality domains' means at
least the following domains:
``(I) Clinical care.
``(II) Safety.
``(III) Care coordination.
``(IV) Patient and caregiver
experience.
``(V) Population health and
prevention.
``(D) Process for establishing core measure sets.--
``(i) In general.--Under the system under
this subsection, for purposes of subparagraph
(A), there shall be established a process to
approve final core measure sets under this
paragraph for peer cohorts. Each such final
core measure set shall be composed of quality
measures (and, as applicable, clinical practice
improvement activities) with respect to which
eligible professionals within such peer cohort
shall report under this subsection and be
assessed under subsection (q). Such process
shall provide--
``(I) for the establishment of
criteria, which shall be made publicly
available before the request is made
under clause (ii), for selecting such
measures and activities for potential
inclusion in such a final core measure
set; and
``(II) that all peer cohorts, and to
the extent practicable all quality
domains, are addressed by measures and,
as applicable, clinical practice
improvement activities selected to be
included in a core measure set under
this paragraph, which may include
through the use of such a measure or
clinical practice improvement activity
that addresses more than one such
domain or cohort.
``(ii) Solicitation of public input on
quality measures and clinical practice
improvement activities.--Under the process
established under clause (i), relevant eligible
professional organizations and other relevant
stakeholders shall be requested to identify and
submit quality measures and clinical practice
improvement activities (as defined in paragraph
(3)(C)) for selection under this paragraph. For
purposes of the previous sentence, measures and
activities may be submitted regardless of
whether such measures were previously published
in a proposed rule or endorsed by an entity
with a contract under section 1890(a).
``(E) Core measure sets.--
``(i) In general.--Under the process
established under subparagraph (D)(i), the
Secretary--
``(I) shall select, from quality
measures described in clause (ii)
applicable to a peer cohort, quality
measures to be included in a core
measure set for such cohort;
``(II) shall, to the extent there are
insufficient quality measures
applicable to a peer cohort to address
one or more applicable quality domains,
select to be included in a core measure
set for such cohort such clinical
practice improvement activities
described in clause (ii)(IV) as are
needed and available to sufficiently
address such an applicable domain with
respect to such peer cohort; and
``(III) may select, to the extent
determined appropriate, any additional
clinical practice improvement
activities described in clause (ii)(IV)
applicable to a peer cohort to be
included in a core measure set for such
cohort.
Activities selected under this paragraph shall
be selected with consideration of best
practices and clinical practice guidelines
identified under subparagraph (C)(i)(II).
``(ii) Sources of quality measures and
clinical practice improvement activities.--A
quality measure or clinical practice
improvement activity selected for inclusion in
a core measure set under the process under
subparagraph (D)(i) shall be--
``(I) a measure endorsed by a
consensus-based entity;
``(II) a measure developed under
paragraph (2)(C) or a measure otherwise
applied or developed for a similar
purpose under this section;
``(III) a measure developed under
subparagraph (C); or
``(IV) a measure or activity
submitted under subparagraph (D)(ii).
A measure or activity may be selected under
this subparagraph, regardless of whether such
measure or activity was previously published in
a proposed rule. A measure so selected shall be
evidence-based but (other than a measure
described in subclause (I)) shall not be
required to be consensus-based.
``(iii) Transparency.--Before publishing in a
final regulation a core measure set under
clause (i) as a final core measure set under
subparagraph (F), the Secretary shall--
``(I) submit for publication in
applicable specialty-appropriate peer-
reviewed journals such core measure set
under clause (i) and the method for
developing and selecting measures
within such set, including clinical and
other data supporting such measures,
and, as applicable, the method for
selecting clinical practice improvement
activities included within such set;
and
``(II) regardless of whether or not
the core measure set or method is
published in such a journal under
subclause (I), provide for notice of
the proposed regulation in the Federal
Register, including with respect to the
applicable methods and data described
in subclause (I), and a period for
public comment thereon.
``(F) Final core measure sets.--Not later than
November 15 of the year prior to the first day of a
performance period, the Secretary shall publish a final
regulation in the Federal Register that includes a
final core measure set (and the applicable methods and
data described in subparagraph (E)(iii)(I)) for each
peer cohort to be applied for such performance period.
``(G) Periodic review and updates.--
``(i) In general.--In carrying out this
paragraph, under the system under this
subsection, there shall periodically be
reviewed--
``(I) the quality measures and
clinical practice improvement
activities selected for inclusion in
final core measure sets under this
paragraph for each year such measures
and activities are to be applied under
this subsection or subsection (q) to
ensure that such measures and
activities continue to meet the
conditions applicable to such measures
and activities for such selection; and
``(II) the final core measure sets
published under subparagraph (F) for
each year such sets are to be applied
to peer cohorts of eligible
professionals to ensure that each
applicable set continues to meet the
conditions applicable to such sets
before being so published.
``(ii) Collaboration with stakeholders.--In
carrying out clause (i), relevant eligible
professional organizations and other relevant
stakeholders may identify and submit updates to
quality measures and clinical practice
improvement activities selected under this
paragraph for inclusion in final core measure
sets as well as any additional quality measures
and clinical practice improvement activities.
Not later than November 15 of the year prior to
the first day of a performance period,
submissions under this clause shall be
reviewed.
``(iii) Additional, and updates to, measures
and activities.--Based on the review conducted
under this subparagraph for a period, as
needed, there shall be--
``(I) selected additional, and
updates to, quality measures and
clinical practice improvement
activities selected under this
paragraph for potential inclusion in
final core measure sets in the same
manner such quality measures and
clinical practice improvement
activities are selected under this
paragraph for such potential inclusion;
``(II) removed, from final core
measure sets, quality measures and
clinical practice improvement
activities that are no longer
meaningful; and
``(III) updated final core measure
sets published under subparagraph (F)
in the same manner as such sets are
approved under such subparagraph.
For purposes of this subsection and subsection
(q), a final core measure set, as updated under
this subparagraph, shall be treated in the same
manner as a final core measure set published
under subparagraph (F).
``(iv) Transparency.--
``(I) Notification required for
certain updates.--In the case of an
update under subclause (II) or (III) of
clause (iii) that adds, materially
changes, or removes a measure or
activity from a measure set, such
update shall not apply under this
subsection or subsection (q) unless
notification of such update is made
available to applicable eligible
professionals.
``(II) Public availability of updated
final core measure sets.--Subparagraph
(E)(iii) shall apply with respect to
measure sets updated under subclause
(II) or (III) of clause (iii) in the
same manner as such subparagraph
applies to applicable core measure sets
under subparagraph (E).
``(H) Coordination with existing programs.--The
development and selection of quality measures and
clinical practice improvement activities under this
paragraph shall, as appropriate, be coordinated with
the development and selection of existing measures and
requirements, such as the development of the Physician
Compare Website under subsection (m)(5)(G) and the
application of resource use management under subsection
(n). To the extent feasible, such measures and
activities shall align with measures used by other
payers and with measures and activities in use under
other programs in order to streamline the process of
such development and selection under this paragraph.
The Secretary shall develop a plan to integrate
reporting on quality measures under this subsection
with reporting requirements under subsection (o)
relating to the meaningful use of certified EHR
technology.
``(I) Consultation with relevant eligible
professional organizations and other relevant
stakeholders.--Relevant eligible professional
organizations (as defined in paragraph (3)(D)) and
other relevant stakeholders, including State and
national medical societies, shall be consulted in
carrying out this paragraph.
``(J) Optional application.--The process under
section 1890A is not required to apply to the
development or selection of measures under this
paragraph.''; and
(F) in subsection (m)(3)(C)(i), by adding at the end
the following new sentence: ``Such process shall,
beginning for 2019, treat eligible professionals in
such a group practice as reporting on measures for
purposes of application of subsections (q) and
(a)(8)(A)(iii) if, in lieu of reporting measures under
subsection (k)(2)(D), the group practice reports
measures determined appropriate by the Secretary.''.
(3) Establishment of quality update incentive program.--
(A) In general.--Section 1848 of the Social Security
Act (42 U.S.C. 1395w-4) is amended by adding at the end
the following new subsection:
``(q) Quality Update Incentive Program.--
``(1) Establishment.--
``(A) In general.--The Secretary shall establish an
eligible professional quality update incentive program
(in this section referred to as the `quality update
incentive program') under which--
``(i) there is developed and applied, in
accordance with paragraph (2), appropriate
methodologies for assessing the performance of
eligible professionals with respect to quality
measures and clinical practice improvement
activities included within the final core
measure sets published under subsection
(k)(9)(F) applicable to the peer cohorts of
such providers;
``(ii) there is applied, consistent with the
system under subsection (k), methods for
collecting information needed for such
assessments (which shall involve the minimum
amount of administrative burden required to
ensure reliable results); and
``(iii) the applicable update adjustments
under paragraph (3) are determined by such
assessments.
``(B) Definitions.--
``(i) Eligible professional.--In this
subsection, the term `eligible professional'
has the meaning given such term in subsection
(k)(3), except that such term shall not include
a professional who has a payment arrangement
described in section 1848A(a)(1) in effect.
``(ii) Peer cohorts; clinical practice
improvement activities; eligible professional
organizations.--In this subsection, the terms
`peer cohort', `clinical practice improvement
activity', and `eligible professional
organization' have the meanings given such
terms in subsection (k)(3).
``(C) Consultation with eligible professional
organizations and other relevant stakeholders.--
Eligible professional organizations and other relevant
stakeholders, including State and national medical
societies, shall be consulted in carrying out this
subsection.
``(D) Application at group practice level.--The
Secretary shall establish a process, consistent with
subsection (m)(3)(C), under which the provisions of
this subsection are applied to eligible professionals
in a group practice if the group practice reports
measures determined appropriate by the Secretary under
such subsection.
``(E) Coordination with existing programs.--The
application of measures and clinical practice
improvement activities and assessment of performance
under this subsection shall, as appropriate, be
coordinated with the application of measures and
assessment of performance under other provisions of
this section.
``(2) Assessing performance with respect to final core
measure sets for applicable peer cohorts.--
``(A) Establishment of methods for assessment.--
``(i) In general.--Under the quality update
incentive program, the Secretary shall--
``(I) establish one or more methods,
applicable with respect to a
performance period, to assess (using a
scoring scale of 0 to 100) the
performance of an eligible professional
with respect to, subject to paragraph
(1)(D), quality measures and clinical
practice improvement activities
included within the final core measure
set published under subsection
(k)(9)(F) applicable for the period to
the peer cohort in which the provider
self-identified under subsection
(k)(9)(B) for such period; and
``(II) subject to paragraph (1)(D),
compute a composite score for such
provider for such performance period
with respect to the measures and
activities included within such final
core measure set.
``(ii) Methods.--Such methods shall, with
respect to an eligible professional, provide
that the performance of such professional
shall, subject to paragraph (1)(D), be assessed
for a performance period with respect to the
quality measures and clinical practice
improvement activities within the final core
measure set for such period for the peer cohort
of such professional and on which information
is collected from such professional.
``(iii) Weighting of measures.--Such a method
may provide for the assignment of different
scoring weights or, as appropriate, other
factors--
``(I) for quality measures and
clinical practice improvement
activities;
``(II) based on the type or category
of measure or activity; and
``(III) based on the extent to which
a quality measure or clinical practice
improvement activity meaningfully
assesses quality.
``(iv) Risk adjustment.--Such a method shall
provide for appropriate risk adjustments.
``(v) Incorporation of other methods of
measuring physician quality.--In establishing
such methods, there shall be, as appropriate,
incorporated comparable methods of measurement
from physician quality incentive programs under
this subsection.
``(B) Performance period.--There shall be established
a period (in this subsection referred to as a
`performance period'), with respect to a year
(beginning with 2019) for which the quality adjustment
is applied under paragraph (3), to assess performance
on quality measures and clinical practice improvement
activities. Each such performance period shall be a
period of 12 consecutive months and shall end as close
as possible to the beginning of the year for which such
adjustment is applied.
``(3) Quality adjustment taking into account quality
assessments.--
``(A) Quality adjustment.--For purposes of subsection
(d)(16), if the composite score computed under
paragraph (2)(A) for an eligible professional for a
year (beginning with 2019) is--
``(i) a score of 67 or higher, the quality
adjustment under this paragraph for the
eligible professional and year is 1 percentage
point;
``(ii) a score of at least 34, but below 67,
the quality adjustment under this paragraph for
the eligible professional and year is zero; or
``(iii) a score below 34, the quality
adjustment under this paragraph for the
eligible professional and year is -1 percentage
point.
``(B) No effect on subsequent years' quality
adjustments.--Each such quality adjustment shall be
made each year without regard to the quality adjustment
for a previous year under this paragraph.
``(4) Transition for new eligible professionals.--In the case
of a physician, practitioner, or other supplier that during a
performance period, with respect to a year for which a quality
adjustment is applied under paragraph (3), first becomes an
eligible professional (and had not previously submitted claims
under this title as a person, as an entity, or as part of a
physician group or under a different billing number or tax
identifier), the quality adjustment under this subsection
applicable to such physician, practitioner, or supplier--
``(A) for such year, with respect to such first
performance period, shall be zero; and
``(B) for a year, with respect to a subsequent
performance period, shall be the quality adjustment
that would otherwise be applied under this subsection.
``(5) Feedback.--
``(A) Feedback.--
``(i) Ongoing feedback.--Under the process
under subsection (m)(5)(H), there shall be
provided, as real time as possible, but at
least quarterly, beginning not later than 6
months after the first day of the first
performance period, to each eligible
professional feedback--
``(I) on the performance of such
provider with respect to quality
measures and clinical practice
improvement activities within the final
core measure set published under
subsection (k)(9)(F) for the applicable
performance period and the peer cohort
of such professional; and
``(II) to assess the progress of such
professional under the quality update
incentive program with respect to a
performance period for a year.
``(ii) Use of registries and other
mechanisms.--Feedback under this subparagraph
shall, to the extent an eligible professional
chooses to participate in a data registry for
purposes of this subsection (including
registries under subsections (k) and (m)), be
provided and based on performance received
through the use of such registry, and to the
extent that an eligible professional chooses
not to participate in such a registry for such
purposes, be provided through other similar
mechanisms that allow for the provision of such
feedback and receipt of such performance
information.
``(B) Data mechanism.--Under the quality update
incentive program, there shall be developed an
electronic interactive eligible professional mechanism
through which such a professional may receive
performance data, including data with respect to
performance on the measures and activities developed
and selected under this section. Such mechanism shall
be developed in consultation with private payers and
health insurance issuers (as defined in section
2791(b)(2) of the Public Health Service Act) as
appropriate.
``(C) Transfer of funds.--The Secretary shall provide
for the transfer of $100,000,000 from the Federal
Supplementary Medical Insurance Trust Fund established
in section 1841 to the Center for Medicare & Medicaid
Services Program Management Account to support such
efforts to develop the infrastructure as necessary to
carry out subsection (k)(9) and this subsection and for
purposes of section 1889(h). Such funds shall be so
transferred on the date of the enactment of this
subsection and shall remain available until
expended.''.
(B) Incentive to report under quality update
incentive program.--Section 1848(a)(8)(A) of the Social
Security Act (42 U.S.C. 1395w-4(a)(8)(A)) is amended--
(i) in clause (i), by striking ``With respect
to'' and inserting ``Subject to clause (iii),
with respect to''; and
(ii) by adding at the end the following new
clause:
``(iii) Application to eligible professionals
not reporting.--With respect to covered
professional services (as defined in subsection
(k)(3)) furnished by an eligible professional
during 2019 or any subsequent year, if the
eligible professional does not submit data for
the performance period (as defined in
subsection (q)(2)(B)) with respect to such year
on, subject to subsection (q)(1)(D), the
quality measures and, as applicable, clinical
practice improvement activities within the
final core measure set under subsection
(k)(9)(F) applicable to the peer cohort of such
provider, the fee schedule amount for such
services furnished by such professional during
the year (including the fee schedule amount for
purposes of determining a payment based on such
amount) shall be equal to 95 percent (in lieu
of the applicable percent) of the fee schedule
amount that would otherwise apply to such
services under this subsection (determined
after application of paragraphs (3), (5), and
(7), but without regard to this paragraph). The
Secretary shall develop a minimum per year
caseload threshold, with respect to eligible
professionals, and the previous sentence shall
not apply to eligible professionals with a
caseload for a year below such threshold for
such year.''.
(C) Education on quality update incentive program.--
Section 1889 of the Social Security Act (42 U.S.C.
1395zz) is amended by adding at the end the following
new subsection:
``(h) Quality Update Incentive Program.--Under this section,
information shall be disseminated to educate and assist eligible
professionals (as defined in section 1848(k)(3)) about the quality
update incentive program under section 1848(q) and quality measures
under section 1848(k)(9) through multiple approaches, including a
national dissemination strategy and outreach by medicare
contractors.''.
(4) Conforming amendments.--
(A) Treatment of satisfactorily reporting pqrs
measures through participation in a qualified clinical
data registry.--Section 1848(m)(3)(D) of the Social
Security Act (42 U.S.C. 1395w-4(m)(3)(D)) is amended by
striking ``For 2014 and subsequent years'' and
inserting ``For each of 2014 through 2018''.
(B) Coordinating enhanced pqrs reporting with ehr.--
Section 1848(o)(2)(B)(iii) of the Social Security Act
(42 U.S.C. 1395w-4(o)(2)(B)(iii)) is amended by
striking ``subsection (k)(2)(C)'' and inserting
``subparagraph (C) or (D) of subsection (k)(2)''.
(C) Coordinating pqrs reporting period with quality
update incentive program performance period.--Section
1848(m)(6)(C) of the Social Security Act (42 U.S.C.
1395w-4(m)(6)(C)) is amended--
(i) in clause (i), by striking ``and (iii)''
and inserting ``, (iii), and (iv)''; and
(ii) by adding at the end the following new
clause:
``(iv) Coordination with quality update
incentive program.--For 2019 and each
subsequent year the reporting period shall be
coordinated with the performance period under
subsection (q)(2)(B).''.
(D) Coordinating ehr reporting with quality update
incentive program performance period.--Section
1848(o)(5)(B) of the Social Security Act (42 U.S.C.
1395w-4(o)(5)(B)) is amended by adding at the end the
following: ``Beginning for 2019, the EHR reporting
period shall be coordinated with the performance period
under subsection (q)(2)(B).''.
(c) Advancing Alternative Payment Models.--
(1) In general.--Part B of title XVIII of the Social Security
Act (42 U.S.C. 1395w-4 et seq.) is amended by adding at the end
the following new section:
``SEC. 1848A. ADVANCING ALTERNATIVE PAYMENT MODELS.
``(a) Payment Model Choice Program.--Payment for covered professional
services (as defined in section 1848(k)) that are furnished by an
eligible professional (as defined in such section) under an Alternative
Payment Model specified on the list under subsection (h) (in this
section referred to as an `eligible APM') shall be made under this
title in accordance with the payment arrangement under such model. In
applying the previous sentence, such a professional with such a payment
arrangement in effect, shall be deemed for purposes of section
1848(a)(8) to be satisfactorily submitting data on quality measures for
such covered professional services.
``(b) Process for Implementing Eligible APMs.--
``(1) In general.--For purposes of subsection (a) and in
accordance with this section, the Secretary shall establish a
process under which--
``(A) a contract is entered into, in accordance with
paragraph (2);
``(B) proposals for potential Alternative Payment
Models are submitted in accordance with subsection (c);
``(C) Alternative Payment Models so proposed are
recommended, in accordance with subsection (d), for
testing and evaluation, including through the
demonstration program under subsection (e), and
approval under subsection (f);
``(D) applicable Alternative Payment Models are
tested and evaluated under such demonstration program;
``(E) models are implemented as eligible APMs in
accordance with subsection (f); and
``(F) a comprehensive list of all eligible APMs is
made publicly available, in accordance with subsection
(h), for application under subsection (a).
``(2) Contract with apm contracting entity.--
``(A) In general.--For purposes of paragraph (1)(A),
the Secretary shall identify and have in effect a
contract with an independent entity that has
appropriate expertise to carry out the functions
applicable to such entity under this section. Such
entity shall be referred to in this section as the `APM
contracting entity'.
``(B) Timing for first contract.--The Secretary shall
enter into the first contract under subparagraph (A) to
be in effect January 1, 2019.
``(C) Competitive procedures.--Competitive procedures
(as defined in section 4(5) of the Office of Federal
Procurement Policy Act (41 U.S.C. 403(5)) shall be used
to enter into a contract under subparagraph (A).
``(c) Submission of Proposed Alternative Payment Models.--Beginning
not later than 90 days after the date the Secretary enters into a
contract under subsection (b)(2) with the APM contracting entity,
physicians, eligible professional organizations, health care provider
organizations, and other entities may submit to the APM contracting
entity proposals for Alternative Payment Models for application under
this section. Such a proposal of a model shall include suggestions for
measures to be used under subsection (e)(1)(B) for purposes of
evaluating such model. In reviewing submissions under this subsection
for purposes of making recommendations under subsection (d)(1), the
contracting entity shall focus on submissions for such models that are
intended to improve care coordination and quality for patients through
modifying the manner in which physicians and other providers are paid
under this title.
``(d) Recommendation by APM Contracting Entity of Proposed Models.--
``(1) Recommendation.--
``(A) Recommendations to secretary.--
``(i) In general.--Under the process under
subsection (b), the APM contracting entity
shall at least quarterly recommend, in
accordance with clause (ii), to the Secretary--
``(I) Alternative Payment Models
submitted under subsection (c) to be
tested and evaluated through a
demonstration program under subsection
(e); and
``(II) Alternative Payment Models
submitted under subsection (c) to be
implemented under subsection (f)
without testing and evaluation through
such a demonstration program.
Such a recommendation under subclause (I) may
be made with respect to a model for which a
waiver would be required under paragraph (2).
Any reference in this subsection to an
Alternative Payment Model under this clause is
a reference to such model as may be modified
under clause (iii).
``(ii) Requirements.--In recommending an
Alternative Payment Model under clause (i),
each of the following shall apply:
``(I) The APM contracting entity may
recommend an Alternative Payment Model
under clause (i)(I) only if the entity
determines that the model satisfies the
criteria described in subparagraph (B),
including the criteria described in
subparagraph (B)(iv).
``(II) The APM contracting entity may
recommend an Alternative Payment Model
under clause (i)(II) only if the entity
determines that the model satisfies the
criteria described in subparagraph (C),
including the criteria described in
subparagraph (C)(iii).
``(III) The APM contracting entity
shall include with the recommended
Alternative Payment Model
recommendations for rules of
coordination described in clause (v).
``(iii) Modifications by apm contracting
entity.--For purposes of this subparagraph, to
the extent necessary to meet the applicable
requirements of clause (ii), the APM
contracting entity may modify an Alternative
Payment Model submitted under subsection (c) to
ensure that the model would--
``(I) reduce spending under this
title without reducing the quality of
care; or
``(II) improve the quality of care
without increasing spending under this
title.
``(iv) Forms of modifications.--Such a
modification under clause (iii) may include one
or more of the following:
``(I) A change to the payment
arrangement under which eligible
professionals participating in such
model would be paid for covered
professional services furnished under
such model.
``(II) A change to the criteria for
eligible professionals to be eligible
to participate under such model in
order to ensure that the requirement
described in subclause (I) or (II) is
satisfied.
``(III) A change to the rules of
coordination described in clause (v).
``(IV) The application of a withhold
mechanism under the payment arrangement
under which the distribution of
withheld amounts is based on the
success of the model in meeting
spending reduction requirements.
``(V) Such other change as the
contracting entity may specify.
``(v) Rules of coordination for application
of payment arrangements under models.--
``(I) In general.--Rules of
coordination described in this clause
for an Alternative Payment Model shall
be designed to determine, for purposes
of applying subsection (a) and section
1848(d)(16), under what circumstances
an eligible professional is treated as
having a payment arrangement under a
particular model.
``(II) Nonduplication of payment.--
Such rules of coordination shall ensure
coordination and nonduplication of
payment of services that might be
covered under more than one payment
arrangement or under section
1848(d)(16).
``(III) Application to non-apm
payment.--In applying such rules of
coordination for purposes of section
1848(d)(16), an eligible professional
shall not be treated as having a
payment arrangement in effect under
such a model for any covered
professional services not treated as
furnished under the model.
``(B) Criteria for recommending models for
demonstration.--For purposes of subparagraph
(A)(ii)(I), the criteria described in this
subparagraph, with respect to an Alternative Payment
Model, are each of the following:
``(i) The model has been supported by
meaningful clinical and non-clinical data, with
respect to a sufficient population sample, that
indicates the model would be successful at
addressing each of the abilities described in
clause (iv).
``(ii)(I) In the case of a model that has
already been evaluated and supported by data
with respect to a population of individuals
enrolled under this part, if the model were
evaluated under the demonstration under
subsection (e) such a population would
represent a sufficient number of individuals
enrolled under this part to ensure a meaningful
evaluation of the likely effect of expanding
the demonstration.
``(II) In the case of a model that has not
been so evaluated and supported by data with
respect to such a population, the population
that would be furnished services under such
model if the model were evaluated under the
demonstration under subsection (e) would
represent a sufficient number of individuals
enrolled under this part to ensure a meaningful
evaluation of the likely effect of expanding
the demonstration.
``(iii) Such model, including if tested and
evaluated under the demonstration under
subsection (e), would not deny or limit the
coverage or provision of benefits under this
title for applicable individuals.
``(iv) The proposal for such model
demonstrates--
``(I) the significant likelihood to
successfully manage the cost of
furnishing items and services under
this title so as to not result in
expenditures under this title being
greater than expenditures under this
title if the APM were not implemented;
and
``(II) the ability to maintain or
improve the overall quality of patient
care provided to individuals enrolled
under this part.
``(v) The model provides for a payment
arrangement--
``(I) that specifies the items and
services covered under the arrangement
and specifies rules of coordination
described in subparagraph (A)(v)
between the items and services covered
under the arrangement and other items
and services not covered under the
arrangement;
``(II) in the case such payment
arrangement does not provide for
payment under the fee schedule under
section 1848 for such items and
services furnished by such eligible
professionals, that provides for a
payment adjustment based on meaningful
EHR use comparable to such adjustment
that would otherwise apply under
section 1848; and
``(III) that provides for a payment
adjustment based on quality measures
comparable to such adjustment that
would otherwise apply under section
1848.
``(C) Criteria for recommending models for approval
without evaluation under demonstration.--For purposes
of subparagraph (A)(ii)(II), the criteria described in
this subparagraph, with respect to an Alternative
Payment Model, is that the model has already been
tested and evaluated for a sufficient enough period and
through such testing and evaluation the model was
shown--
``(i) to have satisfied the criteria
described in each of clauses (i), (ii), (iii),
and (v) of subparagraph (B); and
``(ii)(I) to have reduced spending under this
title without reducing the quality of care; or
``(II) to have improved the quality of
patient care without increasing such spending.
``(D) Transparency and disclosures.--
``(i) Disclosures.--Not later than 90 days
after receipt of a submission of a model under
subsection (c) by the APM contracting entity,
the APM contracting entity shall submit to the
Secretary and the model submitter and make
publicly available a notification on whether or
not, and if so how, the model meets criteria
for recommending such model under subparagraph
(A), including whether or not such model
requires a waiver under paragraph (2). In the
case that the APM contracting entity determines
not to recommend such model under this
paragraph, such notification shall include an
explanation of the reasons for not making such
a recommendation. Any information made publicly
available pursuant to the previous sentence
shall not include proprietary data.
``(ii) Submission of recommended models.--The
APM contracting entity shall at least quarterly
submit to the Secretary, the Medicare Payment
Advisory Commission, and the Chief Actuary of
the Centers for Medicare & Medicaid Services
the following:
``(I) The models recommended under
subparagraph (A)(i)(I), including any
such models that require a waiver under
paragraph (2), and the data and
analyses on such recommended models
that support the criteria described in
subparagraph (B).
``(II) The models recommended under
subparagraph (A)(i)(II) and the data
and analyses on such recommended models
that support the criteria described in
subparagraph (C).
``(iii) Explanation for no recommendations.--
For any year beginning with 2015 that the APM
contracting entity does not recommend any
models under subparagraph (A)(i), the entity
shall instead satisfy this clause by submitting
to the Secretary and making publicly available
an explanation for not having any such
recommendations.
``(iv) Justifications for recommendations.--
In submitting data and analyses under subclause
(I) or (II) of clause (ii) with respect to a
model, the APM contracting entity shall include
a specific explanation of how the model would
(and recommendations for ensuring that the
model will) meet the criteria described in
subparagraph (B) or (C), respectively.
``(v) Confirmation of spending estimates by
cms chief actuary.--For each Alternative
Payment Model described in subclause (I) or
(II) of clause (ii), the Chief Actuary of the
Centers for Medicare & Medicaid Services shall
submit to the Secretary a determination of
whether or not the Chief Actuary confirms that
the model satisfies the criterion described in
subparagraph (B)(iv)(I) or (C)(ii),
respectively.
``(2) Models requiring waiver approval.--
``(A) In general.--In the case that an Alternative
Payment Model recommended under paragraph (1)(A)(i)
would require a waiver from any requirement under this
title, in determining approval of such model, the
Secretary may make such a waiver solely in order for
such model to be tested and evaluated under the
demonstration program.
``(B) Approval.--Not later than 180 days after the
date of the receipt of such submission for a model, the
Secretary shall notify the APM contracting entity and
the entity submitting such model under subsection (c)
whether or not such a waiver for such model is approved
and the reason for any denial of such a waiver.
``(e) Demonstration.--
``(1) In general.--Subject to paragraphs (5), (6), and (7),
the Secretary may conduct a demonstration program, with respect
to an Alternative Payment Model approved under paragraph (2),
under which participating APM providers shall be paid under
this title in accordance with the payment arrangement under
such model and such model shall be evaluated by the independent
evaluation entity under paragraph (4). The duration of a
demonstration program under this subsection, with respect to
such a model, shall be 3 years.
``(2) Approval by secretary of models for demonstration.--
``(A) In general.--Not later than 180 days after the
date of receipt of a submission under subsection
(d)(1)(D)(ii), with respect to an Alternative Payment
Model recommended under subsection (d)(1)(A)(i)(I), the
Secretary shall--
``(i) review the basis for such
recommendation in order to assess, taking into
account the determination of the Chief Actuary
under subsection (d)(1)(D)(v) with respect to
such model, if the model is significantly
likely to--
``(I) reduce spending under this
title without reducing the quality of
care; or
``(II) improve the quality of care
without increasing spending under this
title;
``(ii) assess whether the model is
significantly likely to result in participation
under such model of a sufficient number of
those eligible professionals for whom the model
was designed consistent with clause (i) to be
able to evaluate the likely effect of expanding
the demonstration; and
``(iii) approve such model for a
demonstration program under this subsection,
including as modified under subparagraph (B),
only if the Secretary determines--
``(I) the model is significantly
likely to satisfy the criterion
described in subclause (I) or (II) of
clause (i);
``(II) the model is significantly
likely to result in the participation
of a sufficient number of eligible
professionals described in clause (ii);
``(III) the model applies rules of
coordination described in subparagraph
(C) applicable to such model; and
``(IV) the model satisfies the
criteria described in subsection
(d)(1)(B).
The Secretary shall periodically make available a list
of such models approved under clause (iii).
``(B) Modifications by secretary.--
``(i) Before approval.--For purposes of
subparagraph (A), the Secretary may modify an
Alternative Payment Model recommended under
subsection (d)(1)(A)(i)(I) to ensure that the
model meets the requirements described in
subparagraph (A)(iii). Such a modification may
include one or more of the following:
``(I) A change to the payment
arrangement under which eligible
professionals participating in such
model would be paid for covered
professional services furnished under
such model.
``(II) A change to the criteria for
eligible professionals to be eligible
to participate under such model in
order to ensure that such requirements
are satisfied.
``(III) A change to the rules of
coordination described in subparagraph
(C).
``(IV) The application of a withhold
mechanism under the payment arrangement
under which the distribution of
withheld amounts is based on the
success of the model in meeting
spending reduction requirements.
``(V) Such other change as the
Secretary may specify.
``(ii) Termination or modification during
demonstration.--The Secretary shall terminate
or modify the design and implementation of an
Alternative Payment Model approved under
subparagraph (A)(iii) for a demonstration
program, after testing has begun, unless the
Secretary determines (and the Chief Actuary of
the Centers for Medicare & Medicaid Services,
with respect to program spending under this
title, certifies) that the model is expected to
continue to satisfy the requirements described
in such paragraph relating to quality of care
and reduced spending. Such termination may
occur at any time after such testing has begun
and before completion of the testing.
``(C) Rules of coordination for application of
payment arrangements under models.--
``(i) In general.--Rules of coordination
described in this subparagraph for an
Alternative Payment Model shall be designed to
determine, for purposes of applying subsection
(a) and section 1848(d)(16), under what
circumstances an eligible professional is
treated as having a payment arrangement under a
particular model.
``(ii) Nonduplication of payment.--Such rules
of coordination shall ensure coordination and
nonduplication of payment of services that
might be covered under more than one payment
arrangement or under section 1848(d)(16).
``(iii) Application to non-apm payment.--In
applying such rules for purposes of section
1848(d)(16), an eligible professional shall not
be treated as having a payment arrangement in
effect under such a model for any covered
professional services not treated as furnished
under the model.
``(3) Participating apm providers.--
``(A) In general.--To participate under a
demonstration program under this subsection, with
respect to an Alternative Payment Model, an eligible
professional shall enter into a contract with the
Administrator of the Centers for Medicare & Medicaid
Services under this subsection. For purposes of this
section, such an eligible professional who so
participates under such an Alternative Payment Model in
this section is referred to as a `participating APM
provider'.
``(B) Requirements.--The Secretary shall establish
criteria for eligible professionals to enter into
contracts under this paragraph for purposes of
participation under a demonstration program with
respect to an Alternative Payment Model. Such criteria
shall ensure participation under such model of a
sufficient number of eligible professionals for whom
the model was designed in order to satisfy the
criterion described in paragraph (2)(A)(iii)(II).
``(4) Reporting and evaluation.--
``(A) Independent evaluation entity.--Under this
subsection, the Secretary shall enter into a contract
with an independent entity to evaluate Alternative
Payment Models under demonstration programs under this
subsection based on appropriate measures specified
under subparagraph (B). In this section, such entity
shall be referred to as the `independent evaluation
entity'. Such contract shall be entered into in a
timely manner so as to ensure evaluation of an
Alternative Payment Model under a demonstration program
under this subsection may begin as soon as possible
after the model is approved under paragraph (2).
``(B) Performance measures.--For purposes of this
subsection, the Secretary shall specify--
``(i) measures to evaluate Alternative
Payment Models under demonstration programs
under this subsection, which may include
measures suggested under subsection (c) and
shall be sufficient to allow for a
comprehensive assessment of such a model; and
``(ii) quality measures on which
participating APM providers shall report, which
shall be similar to measures applicable under
section 1848(k).
``(C) Reporting requirements.--A contract entered
into with a participating APM provider under paragraph
(3) shall require such provider to report on
appropriate measures specified under subparagraph (B).
``(D) Periodic review.--The independent evaluation
entity shall periodically review and analyze and submit
such analysis to the Secretary and the participating
APM providers involved data reported under subparagraph
(C) and such other data as deemed necessary to evaluate
the model.
``(E) Final evaluation.--Not later than 6 months
after the date of completion of a demonstration
program, the independent evaluation entity shall submit
to the Secretary, the Medicare Payment Advisory
Commission, and the Chief Actuary of the Centers for
Medicare & Medicaid Services (and make publicly
available) a report on each model evaluated under such
program. Such report shall include--
``(i) outcomes on the clinical and claims
data received through such program with respect
to such model;
``(ii) recommendations on--
``(I) whether or not such model
should be implemented as an eligible
APM under this section; or
``(II) whether or not the evaluation
of such model under the demonstration
program should be extended or expanded;
``(iii) the justification for each such
recommendation described in clause (ii); and
``(iv) in the case of a recommendation to
implement such model as an eligible APM,
recommendations on standardized rules for
purposes of such implementation.
``(5) Approval of extending evaluation under demonstration.--
Not later than 90 days after the date of receipt of a
submission under paragraph (4)(E), the Secretary shall,
including based on a recommendation submitted under such
paragraph, determine whether an Alternative Payment Model may
be extended or expanded under the demonstration program.
``(6) Termination.--The Secretary shall terminate a
demonstration program for a model under this subsection unless
the Secretary determines (and the Chief Actuary of the Centers
for Medicare & Medicaid Services, with respect to spending
under this title, certifies), after testing has begun, that the
model is expected to--
``(A) improve the quality of care (as determined by
the Administrator of the Centers for Medicare &
Medicaid Services) without increasing spending under
this title;
``(B) reduce spending under this title without
reducing the quality of care; or
``(C) improve the quality of care and reduce
spending.
Such termination may occur at any time after such testing has
begun and before completion of the testing.
``(7) Funding.--
``(A) In general.--There are appropriated, from
amounts in the Federal Supplementary Medical Insurance
Trust Fund under section 1841 not otherwise
appropriated and as of the date of the enactment of
this section, $2,000,000,000 for the purposes described
in subparagraph (B), of which no more than 2.5 percent
may be used for the purpose described in clause (iii)
of such subparagraph. Amounts appropriated under this
subparagraph shall be available until expended.
``(B) Purposes.--Amounts appropriated under
subparagraph (A) shall be used for--
``(i) payments for items and services
furnished by participating APM providers under
an Alternative Payment Model under a
demonstration program under this subsection
that--
``(I) would not otherwise be eligible
for payment under this title; or
``(II) exceed the amount of payment
that would otherwise be made for such
items and services under this title if
such items and services were not
furnished under such demonstration
program;
``(ii) the evaluations provided for under
this section of models under such a
demonstration program;
``(iii) payment to the APM contracting entity
for carrying out its duties under this section;
and
``(iv) for otherwise carrying out this
subsection.
``(C) Limitation.--The amounts appropriated under
subparagraph (A) are the only amounts authorized or
appropriated to carry out the purposes described in
subparagraph (B).
``(f) Implementation of Recommended Models as Eligible APMs.--
``(1) Assessment.--With respect to each Alternative Payment
Model recommended under subsection (d)(1)(A)(i)(II) or
(e)(4)(E)(ii)(I), the Secretary shall review the basis for such
recommendation and assess and determine, in consultation with
the Chief Actuary of the Centers for Medicare & Medicaid
Services, whether the model is significantly likely to continue
to result in meeting the criterion described in subsection
(e)(2)(A)(iii)(I), with or without a modification described in
paragraph (5).
``(2) Implementation through rulemaking.--
``(A) Publication of nprm.--If the Secretary
determines that such a model is significantly likely to
meet such criterion, the Secretary shall publish as
part of the applicable physician fee schedule
rulemaking process (specified in paragraph (3)) a
notice of proposed rulemaking to implement such model,
including as modified under paragraph (5).
``(B) Comments by medpac.--Not later than 90 days
after the date of issuance of such notice with respect
to a model, the Medicare Payment Advisory Commission
shall submit comments on the proposed rule for such
model to Congress and to the Secretary. Such comments
shall include an evaluation of the reports from the
contracting entity and independent evaluation entity on
such model regarding the model's impact on expenditures
and quality of care under this title.
``(C) Final rule and conditions.--The Secretary shall
publish as part of the applicable physician fee
schedule rulemaking process (specified in paragraph
(3)) a final notice implementing such proposed rule,
including as modified under paragraph (5), as an
eligible APM only if--
``(i) the Secretary determines that such
model is expected to--
``(I) reduce spending under this
title without reducing the quality of
care; or
``(II) improve the quality of patient
care without increasing spending;
``(ii) the Chief Actuary of the Centers for
Medicare & Medicaid Services certifies that
such model would reduce (or would not result in
any increase in) spending under this title;
``(iii) the Secretary determines that such
model would not deny or limit the coverage or
provision of benefits under this title for
applicable individuals;
``(iv) the Secretary determines that the
model is significantly likely to result in the
participation of a sufficient number of
appropriate eligible professionals for whom the
model was designed in order to satisfy the
criterion described in subsection
(d)(2)(A)(iii)(II);
``(v) the Secretary determines that the model
applies rules of coordination described in
paragraph (6); and
``(vi) the Secretary determines that model
meets such other criteria as the Secretary may
determine.
``(3) Applicable physician fee schedule rulemaking process.--
For purposes of paragraph (2), in the case of an Alternative
Payment Model recommended under subsection (d)(1)(A)(ii) or
(e)(4)(E)(ii)(I)--
``(A) on or before April 1 of a year, the applicable
physician fee schedule rulemaking process is the
process for publication by November 1 of that year of
the fee schedule amounts under this section for the
succeeding year; or
``(B) after April 1 of a year, the applicable
physician fee schedule rulemaking process is the
process for publication by November 1 of the following
year of the fee schedule amounts under this section for
the second succeeding year.
``(4) Justification for disapprovals.--In the case that an
Alternative Payment Model recommended under subsection
(d)(1)(A)(ii) or (e)(4)(E)(ii)(I) is not implemented as an
eligible APM under this subsection, the Secretary shall make
publicly available the rational, in detail, for such decision.
``(5) Modifications by secretary.--For purposes of this
subsection, the Secretary may modify an Alternative Payment
Model recommended under subsection (d)(1)(A)(i)(II) or
(e)(4)(E)(ii)(I) to ensure that the model meets the
requirements under paragraph (1)(B). Such a modification may
include one or more of the following:
``(A) A change to the payment arrangement under which
eligible professionals participating in such model
would be paid for covered professional services
furnished under such model.
``(B) A change to the criteria for eligible
professionals to be eligible to participate under such
model in order to ensure that such requirements are
satisfied.
``(C) A change to the rules of coordination described
in paragraph (6).
``(D) The application of a withhold mechanism under
the payment arrangement under which the distribution of
withheld amounts is based on the success of the model
in meeting spending reduction requirements.
``(E) Such other change as the Secretary may specify.
``(6) Rules of coordination for application of payment
arrangements under models.--
``(A) In general.--Rules of coordination described in
this paragraph for an Alternative Payment Model shall
be designed to determine, for purposes of applying
subsection (a) and section 1848(d)(16), under what
circumstances an eligible professional is treated as
having a payment arrangement under a particular model.
``(B) Nonduplication of payment.--Such rules of
coordination shall ensure coordination and
nonduplication of payment of services that might be
covered under more than one payment arrangement or
under section 1848(d)(16).
``(C) Application to non-apm payment.--In applying
such rules for purposes of section 1848(d)(16), an
eligible professional shall not be treated as having a
payment arrangement in effect under such a model for
any covered professional services not treated as
furnished under the model.
``(g) Periodic Review and Termination.--
``(1) Periodic review.--In the case of an Alternative Payment
Model that has been implemented, the Secretary and the Chief
Actuary of the Centers for Medicare & Medicaid Services shall
review such model every 3 years to determine (and certify, in
the case of the Chief Actuary and spending under this title),
for the previous 3 years, whether the model has--
``(A) reduced the quality of care, or
``(B) increased spending under this title,
compared to the quality of care or spending that would have
resulted if the model had not been implemented.
``(2) Termination.--
``(A) Quality of care reduction termination.--If
based upon such review the Secretary determines under
paragraph (1)(A) that the model has reduced the quality
of care, the Secretary may terminate such model.
``(B) Spending increase termination.--Unless such
Chief Actuary certifies under paragraph (1)(B) that the
expenditures under this title under the model do not
exceed the expenditures that would otherwise have been
made if the model had not been implemented for the
period involved, the Secretary shall terminate such
model.
``(h) Dissemination of Eligible APMs.--Under this section there shall
be established a process for specifying, and making publicly available
a list of, all eligible APMs, which shall include at least those
implemented under subsection (f) and demonstrations carried out with
respect to payments under section 1848 through authority in existence
as of the day before the date of the enactment of this section. Under
such process such list shall be periodically updated and, beginning
with January 1, 2015, and annually thereafter, such list shall be
published in the Federal Register.''.
(2) Conforming amendment.--Section 1848(a)(1) of the Social
Security Act (42 U.S.C. 1395w-4(a)(1)) is amended by striking
``shall instead'' and inserting ``shall, subject to section
1848A, instead''.
(d) Adjustment to Medicare Payment Localities.--
(1) In general.--Section 1848(e) of the Social Security Act
(42 U.S.C. 1395w-4(e)) is amended by adding at the end the
following new paragraph:
``(6) Use of msas as fee schedule areas in california.--
``(A) In general.--Subject to the succeeding
provisions of this paragraph and notwithstanding the
previous provisions of this subsection, for services
furnished on or after January 1, 2017, the fee schedule
areas used for payment under this section applicable to
California shall be the following:
``(i) Each Metropolitan Statistical Area
(each in this paragraph referred to as an
`MSA'), as defined by the Director of the
Office of Management and Budget as of December
31 of the previous year, shall be a fee
schedule area.
``(ii) All areas not included in an MSA shall
be treated as a single rest-of-State fee
schedule area.
``(B) Transition for msas previously in rest-of-state
payment locality or in locality 3.--
``(i) In general.--For services furnished in
California during a year beginning with 2017
and ending with 2021 in an MSA in a transition
area (as defined in subparagraph (D)), subject
to subparagraph (C), the geographic index
values to be applied under this subsection for
such year shall be equal to the sum of the
following:
``(I) Current law component.--The old
weighting factor (described in clause
(ii)) for such year multiplied by the
geographic index values under this
subsection for the fee schedule area
that included such MSA that would have
applied in such area (as estimated by
the Secretary) if this paragraph did
not apply.
``(II) MSA-based component.--The MSA-
based weighting factor (described in
clause (iii)) for such year multiplied
by the geographic index values computed
for the fee schedule area under
subparagraph (A) for the year
(determined without regard to this
subparagraph).
``(ii) Old weighting factor.--The old
weighting factor described in this clause--
``(I) for 2017, is \5/6\; and
``(II) for each succeeding year, is
the old weighting factor described in
this clause for the previous year minus
\1/6\.
``(iii) MSA-based weighting factor.--The MSA-
based weighting factor described in this clause
for a year is 1 minus the old weighting factor
under clause (ii) for that year.
``(C) Hold harmless.--For services furnished in a
transition area in California during a year beginning
with 2017, the geographic index values to be applied
under this subsection for such year shall not be less
than the corresponding geographic index values that
would have applied in such transition area (as
estimated by the Secretary) if this paragraph did not
apply.
``(D) Transition area defined.--In this paragraph,
the term `transition area' means each of the following
fee schedule areas for 2013:
``(i) The rest-of-State payment locality.
``(ii) Payment locality 3.
``(E) References to fee schedule areas.--Effective
for services furnished on or after January 1, 2017, for
California, any reference in this section to a fee
schedule area shall be deemed a reference to a fee
schedule area established in accordance with this
paragraph.''.
(2) Conforming amendment to definition of fee schedule
area.--Section 1848(j)(2) of the Social Security Act (42 U.S.C.
1395w-4(j)(2)) is amended by striking ``The term'' and
inserting ``Except as provided in subsection (e)(6)(D), the
term''.
(e) Relative Values Under the Medicare Physician Fee Schedule.--
(1) Eligible physicians reporting system to improve accuracy
of relative values.--Section 1848(c) of the Social Security Act
(42 U.S.C. 1395w-4(c)) is amended by adding at the end the
following new paragraph:
``(8) Physician reporting system to improve accuracy of
relative values.--
``(A) In general.--The Secretary shall implement a
system for the periodic reporting by physicians of data
on the accuracy of relative values under this
subsection, such as data relating to service volume and
time. Such data shall be submitted in a form and manner
specified by the Secretary and shall, as appropriate,
incorporate data from existing sources of data, patient
scheduling systems, cost accounting systems, and other
similar systems.
``(B) Identification of reporting cohort.--Not later
than January 1, 2015, the Secretary shall establish a
mechanism for physicians to participate under the
reporting system under this paragraph, all of whom
shall collectively be referred to under this paragraph
as the `reporting group'. The reporting group shall
include physicians across settings that collectively
represent a range of specialties and practitioner
types, furnish a range of physicians' services, and
serve a range of patient populations.
``(C) Incentive to report.--Under the system under
this paragraph, the Secretary may provide for such
payments under this part to physicians included in the
reporting group as the Secretary determines appropriate
to compensate such physicians for reporting data under
the system. Such payments shall be provided in such
form and manner as specified by the Secretary. In
carrying out this subparagraph, reporting by such a
physician under this paragraph shall not be treated as
the furnishing of physicians' services for purposes of
applying this section.
``(D) Funding.--To carry out this paragraph (other
than with respect to payments made under subparagraph
(C)), in addition to funds otherwise appropriated, the
Secretary shall provide for the transfer from the
Federal Supplementary Medical Insurance Trust Fund
under section 1841 of $1,000,000 to the Centers for
Medicare & Medicaid Services Program Management Account
for each fiscal year beginning with fiscal year 2014.
Amounts transferred under this subparagraph for a
fiscal year shall be available until expended.''.
(2) Relative value adjustments for misvalued physicians'
services.--
(A) In general.--Section 1848(c)(2) of the Social
Security Act (42 U.S.C. 1395w-4(c)(2)) is amended by
adding at the end the following new subparagraph:
``(M) Adjustments for misvalued physicians'
services.--
``(i) In general.--Only with respect to fee
schedules established for 2016, 2017, and 2018
(and not for subsequent years), the Secretary
shall--
``(I) identify, based on the data
reported under paragraph (8) and other
relevant data, misvalued services for
which adjustments to the relative
values established under this paragraph
would result in a reduction in
expenditures under the fee schedule
under this section, with respect to
such year, of not more than 1 percent
of the projected amount of expenditures
under such fee schedule for such year;
and
``(II) make such adjustments for each
such year so as only to result in such
a reduction for such year.
``(ii) No effect on subsequent years.--A
reduction under this subparagraph for a year
shall not affect any reduction for any
subsequent year.
``(iii) Rule of construction relating to
undervalued codes.--Nothing in this
subparagraph shall be construed as preventing
the Secretary from increasing the relative
values for codes that are undervalued.''.
(B) Budget neutrality.--Section 1848(c)(2)(B)(v) of
the Social Security Act (42 U.S.C. 1395w-4(c)(2)(B)(v))
is amended by adding at the end the following new
subclause:
``(VIII) Reductions for misvalued
physicians' services.--Reduced
expenditures attributable to
subparagraph (M) for fiscal years 2016,
2017, and 2018.''.
(3) Disclosure of data used to establish multiple procedure
payment reduction policy.--The Secretary of Health and Human
Services shall make publicly available the data used to
establish the multiple procedure payment reduction policy to
the professional component of imaging services in the final
rule published in the Federal Register, v. 77, n. 222, November
16, 2012, pages 68891-69380 under the physician fee schedule
under section 1848 of the Social Security Act (42 U.S.C. 1395w-
4).
SEC. 3. EXPANDING AVAILABILITY OF MEDICARE DATA.
(a) Expanding Uses of Medicare Data by Qualified Entities.--
(1) In general.--To the extent consistent with applicable
information, privacy, security, and disclosure laws, beginning
with 2014, notwithstanding paragraph (4)(B) of section 1874(e)
of the Social Security Act (42 U.S.C. 1395kk(e)) and the second
sentence of paragraph (4)(D) of such section, a qualified
entity may use data received by such entity under such section,
and information derived from the evaluation described in such
paragraph (4)(D), for additional non-public analyses (as
determined appropriate by the Secretary of Health and Human
Services) or provide or sell such data to registered or
authorized users and subscribers, including to providers of
services and suppliers, for non-public use (including for the
purposes of assisting providers of services and suppliers to
develop and participate in quality and patient care improvement
activities, including developing new models of care).
(2) Definitions.--In this section:
(A) The term ``qualified entity'' has the meaning
given such term in section 1874(e)(2) of the Social
Security Act (42 U.S.C. 1395kk(e)).
(B) The terms ``supplier'' and ``provider of
services'' have the meanings given such terms in
subsections (d) and (u), respectively, of section 1861
of the Social Security Act (42 U.S.C. 1395x).
(b) Access to Medicare Data to Providers of Services and Suppliers to
Facilitate Development of Alternative Payment Models and to Qualified
Clinical Data Registries to Facilitate Quality Improvement.--Consistent
with applicable laws and regulations with respect to privacy and other
relevant matters, the Secretary shall provide Medicare claims data (in
a form and manner determined to be appropriate) to--
(1) qualified entities, that may share with providers of
services and suppliers that are registered or authorized users
or subscribers, for non-public use including to facilitate the
development of new models of care (including development of
Alternate Payment Models under section 1848A of the Social
Security Act, models for small group specialty practices, and
care coordination models); and
(2) qualified clinical data registries under section
1848(m)(3)(E)) of the Social Security Act (42 U.S.C. 1395w-
4(m)(3)(E)) for purposes of linking such data with clinical
outcomes data and performing and disseminating risk-adjusted,
scientifically valid analysis and research to support quality
improvement or patient safety, provided that any public
reporting of identifiable provider data shall only be conducted
with prior consent of such provider.
SEC. 4. ENCOURAGING CARE COORDINATION AND MEDICAL HOMES.
Section 1848(b) of the Social Security Act (42 U.S.C. 1395w-4(b)) is
amended by adding at the end the following new paragraph:
``(8) Encouraging care coordination and medical homes.--
``(A) In general.--In order to promote the
coordination of care by an applicable provider (as
defined in subparagraph (B)) for individuals with
complex chronic care needs who are furnished items and
services by multiple physicians and other suppliers and
providers of services, the Secretary shall--
``(i) develop one or more HCPCS codes for
complex chronic care management services for
individuals with complex chronic care needs;
and
``(ii) for such services furnished on or
after January 1, 2015, by an applicable
provider, make payment (as the Secretary
determines to be appropriate) under the fee
schedule under this section using such HCPCS
codes.
``(B) Applicable provider defined.--For purposes of
this paragraph, the term `applicable provider' means a
physician (as defined in section 1861(r)(1)) or a
physician assistant or nurse practitioner (as defined
in section 1861(aa)(5)(A)) who--
``(i) is certified as a medical home (by
achieving an accreditation status of level 3 by
the National Committee for Quality Assurance);
``(ii) is recognized as a patient-centered
specialty practice by the National Committee
for Quality Assurance;
``(iii) has received equivalent certification
(as determined by the Secretary); or
``(iv) meets such other comparable
qualifications as the Secretary determines to
be appropriate.
``(C) Budget neutrality.--The budget neutrality
provision under subsection (c)(2)(B)(ii)(II) shall
apply in establishing the payment under subparagraph
(A)(ii).
``(D) Single applicable provider payment.--In
carrying out this paragraph, the Secretary shall only
make payment to a single applicable provider for
complex chronic care management services furnished to
an individual.''.
SEC. 5. MISCELLANEOUS.
(a) Solicitations, Recommendations, and Reports.--
(1) Solicitation for recommendations on episodes of care
definition.--The Administrator of the Centers for Medicare &
Medicaid Services shall request eligible professional
organizations (as defined in section 1848(k)(3) of the Social
Security Act (42 U.S.C. 1395w-4(k)(3))) and other relevant
stakeholders to submit recommendations for defining non-acute
related episodes of care for purposes of applying such
definition under subsections (k) and (q) of section 1848 of the
Social Security Act (42 U.S.C. 1395w-4) and section 1848A of
such Act, as added by subsections (b) and (c) of section 2.
(2) Solicitation for recommendations on provider fee schedule
payment bundles.--
(A) In general.--The Administrator of the Centers for
Medicare & Medicaid Services shall solicit from
eligible professional organizations (as defined in
section 1848(k)(3) of the Social Security Act (42
U.S.C. 1395w-4(k)(3))) recommendations for payment
bundles for chronic conditions and expensive, high
volume services for which payment is made under title
XVIII of such Act.
(B) Report to congress.--Not later than 24 months
after the date of the enactment of this Act, the
Administrator shall submit to Congress a report on
proposals for such payment bundles.
(3) Reports on modified pfs system and payment system
alternatives.--
(A) Biannual progress reports.--Not later than
January 15, 2016, and annually thereafter, the
Secretary of Health and Human Services shall submit to
Congress and post on the public Internet website of the
Centers for Medicare & Medicaid Services a biannual
progress report--
(i) on the implementation of paragraph (9) of
section 1848(k) of the Social Security Act (42
U.S.C. 1395w-4(k)), as added by section
2(b)(2), and the quality update incentive
program under subsection (q) of section 1848 of
the Social Security Act (42 U.S.C. 1395w-4), as
added by section 2(b)(3);
(ii) that includes an evaluation of such
paragraph and such quality update incentive
program and recommendations with respect to
such program and appropriate update mechanisms;
and
(iii) on the actions taken to promote and
fulfill the identification of eligible APMs
under section 1848A of the Social Security Act,
as added by section 2(c), for application under
such section 1848A.
(B) GAO and medpac reports.--
(i) GAO report on initial stages of
program.--The Comptroller General of the United
States shall submit to Congress a report for
2019 and each subsequent year analyzing the
extent to which the system under section
1848(k)(9) of the Social Security Act (42
U.S.C. 1395w-4(k)(9)) and such quality update
incentive program under section 1848(q) of the
Social Security Act, as added by section 2(b)
is successfully satisfying performance
objectives, including with respect to--
(I) the process for developing and
selecting measures and activities under
subsection (k)(9) of section 1848 of
such Act (42 U.S.C. 1395w-4);
(II) the process for assessing
performance against such measures and
activities under subsection (q) of such
section; and
(III) the adequacy of the measures
and activities so selected.
(ii) Evaluation by gao and medpac on
implementation of quality update incentive
program.--
(I) GAO.--The Comptroller General of
the United States shall evaluate the
initial phase of the quality update
incentive program under subsection (q)
of section 1848 of the Social Security
Act (42 U.S.C. 1395w-4) and shall
submit to Congress, not later than
2019, a report with recommendations for
improving such quality update incentive
program.
(II) MedPAC.--In the course of its
March Report to Congress on Medicare
payment policy, MedPAC shall analyze
the initial phase of such quality
update incentive program and make
recommendations, as appropriate, for
improving such quality update incentive
program.
(iii) MedPAC report on payment system
alternatives.--
(I) In general.--Not later than June
15, 2016, the Medicare Payment Advisory
Commission shall submit to Congress a
report that analyzes multiple options
for alternative payment models in lieu
of section 1848 of the Social Security
Act (42 U.S.C. 1395w-4). In analyzing
such models, the Medicare Payment
Advisory Commission shall examine at
least the following models:
(aa) Accountable care
organization payment models.
(bb) Primary care medical
home payment models.
(cc) Bundled or episodic
payments for certain conditions
and services.
(dd) Gainsharing arrangements
(II) Items to be included.--Such
report shall include information on how
each recommended new payment model will
achieve maximum flexibility to reward
high quality, efficient care.
(C) Tracking expenditure growth and access.--
Beginning in 2015, the Chief Actuary of the Centers for
Medicare & Medicaid Services shall track expenditure
growth and beneficiary access to physicians' services
under section 1848 of the Social Security Act (42
U.S.C. 1395w-4) and shall post on the public Internet
website of the Centers for Medicare & Medicaid Services
annual reports on such topics.
(4) Report on clinical decision support mechanisms.--Not
later than one year after the date of the enactment of this
Act, the Secretary of Health and Human Services shall submit to
Congress a report on the extent to which clinical decision
support mechanisms and other provider support tools could be
used to further program objectives under section 1848 of the
Social Security Act (42 U.S.C. 1395w-4)) and recommendation for
how such mechanisms and tools should be so used.
(b) Rule of Construction Regarding Health Care Provider Standards of
Care.--
(1) In general.--The development, recognition, or
implementation of any guideline or other standard under any
Federal health care provision shall not be construed to
establish the standard of care or duty of care owed by a health
care provider to a patient in any medical malpractice or
medical product liability action or claim.
(2) Definitions.--For purposes of this subsection:
(A) The term ``Federal health care provision'' means
any provision of the Patient Protection and Affordable
Care Act (Public Law 111-148), title I and subtitle B
of title III of the Health Care and Education
Reconciliation Act of 2010 (Public Law 111-152), and
titles XVIII and XIX of the Social Security Act.
(B) The term ``health care provider'' means any
individual or entity--
(i) licensed, registered, or certified under
Federal or State laws or regulations to provide
health care services; or
(ii) required to be so licensed, registered,
or certified but that is exempted by other
statute or regulation.
(C) The term ``medical malpractice or medical
liability action or claim'' means a medical malpractice
action or claim (as defined in section 431(7) of the
Health Care Quality Improvement Act of 1986 (42 U.S.C.
11151(7))) and includes a liability action or claim
relating to a health care provider's prescription or
provision of a drug, device, or biological product (as
such terms are defined in section 201 of the Federal
Food, Drug, and Cosmetic Act or section 351 of the
Public Health Service Act).
(D) The term ``State'' includes the District of
Columbia, Puerto Rico, and any other commonwealth,
possession, or territory of the United States.
(3) No preemption.--No provision of the Patient Protection
and Affordable Care Act (Public Law 111-148), title I or
subtitle B of title III of the Health Care and Education
Reconciliation Act of 2010 (Public Law 111-152), or title XVIII
or XIX of the Social Security Act shall be construed to preempt
any State or common law governing medical professional or
medical product liability actions or claims.
Purpose and Summary
H.R. 2810, the ``Medicare Patient Access and Quality
Improvement Act of 2013,'' was introduced on July 24, 2013, by
Rep. Michael Burgess (R-TX), and referred to the Committee on
Energy and Commerce.
The legislation would repeal the sustainable growth rate
(SGR) and reform Medicare payments for physicians' services.
Additionally, H.R. 2810 further would improve the quality of
care in the Medicare program by allowing de-identified data to
be used by medical providers to improve the delivery of care,
would ensure that payments by Federal programs for the
provision of care could not be used to establish the standard
of care in a medical liability case, and for other purposes.
Background and Need for Legislation
When Medicare was implemented in 1966, providers were paid
according to the Customary, Prevailing, and Reasonable (CPR)
system.\1\ However, incentives inherent in this system led to
rapid increases in both the price and volume of services under
the program, and by the mid-1970s, prevailing fees under the
program were linked to the Medicare Economic Index (MEI). This
change was intended to limit charge inflation for physician
services and was largely successful in that regard, but it
placed no controls on the volume of services that physicians
were paid for under the program.
---------------------------------------------------------------------------
\1\In the CPR system, physicians were paid the lowest of three
possible fees, (1) the actual charge submitted, (2) the fee customarily
charged by a particular physician, or (3) the prevailing fee charged by
physicians in a given locality.
---------------------------------------------------------------------------
In the Omnibus Budget Reconciliation Act (OBRA, P.L. 101-
239) of 1989, Congress created a new system of physician
payments based on the resource-based relative value scale
(RBRVS). The RBRVS system attempted to link physician payment
to the resources, or ``inputs,'' that were used in providing
medical services. In an attempt to control total spending for
physicians' services driven by volume increases, OBRA also tied
the annual update of the fee schedule to the trend in total
spending for physicians' services relative to a target that was
based on historical trends in volume. This method, effective in
1992, became known as the Medicare Volume Performance Standard
(VPS), which would be replaced because there was concern that
it did sufficiently constrain the growth in volume of services
in the Medicare program and the instability of its update
formula.
In 1997, the Balanced Budget Act (BBA, P.L. 105-33)
replaced VPS with the SGR system. Unlike the VPS, the SGR
target is tied to growth in the nation's gross domestic product
per capita and adjusts physician payments by a factor that
reflects cumulative spending relative to the target. While the
SGR targets are not limits on expenditures, they represent a
predictable and, what was intended to be, a sustainable
trajectory for cumulative spending on Medicare physician
services from April 1996 forward. However, much like the MEI
before it, the system did not account for the volume of
services provided and quickly led to a series of required
annual cuts.
Medicare payments for services of physicians and certain
non-physician practitioners are made on the basis of a fee
schedule. Created after enactment of the OBRA, the fee schedule
assigns relative values to services that reflect physician work
(i.e., time, skill, and intensity necessary to provide the
service), practice expenses, and malpractice costs (the RBRVS).
The relative values are adjusted for geographic variation in
costs. The adjusted relative values then are converted into a
dollar payment amount by a conversion factor.
The conversion factor calculation for physician fees is
updated annually based on (1) the Medicare Economic Index
(MEI), which measures the weighted average annual price changes
to the inputs needed to produce physician services, (2) the
Update Adjustment Factor (UAF), used to equate actual and
target (allowed) expenditures, and (3) allowed expenditures,
equal to the actual expenditures updated by the SGR.
The SGR sets both the cumulative and allowed expenditures
under the UAF formula and consists of the following components:
(1) the estimated percentage changes in physician fees, (2) the
estimated percentage changes in the number of fee-for-service
beneficiaries, (3) the estimated percentage growth in real
gross domestic product (GDP) (10-year moving average), (4) the
estimated percentage changes resulting from changes in laws and
regulations.\2\
---------------------------------------------------------------------------
\2\Medicare Physician Payment Updates and The Sustainable Growth
Rate (SGR) System, The Congressional Research Service, February 2013.
---------------------------------------------------------------------------
Under the SGR, physician fees are adjusted up or down to
meet the targeted spending levels. Actual expenditures are
compared to targets, starting with the base year of 1996. After
the base year, expenditure targets are calculated for each year
based on increases in population, input prices, GDP, and
changes in law and regulation. Actual expenditures are compared
to both cumulative and annual expenditure targets, and the
difference between targeted and actual spending is converted
into updates to physician fees. If cumulative physician
expenditures are below the expenditure target, then an annual
update is calculated based on several variables including the
Medicare Economic Index (MEI).\3\ However, when cumulative
physician expenditures exceed the expenditure target, the SGR
system reduces the annual update factor (and therefore, all
physician reimbursements under the fee schedule) to attempt to
bring cumulative expenditures in line with the target.\4\
---------------------------------------------------------------------------
\3\Created in 1975, the MEI is an inflation index similar to the
Consumer Price Index that includes the prices of inputs required for
the production of physician services including the physician's time,
the cost of hiring employees such as technicians and clerical staff,
rent, medical equipment, supplies, and drugs.
\4\For a detailed discussion of the workings of the sustainable
growth rate mechanism, see The Sustainable Growth Rate Formula for
Setting Medicare's Physician Payment Rates, Congressional Budget
Office, September 2006, (online at http://www.cbo.gov/ftpdocs/75xx/
doc7542/09-07-SGR-brief.pdf).
---------------------------------------------------------------------------
Each year since 2002, the statutory method for determining
the annual updates to the Medicare physician fee schedule, the
SGR, has resulted in a reduction in the reimbursement rates (or
a ``negative update''). With the exception of 2002, when a 4.8%
decrease was applied, Congress has passed a series of bills to
override the reductions.\5\ However, these legislative
overrides specified that annual increases in the payment rates
should not be considered a change in law or regulation for
purposes of determining the expenditure target, and the gap
between cumulative spending and the cumulative target became
larger than it would have been otherwise. If the SGR is not
reformed or overridden, physicians face a 24.4% reduction in
the conversion factor for the fee schedule update on January 1,
2014.\6\ Overriding the expected cuts will cost $131.9 billion.
---------------------------------------------------------------------------
\5\Medicare Physician Payment Updates and The Sustainable Growth
Rate (SGR) System, The Congressional Research Service, February 2013.
\6\MedPAC June 2013: Report to the Congress: Medicare and the
Health Care Delivery System.
---------------------------------------------------------------------------
There are several flaws with the existing approach to
payments for physicians' services in Medicare.
By design, the SGR treats all spending on physicians'
services the same--excesses beyond the target result in
reductions in future fees, and surpluses below the targets
result in increases in future fees. Those calculations are done
on a national basis, so individual physicians and practitioners
are actually rewarded for increasing the volume of services
they provide even as their actions contribute to future SGR
cuts. MedPAC notes ``a main flaw of the current SGR system is
its inability to differentiate by individual provider; it
neither rewards physicians who restrain unnecessary volume
growth nor penalizes those who contribute most to inappropriate
volume increases.''\7\ MedPAC also noted that ``the Commission
determined that the SGR system is fundamentally flawed and is
creating instability in the Medicare program for providers and
beneficiaries. This system, which links annual updates to
cumulative expenditures since 1996, has failed to restrain
volume growth and, in fact, may have exacerbated it.''\8\
---------------------------------------------------------------------------
\7\Medicare Payment Advisory Commission, Report to the Congress:
Medicare Payment Policy, Chapter 2, page 74, March 2011, (online at
http://www.medpac.gov/documents/Mar11_ EntireReport.pdf).
\8\MedPAC Report To Congress March 2012, page 89.
---------------------------------------------------------------------------
The SGR targets apply to the total nationwide physician
costs and not individual actions. Therefore, the reductions
required if total spending exceeds the target spending amount
apply equally to high quality providers as low quality
providers. Those who are efficient are penalized the same as
those who order excessive services.
The SGR targets are indifferent to appropriate increases in
utilization of services. From 2000 to 2012, MedPAC found that
Medicare spending for physician services increased by 72%--much
more rapidly than payment rate updates and the MEI over the
same period, and MedPAC noted that the ``[g]rowth in the volume
of services contributed much more to the rapid increase in
Medicare spending than payment rate updates.''\9\ Yet, the SGR
targets did not appropriately take into account the potential
for volume growth. With an emphasis on total spending, such a
system is indifferent to the needs of patients and has the
potential to reduce physician payment rates due to the overall
health care needs of Medicare seniors. Such a system has the
potential to erode the rate of physician reimbursement to such
an extent that it could encourage some physicians to limit the
number of Medicare beneficiaries they treat or exit the program
altogether.
---------------------------------------------------------------------------
\9\Medicare Payment Advisory Commission, Data Book: Health Care
Spending and the Medicare Program, June 2013.
---------------------------------------------------------------------------
The past three years have seen a dramatic slowing in the
rate of increase of Medicare per beneficiary costs, estimated
at 0.4% in 2012 and an average of 1.9% over the past three
years.\10\ Despite this recent slowing in cost growth and the
Congressional Budget Office's (CBO) revised 2013 Medicare
baseline projections, changing demographics and aging of the
population, projected to increase the number of Medicare
beneficiaries from 50 million today to almost 90 million by
2040, necessitate strategies to control costs while not
compromising patient outcomes or shifting additional burdens to
beneficiaries. Even if per-capita beneficiary costs remain
stable relative to GDP, the increase in the number of
beneficiaries will drive cost growth. Based on CBO estimates,
the aging of the population is expected to account for 60% of
the growth in Federal health expenditures over the next 25
years.\11\
---------------------------------------------------------------------------
\10\R. Kronick and R. Po, Growth in Medicare Spending Per
Beneficiary Continues to Hit Historic Lows, U.S. Department of Health
and Human Services, Office of the Assistant Secretary for Planning and
Evaluation (Jan. 7, 2013) (online at http://aspe.hhs.gov/health/
reports/2013/medicarespendinggrowth/ib.pdf).
\11\Congressional Budget Office, The 2012 Long-Term Budget Outlook
(June 5, 2012) (online at http://www.cbo.gov/sites/default/files/
cbofiles/attachments/06-05-Long-Term_Budget _Outlook_2.pdf).
---------------------------------------------------------------------------
Some have pointed to the SGR as one tool to constrain the
cost of the program. On this point the Committee disagrees. The
SGR has only been allowed to reduce the required provider rates
once, in 2002. Ever since, even proposed cuts would have been
offset with new spending, which has nullified the SGR's
effectiveness as a cost containment tool.
Further, the Committee finds that the continued presence of
the SGR has forestalled other reforms that might improve the
quality and value of the Medicare physician benefit for
beneficiaries, physicians, and CMS. A number of recent reports
have documented the challenges and opportunities provided by a
transformed health care delivery system. The Institute of
Medicine's (IOM) recent report, Best Care at Lower Cost,\12\
acknowledges that our current system is falling short with
regard to quality, outcomes, costs, and equity. Payment
policies have a strong influence on how care is delivered and
how well new knowledge and models of care are accepted.
Implementing and ensuring high value care ``requires
restructuring incentives to reward the best outcomes for
patients.''\13\ The IOM estimates that poor quality and care
inefficiencies account for 75,000 lost lives and $750 billion
(30% of 2009 total health care costs) in wasted expenditures
annually. Therefore, the Committee believes that the time to
repeal the SGR and move to a new payment system that rewards
quality is now.
---------------------------------------------------------------------------
\12\Institute of Medicine, Best Care at Lower Cost: The Path to
Continuously Learning Health Care in America (Sept. 6, 2012) (online at
http://www.iom.edu//media/Files/Report%20Files/2012/Best-Care/
Best%20Care%20at%20Lower%20Cost_Recs.pdf).
\13\Id.
---------------------------------------------------------------------------
Hearings
On May 5, 2011, the Subcommittee on Health held a hearing
entitled ``The Need to Move Beyond the SGR.'' This hearing
examined specific options for moving beyond SGR and included
testimony on what a new system of payment should resemble, how
quality should be measured, and paying for value over volume.
The Subcommittee received testimony from Dr. Mark B. McClellan,
Director of the Engelberg Center at the Brookings Institution;
Dr. M. Todd Williamson, President of the Coalition of State
Medical and National Specialty Societies; Harold Miller,
Executive Director of the Center for Healthcare Quality and
Payment Reform; Dr. Cecil B. Wilson, President of the American
Medical Association; Dr. David Hoyt, Executive Director of the
American College of Surgeons; Dr. Roland Goertz, President of
the American Academy of Family Physicians; and Dr. Michael
Chernew, Professor of Health Policy at Harvard Medical School.
On July 18, 2012, the Committee held a hearing entitled
``Using Innovation to Reform Medicare Physician Payment.'' This
hearing examined proposals on how Medicare can use innovative
ideas and payment/delivery models from the private sector to
reform the current physician payment system. The Subcommittee
received testimony from Mr. Scott Serota, President and Chief
Executive Officer for Blue Cross and Blue Shield Association;
Dr. Bruce Nash, Senior VP and CMO for Capital District
Physicians' Health Plan; Dr. David L. Bronson, President of the
American College of Surgeons; Dr. David Hoyt, Executive
Director of the American College of Surgeons; and Dr. Kavita
Patel, Managing Director for Clinical Transformation and
Delivery at the Brookings Institution.
On February 4, 2013, the Committee held a hearing entitled
``SGR: Data, Measures and Models; Building a Future Medicare
Physician Payment System.'' The hearing explored the following
issues: the flaws of the current volume based physician payment
system as described by the Medicare Payment Advisory Committee
Director Glenn Hackbarth; how to improve health through
regional cooperatives and population based models; and how to
measure quality and pay for value. The Subcommittee received
testimony from Glenn Hackbarth, Chairman of MedPAC; Harold
Miller, Executive Director of the Center for Healthcare Quality
and Payment Reform; Elizabeth Mitchell, CEO of the Maine Health
Management Coalition; Dr. Robert Berenson, Institute Fellow at
the Urban Institute; and Dr. Cheryl Damberg, Senior Policy
Researcher and Professor at Pardee RAND Graduate School.
Committee Consideration
On July 22 and 23, 2013, the Subcommittee on Health met in
open markup session and approved a Committee Print entitled
``Medicare Patient Access and Quality Improvement Act of
2013,'' as amended, for full Committee consideration by a voice
vote.
On July 24, 2013, Rep. Michael C. Burgess (TX) introduced
H.R. 2810, the ``Medicare Patient Access and Quality
Improvement Act of 2013,'' which was substantially similar to
the Committee Print approved by the Subcommittee on Health.
On July 30 and 31, 2013, the full Committee on Energy and
Commerce met in open markup session and considered H.R. 2810.
During the markup, the Committee considered an amendment
offered by Mr. Burgess, which was adopted by voice vote. On
July 31, 2013, the Committee ordered H.R. 2810 favorably
reported to the House, as amended, by a record vote of 51 ayes
and 0 nays.
Committee Votes
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee to list the record votes
on the motion to report legislation and amendments thereto. A
motion by Mr. Upton to order H.R. 2810 reported to the House,
as amended, was agreed to by a record vote of 51 ayes and 0
nays. The following reflects the recorded votes taken during
the Committee consideration:
Committee Oversight Findings
Pursuant to clause 3(c)(1) of rule XIII of the Rules of the
House of Representatives, the Committee held hearings and made
findings that are reflected in this report.
Statement of General Performance Goals and Objectives
In accordance with clause 3(c)(4) of rule XIII of the Rules
of the House of Representatives, the performance goals and
objectives of the Committee are reflected in the descriptive
portions of this report, including the goal that the flawed SGR
payment formula should be repealed. However, in its efforts,
the Committee would like to call attention to a few items of
importance with regards to the Committee's intent behind H.R.
2810.
The Committee wishes to clarify that it does not intend to
compromise patient access to innovative medical technologies or
treatments, such as wound care, with either its new Quality
Update Incentive Program or the Payment Model Choice Program.
The Committee recognizes that medical progress is dependent
upon providers willingness to adopt new and better treatments
and cures, whether the improvement is a new surgical technique,
a better drug or vaccine, or a new medical device or diagnostic
test. It is physicians' willingness to incorporate innovative
treatments into decision-making about appropriate treatment
options for patients that will determine whether an innovative
technology or treatment will define a new standard of care.
The Committee is concerned that few physicians will want to
risk receiving a low quality label or face financial penalties
as a result of using an innovative treatment or technology that
is too new to have been recognized as the standard of care at a
given point in time, even when the new treatment could provide
significant clinical benefits.
The Committee also recognizes that there is frequently a
lag between the availability of an innovative technology or
treatment and quality measurement development reflecting the
new treatment. In implementing the provisions of the bill, the
Committee expects the Secretary to establish a framework for
accommodating new treatments through technical adjustments to
quality scores that would apply to both the Quality Update
Incentive Program and the Payment Model Choice Program.
This framework should include a process by which either a
developer of an innovative medical technology, treatment, or
diagnostic test, or an individual provider or alternative
payment model may apply to the Secretary for adjustments to a
quality measure score if this innovative treatment or
technology meets certain criteria. In the case of an
alternative payment model or any efficiency measure applied to
eligible professionals under the Quality Update Incentive
Program (QUIP), the Secretary should avoid penalizing eligible
professionals for using innovative treatments or technologies
that could improve quality of care and care outcomes, but would
cost more than existing treatment options. In such cases, the
Committee expects that the Secretary would establish a similar
framework for making technical adjustments to the calculation
of the efficiency score or of a calculation of shared savings.
In both instances, the Secretary should consider making
adjustments to quality scores and benchmarks for new technology
if (1) the new technology provides substantial clinical
improvements in the diagnosis or treatment of a medical
condition than the use of current therapies, and (2) lack of an
adjustment would result in lower quality scores or penalize
early adopters of new treatments or technologies without cause.
The Committee has concerns that some provider groups might
be asked to perform and report on measures for which they have
no control, or that reporting requirements promulgated by CMS
might not allow their health information technology (HIT)
systems to participate with those within CMS. Specifically, the
Committee recognizes that pathologists are among a select group
of providers that do not have frequent, or potentially any,
direct contact with patients. Further, some have suggested that
pathologists use HIT platforms that are different from those
commonly used by other provider groups or commonly recognized
by CMS. The Committee would like to stress its intent that all
eligible individuals who would be subject to the QUIP should be
allowed to perform and report upon quality measures and
clinical improvement activities relevant to their practice.
Clinical improvement activities and quality measures, such as
patient experience, should take into account the
appropriateness of measuring the activity against the ability
of a provider to impact the outcome of the activity being
measured. In addition, the ability to transmit reported data to
CMS for the purposes of performance under QUIP is essential to
improving the provision of care under the Medicare program, and
CMS should strive to ensure that all providers are able to do
so electronically.
Health information technology will play a central role in
the transformation of the American healthcare system by
allowing the real time availability of information at the point
of care and in managing patient health and wellness. Access to
this information will not only reduce unnecessary and often
dangerous medical duplication, but also ensure that the most
appropriate and cost effective treatment is being delivered to
the patient. While technology has begun to change the way
doctors provide care and patients engage in their health, we
must recognize that these technologies will be unable to truly
transform our health system unless they can easily locate and
exchange health information.
Interoperability, or the ability for health technologies to
exchange information and use information that has been
exchanged, is central to the success of the alternative payment
models laid out in this Committee's bipartisan effort to
restructure the Medicare physician payment system. For this
effort to be successful, however, more must be done to bolster
interoperability. The Administration, acting through the Office
of the National Coordinator for Health IT (ONC), must provide
appropriate guidance to providers and to industry on its vision
for interoperability and work to engage all stakeholders in
adoption of those systems.
The Committee recognizes that, in order to empower
providers to be successful in reporting and performing on the
quality measures they develop, the Administration must adopt
interoperability standards that allow every health care
provider to access and use longitudinal data on the patients
they treat to make evidence-based decisions, coordinate care,
and improve health outcomes as quickly as possible. The
Committee believes adopting these standards by 2018 is
reasonable and should be the highest priority for ONC in order
to enable health care providers to measure, report, track, and
perform on the quality measures and payment updates required by
this legislation.
Finally, the Committee finds that this legislation leaves
unanswered many questions concerning the provision of health
care provider care in this country. The Committee believes that
removing the looming threat of the SGR--when most in Congress
see it as a broken policy--will support further reforms in the
future.
It is the Committee's view that problems related to work
force shortages, both among provider specialties and across the
entire workforce, can be solved by supporting policies that are
agnostic to the question of the provider specialty, but
incentivize the desired practice itself. The Committee sought
to demonstrate this through the creation of new codes for
complex care management for providers certified as medical
homes, whether they are primary or specialty in practice. If
the Congress is going to succeed in its efforts to deliver on
the Medicare promise to its seniors, it is important that
Congress recognize and support the delivery of clinical care by
well trained and qualified professionals, regardless of their
role in the health care continuum.
New Budget Authority, Entitlement Authority, and Tax Expenditures
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee finds that H.R.
2810, the ``Medicare Patient Access and Quality Improvement Act
of 2013,'' would result in increased expenditures of $175
billion over the 2014-2023 budget window.
Earmark, Limited Tax Benefits, and Limited Tariff Benefits
In compliance with clause 9(e), 9(f), and 9(g) of rule XXI
of the Rules of the House of Representatives, the Committee
finds that H.R. 2810 contains no earmarks, limited tax
benefits, or limited tariff benefits.
Committee Cost Estimate
The Committee adopts as its own the cost estimate prepared
by the Director of the Congressional Budget Office pursuant to
section 402 of the Congressional Budget Act of 1974.
Congressional Budget Office Estimate
Pursuant to clause 3(c)(3) of rule XIII of the Rules of the
House of Representatives, the following is the cost estimate
provided by the Congressional Budget Office pursuant to section
402 of the Congressional Budget Act of 1974:
September 13, 2013.
Hon. Fred Upton,
Chairman, Committee on Energy and Commerce,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 2810, the Medicare
Patient Access and Quality Improvement Act of 2013.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Lori Housman.
Sincerely,
Douglas W. Elmendorf.
Enclosure.
H.R. 2810--Medicare Patient Access and Quality Improvement Act of 2013
Summary: H.R. 2810 would replace the Sustainable Growth
Rate (SGR) formula, which determines the annual updates to
Medicare's payment rates for physician services, with new
systems for establishing those payment rates. CBO estimates
that enacting H.R. 2810 would increase direct spending by about
$175 billion over the 2014-2023 period. Pay-as-you-go
procedures apply to this legislation because it would affect
direct spending. (The legislation would not affect federal
revenues.)
H.R. 2810 would impose an intergovernmental mandate as
defined in the Unfunded Mandates Reform Act (UMRA) by
preempting state laws governing the evidentiary rules and
practices of medical malpractice claims. CBO estimates that the
costs of the intergovernmental mandate would be small and would
not exceed the threshold established in UMRA ($75 million in
2013, adjusted annually for inflation). The bill contains no
private-sector mandates as defined in UMRA.
Estimated cost to the Federal Government: The estimated
budgetary impact of H.R. 2810 is shown in the following table.
The costs of this legislation fall within budget functions 570
(Medicare) and 550 (health).
--------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, in billions of dollars--
-----------------------------------------------------------------------------------------------------
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2014-2018 2014-2023
--------------------------------------------------------------------------------------------------------------------------------------------------------
CHANGES IN DIRECT SPENDING
Estimated Budget Authority........................ 9.0 13.5 13.5 13.5 14.0 16.5 19.5 22.0 25.5 28.5 63.5 175.5
Estimated Outlays................................. 9.0 13.5 13.5 13.5 14.0 16.5 19.5 22.0 25.5 28.5 63.5 175.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
Background and major provisions
Under current law, Medicare's payment rates for physicians'
services are slated to drop by about 24 percent in January
2014. CBO projects those payment rates will increase by small
amounts in most subsequent years, but will remain below 2013
levels through the 2014-2023 period.
Medicare compensates physicians for services they provide
on the basis of a fee schedule that specifies payment rates for
each type of covered service. Payment rates are based on a
measure of the resources required to provide a given service
(measured in relative value units or RVUs), adjusted to account
for geographical differences in input prices, and translated
into a dollar amount by applying a ``conversion factor.'' The
SGR formula determines the annual update to the conversion
factor.
Current law includes the opportunity for physicians to earn
incentive payments for satisfactorily reporting quality data
through the Physician Quality Reporting System (PQRS). H.R.
2810 would build upon this reporting system in replacing the
SGR formula.
H.R. 2810 would replace the SGR formula with new payment
systems over the next several years, phased in as follows:
Between 2014 and 2018, the annual update to
Medicare's payment rates for services on the physician fee
schedule would equal 0.5 percent.
Beginning in 2019, Medicare's payment rates for
services on the physician fee schedule would be determined in
two broad ways:
Payment rates would be based on a
physician's performance in the Quality Update Incentive
Program (QUIP), or
Physicians could choose to be paid for
some or all of their Medicare services under an
Alternative Payment Model (APM).
The bill also would modify payment rates in certain
California counties, adjust relative value units for certain
physicians' services, and require the development of payment
codes that would encourage care coordination and the use of
medical homes.
Quality Update Incentive Program
Under the QUIP, Medicare would continue to compensate
physicians for services they provide on the basis of a fee
schedule that specifies payment rates for each type of covered
service. However, beginning in 2019, the annual update to the
conversion factor would be 0.5 percent and the payment amount
would be adjusted by a bonus or penalty based on how well a
provider performed on certain quality measures and clinical
practice improvement activities relative to thresholds stated
in the bill. The legislation would establish a process to
determine annual payment amounts as follows:
Prior to 2019, professional societies and other
stakeholders could submit to the Secretary of Health and Human
Services (HHS) quality measures and clinical practice
improvement activities that apply to a specific peer group
(generally, a medical or surgical specialty or subspecialty).
The Secretary would solicit public input, select
measures and activities for each peer group from those that
were submitted, and publish the final set prior to the
``performance period.''
The Secretary would determine a performance
period (probably a one-year period ending 6 to 12 months before
the start of a calendar year) that would be used to measure
provider performance for the purpose of determining the
adjustment to the conversion factor for the next calendar year.
Each provider would choose the appropriate peer
group for his or her services and would submit data on the
measures and activities selected by the Secretary for that peer
group to the Centers for Medicare and Medicaid Services (CMS).
Payment rates for providers would be determined
based on their performance relative to thresholds stated in the
bill. In addition to the 0.5 percent annual update to the
conversion factor:
Providers exceeding the top threshold
would get a positive 1 percent adjustment;
Providers not meeting the lower threshold
would get a negative 1 percent adjustment; and
Providers between the two thresholds
would not be adjusted.
Additionally, providers who did not
submit data on the quality measures would get a
negative 5 percent adjustment.
Those adjustments to the updates would be determined
separately for each provider, but the Secretary could also
establish a process that would apply to groups of providers
practicing together. The reporting requirements and payment
adjustments under the QUIP would be in addition to the existing
reporting requirements and payment adjustments under the PQRS.
Alternative payment model
Beginning in 2019, the legislation also would allow
providers to choose to participate in and be paid under
alternative payment models. H.R. 2810 does not describe a
specific payment model; rather, it would establish processes
for developing and implementing such models.
The legislation would require the Secretary of HHS to enter
into a contract with a private-sector organization referred to
as the APM contracting entity. Provider organizations or other
entities would submit proposed models to the contracting
entity. The contracting entity would then recommend models to
the Secretary that it concludes meet specified criteria,
including that a given model would probably reduce Medicare
spending without reducing the quality of care, or improve the
quality of care without increasing spending. In developing
those recommendations, the contracting entity would be
authorized to modify a proposal to increase the likelihood that
it would reduce Medicare spending or improve the quality of
care. Depending on the contracting entity's assessment of the
strength of the evidence that a particular model would reduce
spending or improve the quality of care, the recommendation
would specify that a model be either tested and evaluated in a
demonstration project or incorporated directly into the
Medicare program without such testing.
For models recommended for testing and evaluation through
demonstration programs, the Secretary and the Chief Actuary of
CMS would review the contracting entity's recommendations and
analyses. The Secretary would be authorized to modify
recommended models to increase the likelihood that they would
reduce spending or improve the quality of care. The Secretary
also would be authorized to waive requirements of title 18 of
the Social Security Act, as needed, solely for testing and
evaluating models under the demonstration program.
Models that undergo demonstration programs would operate
for three years and would include evaluation by an independent
evaluation entity. The legislation would allow the Secretary to
modify or terminate during testing any demonstrations that were
not meeting or expected to meet the specified criteria;
demonstrations could also be extended by the Secretary. If a
particular demonstration model proves successful, is
recommended by the independent evaluation entity, and is
certified by the Chief Actuary as meeting specified spending
criteria, it would go through a process for final approval and
implementation as a new payment model within the Medicare
program.
The legislation specifies similar criteria and processes
for models that the contracting entity recommends implementing
without testing and evaluation. The independent evaluation
entity would not be involved with such models. However, before
such a model can be implemented, the Chief Actuary would have
to certify that a model is expected not to increase program
spending (a stricter criterion than would be applied for
demonstration programs).
Under either APM track, providers would enter into a
contract with the Secretary to participate in a specific model.
Because such models could apply only to portions of a medical
practice (such as models addressing particular medical
conditions), providers could participate in more than one
model, as well as the QUIP.
Separately, the bill would appropriate $2 billion for items
and services not eligible for Medicare payment under current
law, payments for services that exceed current Medicare fee
schedule amounts, and the administrative costs for the APM
contracting entity and the independent evaluation entity.
Basis of estimate: Assuming enactment late in calendar year
2013, CBO estimates that enacting H.R. 2810 would increase
federal direct spending by $175.5 billion over the 2014-2023
period. The bill would eliminate the cuts in payment rates that
will occur under current law for services on the physician fee
schedule and instead set updates to payment rates for services
on the physician fee schedule at 0.5 percent a year. CBO
estimates those automatic updates would increase direct
spending by $63.5 billion through 2018, relative to the level
of spending that CBO projects based on the payment rates under
current law.
As described above, beginning in 2019, physicians would be
able to choose between the QUIP and APM mechanisms and among
APM options. The budgetary effects of the legislation would
depend, therefore, on how the QUIP and APM mechanisms operate
and on the proportion of spending affected by each of those
mechanisms.
CBO considered a number of plausible outcomes in terms of
both the share of Medicare spending for physicians' services
that would be subject to payment under the QUIP and APM
options, the relative cost of possible alternative payment
models, and the savings that could accrue to the Medicare
program through the use of APMs. Taking into account the effect
of the automatic 0.5 percent annual update that would begin in
2014, CBO estimates that enacting the QUIP and APM mechanisms
specified in H.R. 2810 would increase direct spending by about
$112 billion over the 2019-2023 period. That increase, in
combination with the $63.5 billion cost of the automatic
updates during the 2014-2018 period, would result in a total
increase in direct spending of $175.5 billion over the 2014-
2023 period.
CBO expects that physicians would generally choose to
participate in the payment options that offer the largest
payments for the services they provide. Their choices would
depend, therefore, on the alternative payment models that
become available. The legislation specifies processes and
safeguards for APMs, but it does not provide any details about
how payment rates would be determined for services furnished by
providers participating in an APM. Thus, there is significant
uncertainty about the alternative payment arrangements that
would be offered, how rates would be set, how many models would
be adopted, how many providers would participate, how
beneficiaries would be assigned, and other issues.
CBO expects that the process specified in the legislation
would result in the development and adoption of multiple APMs.
During the 2019-2023 period, CBO anticipates that most spending
through the APM mechanism would involve models being tested
through demonstrations, because relatively few models would be
likely to meet the criteria for operation without first being
tested in demonstration programs.
CBO expects that most of the alternative payment models
that would be adopted under this legislation would increase
Medicare spending. That judgment is based both on the outcomes
of previous demonstration projects in Medicare and on a
comparison of the process specified in this legislation for
identifying and adopting APMs with the process in current law
for designing, testing, and adopting innovative payment
systems.
CBO's review of numerous Medicare demonstration projects
found that very few succeeded in reducing Medicare spending.
Those demonstrations, which often tested approaches that had
been applied previously to privately insured populations,
generally involved providers whose characteristics made them
particularly likely to be successful at controlling spending.
However, despite those relatively favorable conditions, most of
those demonstrations either increased spending or had no
significant effect on spending.
Based on the lessons of prior demonstrations, Congress
enacted legislation that established the Center for Medicare &
Medicaid Innovation (CMMI). Two elements that distinguish the
process of developing new approaches under CMMI from prior
demonstrations are:
CMMI has enhanced authority to end unsuccessful
demonstrations. (Ending unsuccessful demonstrations in the past
was often difficult because some constituencies benefitted from
increased spending. Now, the costs of unsuccessful
demonstrations come out of CMMI's budget, which provides a
further incentive to end unsuccessful demonstrations.)
CMMI has the authority to expand innovations that
prove to be successful at reducing costs, improving the quality
of care, or both.
The structure specified by H.R. 2810 would replicate the
process being followed by CMMI in many ways. Although CMMI
would continue to operate under the legislation, it is likely
that some models that would, under current law, be developed by
CMS (with input from providers) and then tested by CMMI would,
under the bill, be developed by providers (with input from CMS)
and then tested or implemented as APMs. CBO expects that the
greater influence of providers within the design process
specified in H.R. 2810 would lead to smaller savings than would
arise from the development and adoption of new approaches
through the CMMI process.
In addition, CBO expects that providers would tend to
choose to participate in APMs that would increase their
payments from Medicare. For example, those providers whose
current practice style results in Medicare spending per patient
that is below the average level of spending would tend to
participate in APMs that would share some of the savings
relative to that average level with those providers. More
generally, different APMs would tend to use different measures
of success. As various APMs were developed over time, it is
likely that most physicians would be able to find and
participate in an alternative payment model or set of models
under which the physicians would appear to be better than
average.
The CMS chief actuary must concur with the judgment of the
APM contracting entity that a model recommended for testing and
evaluation in a demonstration program has a potential for
savings. CBO anticipates that some APMs would, in fact, result
in savings. On balance, however, CBO expects that the use of
the APM mechanism would tend to provide physicians with rewards
for good performance even when there was no change in their
performance relative to current law; that effect would tend to
generate higher Medicare spending than under current law.
Payments to physicians who do not participate in an APM,
and payment for services provided by a physician that are not
encompassed by an APM, would be made under the QUIP. Because
physicians would be able to select the set of measures that
would be used to determine their eligibility for the additional
payment adjustment of 1 percent, CBO expects that nearly all
services furnished under the QUIP beginning in 2019 would be
paid at 101 percent of the amount specified on the fee
schedule. To be sure, some physicians would be subject to
reductions of 1 percent or 5 percent for failure to meet the
performance or reporting requirements, but CBO expects most
such physicians would tend to be those for whom Medicare
patients make up a small share of their practices. As a result,
CBO anticipates that a very small share of Medicare spending
for physicians' services would be subject to those reductions.
CBO's estimate of the budgetary effects of H.R. 2810 also
includes the effects of several other changes to Medicare's
physician payment system specified in the legislation; those
other changes would have relatively small budgetary effects. In
particular, the legislation would modify payment rates in
certain California counties, adjust relative value units for
certain physicians' services, and require the development of
payment codes that would encourage care coordination and the
use of medical homes. CBO estimates those provisions would cost
$0.3 billion over the 2014-2023 period.
CBO's estimate of the budgetary effects of the legislation
incorporates the effects of changes in Medicare spending for
services furnished in the fee-for-service sector on payments to
Medicare Advantage (MA) plans and on receipts from Part B
premiums paid by beneficiaries. In addition, the legislation
includes the effects of changes in Medicare payment rates on
spending by the Department of Defense's TRICARE program. The MA
and TRICARE effects account for about $68 billion of the total
estimated increase in direct spending from the legislation over
the 2014-2023 period:
Medicare spending for the MA program would rise
because the ``benchmarks'' that Medicare uses to determine how
much the program pays for MA enrollees are adjusted for changes
in Medicare spending per beneficiary in the fee-for-service
sector. The benchmarks have already been set for 2014 and would
not be changed under the legislation, so there would be no
impact on MA spending under H.R. 2810 until 2015.
The TRICARE program pays Medicare coinsurance and
deductibles for military retirees. Those coinsurance and
deductible payments would be higher under the legislation
because the prices of physicians' services in Medicare would be
higher.
Beneficiaries enrolled in Part B of Medicare pay
premiums that offset about 25 percent of the costs of those
benefits. Such premium collections are recorded as offsetting
receipts (a credit against direct spending). Therefore, about
one-quarter of the increase in Medicare spending would be
offset by changes in those premium receipts. However, because
CBO's estimate of H.R. 2810 assumes enactment late in calendar
year 2013, the 2014 costs would not be included in the premium
established for calendar year 2014, but would affect premiums
in several subsequent years. Over the 2015-2023 period, CBO
estimates that aggregate Part B premiums receipts would rise by
about $53 billion.
Pay-As-You-Go considerations: The Statutory Pay-As-You-Go
Act of 2010 establishes budget-reporting and enforcement
procedures for legislation affecting direct spending or
revenues. The net changes in outlays that are subject to those
pay-as-you-go procedures are shown in the following table.
CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR H.R. 2810, AS ORDERED REPORTED BY THE HOUSE COMMITTEE ON ENERGY AND COMMERCE ON JULY 31, 2013
--------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, in billions of dollars--
-----------------------------------------------------------------------------------------------------
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2014-2018 2014-2023
--------------------------------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN THE DEFICIT
Statutory Pay-As-You-Go Impact.................... 9.0 13.5 13.5 13.5 14.0 16.5 19.5 22.0 25.5 28.5 63.5 175.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
Estimated impact on state, local, and tribal governments:
H.R. 2810 would shield health care providers from liability
claims based on any federal guidelines or standards developed,
recognized, or implemented under any health care provision of
the Affordable Care Act. That provision would impose an
intergovernmental mandate as defined in UMRA because it would
preempt state laws that allow for the use of such guidelines or
standards in medical malpractice claims. While the preemption
would limit the application of state laws, CBO estimates that
it would not impose significant costs and would fall well below
the threshold established in UMRA for intergovernmental
mandates ($75 million in 2013, adjusted annually for
inflation).
Estimated impact on the private sector: This bill contains
no new private-sector mandates as defined in UMRA.
Estimate prepared by: Federal costs: Lori Housman; Impact
on state, local, and tribal governments: Lisa Ramirez-Branum;
Impact on the private sector: Alexia Diorio.
Estimate approved by: Holly Harvey, Deputy Assistant
Director for Budget Analysis.
Federal Mandates Statement
The Committee adopts as its own the estimate of Federal
mandates prepared by the Director of the Congressional Budget
Office pursuant to section 423 of the Unfunded Mandates Reform
Act.
Duplication of Federal Programs
No provision of H.R. 2810 establishes or reauthorizes a
program of the Federal Government known to be duplicative of
another Federal program, a program that was included in any
report from the Government Accountability Office to Congress
pursuant to section 21 of Public Law 111-139, or a program
related to a program identified in the most recent Catalog of
Federal Domestic Assistance.
Disclosure of Directed Rule Makings
The Committee estimates that enacting H.R. 2810
specifically directs to be completed 6 specific rule makings
within the meaning of 5 U.S.C. 551.
Advisory Committee Statement
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
Applicability to Legislative Branch
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.
Section-by-Section Analysis of the Legislation
Section 1. Short title
This Act may be cited as the ``Medicare Patient Access and
Quality Improvement Act of 2013.''
Section 2. Reform of Sustainable Growth Rate (SGR) and Medicare payment
for physicians' services
Section 2 amends section 1848 of the Social Security Act
(SSA) to repeal the SGR and create a 5-year period of stable
payments while development of an improved FFS physician payment
system is undertaken. The annual update for participating
physicians during this period will be .5%.
As part of the period of transition, the Secretary will be
required to create peer cohorts that eligible professionals may
use to select the measure sets they will use to determine their
annual update under the QUIP beginning in year 6. These sets
can be made up of quality measures or clinical improvement
activities, where appropriate. All measures and clinical
improvement activities must conform to the best practices of
medicine and be made public, including all clinical data and
information related to the measures development. It is the
Committee's intent that the clinical practice improvement
activities are identified by professional organizations
recognized by multispecialty boards of certification or
equivalent certification boards, such as the American Board of
Medical Specialties or American Osteopathic Association. Moving
forward, the Secretary is charged with continually updating the
measure sets to ensure they remain meaningful over time.
Beginning in year 6, physician payment updates will be
determined by performance against quality measures and clinical
improvement activities contained in the QUIP. Measurement
periods will be 12 consecutive months in length (as close to
the payment consequence year as possible) with performance in 1
year impacting payment updates for the following year. Timely
performance feedback will be provided at least quarterly to
eligible professionals and should reflect data that is as real-
time as possible (no older than 6 months). The development of
the QUIP is required to be streamlined with existing programs
to reduce the regulatory burden on physicians and other
eligible professionals. Similarly, it is the Committee's intent
that implementation of all program provisions within this
section should follow a transparent, expedient, and least
administratively burdensome procedures.
There also is a new Section 1848A of the SSA creating a
pathway for the testing and implementation of alternative
payment models. The goal of this new pathway is to support
eligible professional's additional payment options under the
Payment Model Choice Program that support higher quality care
and allow greater flexibility for both patients and providers.
Such a pathway is not designed to recreate the Center for
Medicare and Medicaid Innovation (CMMI), but to present
opportunities for the broad adoption of models not allowed
under CMMI or other venues. This pathway would rest upon CMS
contracting with outside entities to accept and evaluate
submissions and test/oversee performance demonstrations for
appropriate model options. Only those that are deemed to be
cost effective and high in quality would be allowed to move
from the testing phase to the Secretary for possible inclusion
in a list of payment options for all fee schedule providers
under Medicare Part B.
Beginning in 2017, this section also improves the
geographic adjustment method used to calculate provider
payments in California. Currently, Medicare providers' payments
are adjusted for geographic costs variations as determined by
the fee schedule area in which a provider operates. To more
accurately account for locality cost differences in California,
this legislation requires the use of Metropolitan Statistical
Areas (MSAs), as determined by the Office of Management and
Budget, as the new fee schedule areas and establishes a single
rest-of-State fee schedule area for those providers outside of
the MSAs. From 2017 to 2021, the legislation provides for a 5-
year transition for those providers included in the rest-of-
State payment locality by progressively placing higher weight
on the new system calculation over the previous system
calculation. This provision also allows for hold harmless
protections, which prevents any provider from receiving a lower
geographic payment adjustment under the new system than they
would under the previous system.
Section 2 also provides for greater payment accuracy under
the Medicare Part B fee schedule by which providers are
currently paid. A lack of accurate and meaningful data on costs
has hampered the ability of Medicare to review the accuracy of
payments for services and identify what services are improperly
valued. Section 5 would ensure that providers could be
compensated for the cost of submitting such data and directs
Medicare to identify improperly valued services under the fee
schedule that would result in a net reduction of 1% of the
projected amount of expenditures for a year during 2016 through
2018.
Finally, section 2 provides for greater transparency in
determining recent provider payment reductions by requiring the
Secretary to make publicly available the data used to establish
multiple procedure payment reductions for imaging services.
Relating to demonstration programs, the Committee supports
the development of new and innovative modalities of treatment,
which show promise for either improved outcomes or lower costs.
An estimated 6.5 million Americans suffer from chronic, hard-
to-heal wounds each year. In that regard, CMS should consider
initiating a pilot study on the health outcomes of new medical
technologies for treating hard-to-heal wounds, including an
examination of medical technologies that are not currently
eligible for reimbursement in CMS programs.
Section 3. Expanding availability of Medicare data
Section 3 amends section 1874(e) of the SSA to allow
qualified entities to use and disseminate de-identified
Medicare claims data to authorized users for the purpose of
improving the quality or provision of health care, or to
support the building and testing of new models of payment under
the Medicare program.
Section 4. Encouraging care coordination and medical homes
Section 4 amends 1848(b) of the SSA to require the
Secretary of Health and Human Services to develop one or more
codes (HCPCS) for complex chronic care management for use in
caring for patients with complex chronic care needs. Providers
of services under Medicare Part B must be certified as a
patient-centered medical home or have received equivalent
status.
Section 5. Miscellaneous
Section 5 would require a number of reports from various
entities, including a report on the viability of transforming
fee-for-service Medicare Part B payment into a system of
bundled payments. Other reports include, a report from the
Secretary, who is required to solicit feedback from provider
organizations on defining non-acute care linked episodes of
care, reports by GAO evaluating the QUIP and Payment Model
Choice Program, and a report by the Secretary on the potential
to include clinical decision support mechanisms into Medicare.
Lastly, Section 5 would create standard of care protections
for patients and providers by ensuring that quality
determinations for the purpose of payment by the Federal
government shall not be deemed to represent the standard of
care in a medical liability case.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, existing law in which no change is
proposed is shown in roman):
SOCIAL SECURITY ACT
* * * * * * *
TITLE XVIII--HEALTH INSURANCE FOR THE AGED AND DISABLED
* * * * * * *
Part B--Supplementary Medical Insurance Benefits for the Aged and
Disabled
* * * * * * *
PAYMENT FOR PHYSICIANS' SERVICES
Sec. 1848. (a) Payment Based on Fee Schedule.--
(1) In general.--Effective for all physicians'
services (as defined in subsection (j)(3)) furnished
under this part during a year (beginning with 1992) for
which payment is otherwise made on the basis of a
reasonable charge or on the basis of a fee schedule
under section 1834(b), payment under this part [shall
instead] shall, subject to section 1848A, instead be
based on the lesser of--
(A) * * *
* * * * * * *
(8) Incentives for quality reporting.--
(A) Adjustment.--
(i) In general.--[With respect to]
Subject to clause (iii), with respect
to covered professional services
furnished by an eligible professional
during 2015 or any subsequent year, if
the eligible professional does not
satisfactorily submit data on quality
measures for covered professional
services for the quality reporting
period for the year (as determined
under subsection (m)(3)(A)), the fee
schedule amount for such services
furnished by such professional during
the year (including the fee schedule
amount for purposes of determining a
payment based on such amount) shall be
equal to the applicable percent of the
fee schedule amount that would
otherwise apply to such services under
this subsection (determined after
application of paragraphs (3), (5), and
(7), but without regard to this
paragraph).
* * * * * * *
(iii) Application to eligible
professionals not reporting.--With
respect to covered professional
services (as defined in subsection
(k)(3)) furnished by an eligible
professional during 2019 or any
subsequent year, if the eligible
professional does not submit data for
the performance period (as defined in
subsection (q)(2)(B)) with respect to
such year on, subject to subsection
(q)(1)(D), the quality measures and, as
applicable, clinical practice
improvement activities within the final
core measure set under subsection
(k)(9)(F) applicable to the peer cohort
of such provider, the fee schedule
amount for such services furnished by
such professional during the year
(including the fee schedule amount for
purposes of determining a payment based
on such amount) shall be equal to 95
percent (in lieu of the applicable
percent) of the fee schedule amount
that would otherwise apply to such
services under this subsection
(determined after application of
paragraphs (3), (5), and (7), but
without regard to this paragraph). The
Secretary shall develop a minimum per
year caseload threshold, with respect
to eligible professionals, and the
previous sentence shall not apply to
eligible professionals with a caseload
for a year below such threshold for
such year.
* * * * * * *
(b) Establishment of Fee Schedules.--
(1) * * *
* * * * * * *
(8) Encouraging care coordination and medical
homes.--
(A) In general.--In order to promote the
coordination of care by an applicable provider
(as defined in subparagraph (B)) for
individuals with complex chronic care needs who
are furnished items and services by multiple
physicians and other suppliers and providers of
services, the Secretary shall--
(i) develop one or more HCPCS codes
for complex chronic care management
services for individuals with complex
chronic care needs; and
(ii) for such services furnished on
or after January 1, 2015, by an
applicable provider, make payment (as
the Secretary determines to be
appropriate) under the fee schedule
under this section using such HCPCS
codes.
(B) Applicable provider defined.--For
purposes of this paragraph, the term
``applicable provider'' means a physician (as
defined in section 1861(r)(1)) or a physician
assistant or nurse practitioner (as defined in
section 1861(aa)(5)(A)) who--
(i) is certified as a medical home
(by achieving an accreditation status
of level 3 by the National Committee
for Quality Assurance);
(ii) is recognized as a patient-
centered specialty practice by the
National Committee for Quality
Assurance;
(iii) has received equivalent
certification (as determined by the
Secretary); or
(iv) meets such other comparable
qualifications as the Secretary
determines to be appropriate.
(C) Budget neutrality.--The budget neutrality
provision under subsection (c)(2)(B)(ii)(II)
shall apply in establishing the payment under
subparagraph (A)(ii).
(D) Single applicable provider payment.--In
carrying out this paragraph, the Secretary
shall only make payment to a single applicable
provider for complex chronic care management
services furnished to an individual.
(c) Determination of Relative Values for Physicians'
Services.--
(1) * * *
(2) Determination of relative values.--
(A) * * *
(B) Periodic review and adjustments in
relative values.--
(i) * * *
* * * * * * *
(v) Exemption of certain reduced
expenditures from budget-neutrality
calculation.--The following reduced
expenditures, as estimated by the
Secretary, shall not be taken into
account in applying clause (ii)(II):
(I) * * *
* * * * * * *
(VIII) Reductions for
misvalued physicians'
services.--Reduced expenditures
attributable to subparagraph
(M) for fiscal years 2016,
2017, and 2018.
* * * * * * *
(M) Adjustments for misvalued physicians'
services.--
(i) In general.--Only with respect to
fee schedules established for 2016,
2017, and 2018 (and not for subsequent
years), the Secretary shall--
(I) identify, based on the
data reported under paragraph
(8) and other relevant data,
misvalued services for which
adjustments to the relative
values established under this
paragraph would result in a
reduction in expenditures under
the fee schedule under this
section, with respect to such
year, of not more than 1
percent of the projected amount
of expenditures under such fee
schedule for such year; and
(II) make such adjustments
for each such year so as only
to result in such a reduction
for such year.
(ii) No effect on subsequent years.--
A reduction under this subparagraph for
a year shall not affect any reduction
for any subsequent year.
(iii) Rule of construction relating
to undervalued codes.--Nothing in this
subparagraph shall be construed as
preventing the Secretary from
increasing the relative values for
codes that are undervalued.
* * * * * * *
(7) Physician reporting system to improve accuracy of
relative values.--
(A) In general.--The Secretary shall
implement a system for the periodic reporting
by physicians of data on the accuracy of
relative values under this subsection, such as
data relating to service volume and time. Such
data shall be submitted in a form and manner
specified by the Secretary and shall, as
appropriate, incorporate data from existing
sources of data, patient scheduling systems,
cost accounting systems, and other similar
systems.
(B) Identification of reporting cohort.--Not
later than January 1, 2015, the Secretary shall
establish a mechanism for physicians to
participate under the reporting system under
this paragraph, all of whom shall collectively
be referred to under this paragraph as the
``reporting group''. The reporting group shall
include physicians across settings that
collectively represent a range of specialties
and practitioner types, furnish a range of
physicians' services, and serve a range of
patient populations.
(C) Incentive to report.--Under the system
under this paragraph, the Secretary may provide
for such payments under this part to physicians
included in the reporting group as the
Secretary determines appropriate to compensate
such physicians for reporting data under the
system. Such payments shall be provided in such
form and manner as specified by the Secretary.
In carrying out this subparagraph, reporting by
such a physician under this paragraph shall not
be treated as the furnishing of physicians'
services for purposes of applying this section.
(D) Funding.--To carry out this paragraph
(other than with respect to payments made under
subparagraph (C)), in addition to funds
otherwise appropriated, the Secretary shall
provide for the transfer from the Federal
Supplementary Medical Insurance Trust Fund
under section 1841 of $1,000,000 to the Centers
for Medicare & Medicaid Services Program
Management Account for each fiscal year
beginning with fiscal year 2014. Amounts
transferred under this subparagraph for a
fiscal year shall be available until expended.
(d) Conversion Factors.--
(1) Establishment.--
(A) In general.--The conversion factor for
each year shall be the conversion factor
established under this subsection for the
previous year (or, in the case of 1992,
specified in subparagraph (B)) adjusted by the
update (established under paragraph (3)) for
the year involved (for years before 2001) and,
for years beginning with 2001, multiplied by
the update (established under paragraph (4) or
a subsequent paragraph or section 1848A) for
the year involved.
* * * * * * *
(4) Update for [years beginning with 2001] 2001,
2002, and 2003.--
(A) In general.--Unless otherwise provided by
law, subject to the budget-neutrality factor
determined by the Secretary under subsection
(c)(2)(B)(ii) and subject to adjustment under
subparagraph (F), the update to the single
conversion factor established in paragraph
(1)(C) for [a year beginning with 2001] 2001,
2002, and 2003 is equal to the product of--
(i) * * *
* * * * * * *
(15) Update for 2014 through 2018.--The update to the
single conversion factor established in paragraph
(1)(C) for each of 2014 through 2018 shall be 0.5
percent.
(16) Update beginning with 2019.--
(A) In general.--Subject to subparagraph (B),
the update to the single conversion factor
established in paragraph (1)(C) for each year
beginning with 2019 shall be 0.5 percent.
(B) Adjustment.--In the case of an eligible
professional (as defined in subsection (k)(3))
who does not have a payment arrangement
described in section 1848A(a) in effect, the
update under subparagraph (A) for a year
beginning with 2019 shall be adjusted by the
applicable quality adjustment determined under
subsection (q)(3) for the year involved.
(e) Geographic Adjustment Factors.--
(1) * * *
* * * * * * *
(6) Use of msas as fee schedule areas in
california.--
(A) In general.--Subject to the succeeding
provisions of this paragraph and
notwithstanding the previous provisions of this
subsection, for services furnished on or after
January 1, 2017, the fee schedule areas used
for payment under this section applicable to
California shall be the following:
(i) Each Metropolitan Statistical
Area (each in this paragraph referred
to as an ``MSA''), as defined by the
Director of the Office of Management
and Budget as of December 31 of the
previous year, shall be a fee schedule
area.
(ii) All areas not included in an MSA
shall be treated as a single rest-of-
State fee schedule area.
(B) Transition for msas previously in rest-
of-state payment locality or in locality 3.--
(i) In general.--For services
furnished in California during a year
beginning with 2017 and ending with
2021 in an MSA in a transition area (as
defined in subparagraph (D)), subject
to subparagraph (C), the geographic
index values to be applied under this
subsection for such year shall be equal
to the sum of the following:
(I) Current law component.--
The old weighting factor
(described in clause (ii)) for
such year multiplied by the
geographic index values under
this subsection for the fee
schedule area that included
such MSA that would have
applied in such area (as
estimated by the Secretary) if
this paragraph did not apply.
(II) MSA-based component.--
The MSA-based weighting factor
(described in clause (iii)) for
such year multiplied by the
geographic index values
computed for the fee schedule
area under subparagraph (A) for
the year (determined without
regard to this subparagraph).
(ii) Old weighting factor.--The old
weighting factor described in this
clause--
(I) for 2017, is \5/6\; and
(II) for each succeeding
year, is the old weighting
factor described in this clause
for the previous year minus \1/
6\.
(iii) MSA-based weighting factor.--
The MSA-based weighting factor
described in this clause for a year is
1 minus the old weighting factor under
clause (ii) for that year.
(C) Hold harmless.--For services furnished in
a transition area in California during a year
beginning with 2017, the geographic index
values to be applied under this subsection for
such year shall not be less than the
corresponding geographic index values that
would have applied in such transition area (as
estimated by the Secretary) if this paragraph
did not apply.
(D) Transition area defined.--In this
paragraph, the term ``transition area'' means
each of the following fee schedule areas for
2013:
(i) The rest-of-State payment
locality.
(ii) Payment locality 3.
(E) References to fee schedule areas.--
Effective for services furnished on or after
January 1, 2017, for California, any reference
in this section to a fee schedule area shall be
deemed a reference to a fee schedule area
established in accordance with this paragraph.
(f) Sustainable Growth Rate.--
(1) Publication.--The Secretary shall cause to have
published in the Federal Register not later than--
(A) * * *
(B) November 1 of each succeeding year
through 2013 the sustainable growth rate for
such succeeding year and each of the preceding
2 years.
(2) Specification of growth rate.--The sustainable
growth rate for all physicians' services for a fiscal
year (beginning with fiscal year 1998 and ending with
fiscal year 2000) and a year beginning with 2000 and
ending with 2013 shall be equal to the product of--
(A) * * *
* * * * * * *
(i) Miscellaneous Provisions.--
(1) Restriction on administrative and judicial
review.--There shall be no administrative or judicial
review under section 1869 or otherwise of--
(A) * * *
* * * * * * *
(D) the establishment of geographic
adjustment factors under subsection (e), [and]
(E) the establishment of the system for the
coding of physicians' services under this
section[.], and
(F) the implementation of subsection (q).
* * * * * * *
(j) Definitions.--In this section:
(1) * * *
(2) Fee schedule area.--[The term] Except as provided
in subsection (e)(6)(D), the term ``fee schedule area''
means a locality used under section 1842(b) for
purposes of computing payment amounts for physicians'
services.
* * * * * * *
(k) Quality Reporting System.--
(1) In general.--The Secretary shall implement a
system for the reporting by eligible professionals of
data on quality measures and, if applicable, clinical
practice improvement activities, specified under
paragraph (2). Such data shall be submitted in a form
and manner specified by the Secretary (by program
instruction or otherwise), which may include submission
of such data on claims under this part.
(2) Use of consensus-based quality measures.--
(A) * * *
* * * * * * *
(C) For 2010 [and subsequent years] through
2018.--
(i) In general.--Subject to clause
(ii), for purposes of reporting data on
quality measures for covered
professional services furnished during
2010 and each subsequent year (before
2019), subject to subsection (m)(3)(C),
the quality measures (including
electronic prescribing quality
measures) specified under this
paragraph shall be such measures
selected by the Secretary from measures
that have been endorsed by the entity
with a contract with the Secretary
under section 1890(a).
* * * * * * *
(D) For 2019 and subsequent years.--For
purposes of reporting data on quality measures
and, as applicable clinical practice
improvement activities, for covered
professional services furnished during the
performance period (as defined in subsection
(q)(2)(B)) with respect to 2019 and the
performance period with respect to each
subsequent year, subject to subsection
(q)(1)(D), the quality measures and clinical
practice improvement activities specified under
this paragraph shall be, with respect to an
eligible professional, the quality measures
and, as applicable, clinical practice
improvement activities within the final core
measure set under paragraph (9)(F) applicable
to the peer cohort of such provider and year
involved.
[(D)] (E) Opportunity to provide input on
measures for 2009 [and subsequent years].--For
each quality measure (including an electronic
prescribing quality measure) adopted by the
Secretary under subparagraph (B) (with respect
to 2009) or subparagraph (C), the Secretary
shall ensure that eligible professionals have
the opportunity to provide input during the
development, endorsement, or selection of
measures applicable to services they furnish.
(3) [Covered professional services and eligible
professionals defined] Definitions.--For purposes of
this subsection:
(A) * * *
* * * * * * *
(C) Clinical practice improvement
activities.--The term ``clinical practice
improvement activity'' means an activity that
relevant eligible professional organizations
and other relevant stakeholders identify as
improving clinical practice or care delivery
and that the Secretary determines, when
effectively executed, is likely to result in
improved outcomes.
(D) Eligible professional organization.--The
term ``eligible professional organization''
means a professional organization as defined by
nationally recognized multispecialty boards of
certification or equivalent certification
boards.
(E) Peer cohort.--The term ``peer cohort''
means a peer cohort identified on the list
under paragraph (9)(B), as updated under clause
(ii) of such paragraph.
* * * * * * *
(7) Limitations on review.--There shall be no
administrative or judicial review under section 1869,
section 1878, or otherwise, of the development and
implementation of the reporting system under paragraph
(1), including identification of quality measures under
paragraph (2) [and the application of paragraphs (4)
and (5)], the application of paragraphs (4) and (5),
and the implementation of paragraph (9).
* * * * * * *
(9) Establishment of final core measure sets.--
(A) In general.--Under the system under this
subsection--
(i) for each peer cohort identified
under subparagraph (B) and in
accordance with this paragraph, there
shall be published a final core measure
set under subparagraph (F), which shall
consist of quality measures and may
also consist of clinical practice
improvement activities, with respect to
which eligible professionals shall,
subject to subsection (m)(3)(C), be
assessed for purposes of determining,
for years beginning with 2019, the
quality adjustment under subsection
(q)(3) applicable to such
professionals; and
(ii) each eligible professional shall
self-identify, in accordance with
subparagraph (B), within such a peer
cohort for purposes of such
assessments.
(B) Peer cohorts.--The Secretary shall
identify (and publish a list of) peer cohorts
by which eligible professionals shall self-
identify for purposes of this subsection and
subsection (q) with respect to a performance
period (as defined in subsection (q)(2)(B)) for
a year beginning with 2019. For purposes of
this subsection and subsection (q), the
Secretary shall develop one or more peer
cohorts for multispecialty groups, each of
which shall be included as a peer cohort under
this subparagraph. Such self-identification
will be made through such a process and at such
time as specified under the system under this
subsection. Such list--
(i) shall include, as peer cohorts,
provider specialties defined by
nationally recognized multispecialty
boards of certification or equivalent
certification boards and such other
cohorts as established under this
section in order to capture
classifications of providers across
eligible professional organizations and
other practice areas, groupings, or
categories; and
(ii) shall be updated from time to
time.
(C) Quality measures for core measure sets.--
(i) Development.--Under the system
under this subsection there shall be
established a process for the
development of quality measures under
this subparagraph for purposes of
potential inclusion of such measures in
core measure sets under this paragraph.
Under such process--
(I) there shall be
coordination, to the extent
possible, across organizations
developing such measures;
(II) eligible professional
organizations and other
relevant stakeholders may
submit best practices and
clinical practice guidelines
for the development of quality
measures that address quality
domains (as defined under
clause (ii)) for potential
inclusion in such core measure
sets;
(III) there is encouraged to
be developed, as appropriate,
meaningful outcome measures (or
quality of life measures in
cases for which outcomes may
not be a valid measurement),
functional status measures, and
patient experience measures;
and
(IV) measures developed under
this clause shall be developed,
to the extent possible, in
accordance with best practices
and clinical practice
guidelines.
(ii) Quality domains.--For purposes
of this paragraph, the term ``quality
domains'' means at least the following
domains:
(I) Clinical care.
(II) Safety.
(III) Care coordination.
(IV) Patient and caregiver
experience.
(V) Population health and
prevention.
(D) Process for establishing core measure
sets.--
(i) In general.--Under the system
under this subsection, for purposes of
subparagraph (A), there shall be
established a process to approve final
core measure sets under this paragraph
for peer cohorts. Each such final core
measure set shall be composed of
quality measures (and, as applicable,
clinical practice improvement
activities) with respect to which
eligible professionals within such peer
cohort shall report under this
subsection and be assessed under
subsection (q). Such process shall
provide--
(I) for the establishment of
criteria, which shall be made
publicly available before the
request is made under clause
(ii), for selecting such
measures and activities for
potential inclusion in such a
final core measure set; and
(II) that all peer cohorts,
and to the extent practicable
all quality domains, are
addressed by measures and, as
applicable, clinical practice
improvement activities selected
to be included in a core
measure set under this
paragraph, which may include
through the use of such a
measure or clinical practice
improvement activity that
addresses more than one such
domain or cohort.
(ii) Solicitation of public input on
quality measures and clinical practice
improvement activities.--Under the
process established under clause (i),
relevant eligible professional
organizations and other relevant
stakeholders shall be requested to
identify and submit quality measures
and clinical practice improvement
activities (as defined in paragraph
(3)(C)) for selection under this
paragraph. For purposes of the previous
sentence, measures and activities may
be submitted regardless of whether such
measures were previously published in a
proposed rule or endorsed by an entity
with a contract under section 1890(a).
(E) Core measure sets.--
(i) In general.--Under the process
established under subparagraph (D)(i),
the Secretary--
(I) shall select, from
quality measures described in
clause (ii) applicable to a
peer cohort, quality measures
to be included in a core
measure set for such cohort;
(II) shall, to the extent
there are insufficient quality
measures applicable to a peer
cohort to address one or more
applicable quality domains,
select to be included in a core
measure set for such cohort
such clinical practice
improvement activities
described in clause (ii)(IV) as
are needed and available to
sufficiently address such an
applicable domain with respect
to such peer cohort; and
(III) may select, to the
extent determined appropriate,
any additional clinical
practice improvement activities
described in clause (ii)(IV)
applicable to a peer cohort to
be included in a core measure
set for such cohort.
Activities selected under this
paragraph shall be selected with
consideration of best practices and
clinical practice guidelines identified
under subparagraph (C)(i)(II).
(ii) Sources of quality measures and
clinical practice improvement
activities.--A quality measure or
clinical practice improvement activity
selected for inclusion in a core
measure set under the process under
subparagraph (D)(i) shall be--
(I) a measure endorsed by a
consensus-based entity;
(II) a measure developed
under paragraph (2)(C) or a
measure otherwise applied or
developed for a similar purpose
under this section;
(III) a measure developed
under subparagraph (C); or
(IV) a measure or activity
submitted under subparagraph
(D)(ii).
A measure or activity may be selected
under this subparagraph, regardless of
whether such measure or activity was
previously published in a proposed
rule. A measure so selected shall be
evidence-based but (other than a
measure described in subclause (I))
shall not be required to be consensus-
based.
(iii) Transparency.--Before
publishing in a final regulation a core
measure set under clause (i) as a final
core measure set under subparagraph
(F), the Secretary shall--
(I) submit for publication in
applicable specialty-
appropriate peer-reviewed
journals such core measure set
under clause (i) and the method
for developing and selecting
measures within such set,
including clinical and other
data supporting such measures,
and, as applicable, the method
for selecting clinical practice
improvement activities included
within such set; and
(II) regardless of whether or
not the core measure set or
method is published in such a
journal under subclause (I),
provide for notice of the
proposed regulation in the
Federal Register, including
with respect to the applicable
methods and data described in
subclause (I), and a period for
public comment thereon.
(F) Final core measure sets.--Not later than
November 15 of the year prior to the first day
of a performance period, the Secretary shall
publish a final regulation in the Federal
Register that includes a final core measure set
(and the applicable methods and data described
in subparagraph (E)(iii)(I)) for each peer
cohort to be applied for such performance
period.
(G) Periodic review and updates.--
(i) In general.--In carrying out this
paragraph, under the system under this
subsection, there shall periodically be
reviewed--
(I) the quality measures and
clinical practice improvement
activities selected for
inclusion in final core measure
sets under this paragraph for
each year such measures and
activities are to be applied
under this subsection or
subsection (q) to ensure that
such measures and activities
continue to meet the conditions
applicable to such measures and
activities for such selection;
and
(II) the final core measure
sets published under
subparagraph (F) for each year
such sets are to be applied to
peer cohorts of eligible
professionals to ensure that
each applicable set continues
to meet the conditions
applicable to such sets before
being so published.
(ii) Collaboration with
stakeholders.--In carrying out clause
(i), relevant eligible professional
organizations and other relevant
stakeholders may identify and submit
updates to quality measures and
clinical practice improvement
activities selected under this
paragraph for inclusion in final core
measure sets as well as any additional
quality measures and clinical practice
improvement activities. Not later than
November 15 of the year prior to the
first day of a performance period,
submissions under this clause shall be
reviewed.
(iii) Additional, and updates to,
measures and activities.--Based on the
review conducted under this
subparagraph for a period, as needed,
there shall be--
(I) selected additional, and
updates to, quality measures
and clinical practice
improvement activities selected
under this paragraph for
potential inclusion in final
core measure sets in the same
manner such quality measures
and clinical practice
improvement activities are
selected under this paragraph
for such potential inclusion;
(II) removed, from final core
measure sets, quality measures
and clinical practice
improvement activities that are
no longer meaningful; and
(III) updated final core
measure sets published under
subparagraph (F) in the same
manner as such sets are
approved under such
subparagraph.
For purposes of this subsection and
subsection (q), a final core measure
set, as updated under this
subparagraph, shall be treated in the
same manner as a final core measure set
published under subparagraph (F).
(iv) Transparency.--
(I) Notification required for
certain updates.--In the case
of an update under subclause
(II) or (III) of clause (iii)
that adds, materially changes,
or removes a measure or
activity from a measure set,
such update shall not apply
under this subsection or
subsection (q) unless
notification of such update is
made available to applicable
eligible professionals.
(II) Public availability of
updated final core measure
sets.--Subparagraph (E)(iii)
shall apply with respect to
measure sets updated under
subclause (II) or (III) of
clause (iii) in the same manner
as such subparagraph applies to
applicable core measure sets
under subparagraph (E).
(H) Coordination with existing programs.--The
development and selection of quality measures
and clinical practice improvement activities
under this paragraph shall, as appropriate, be
coordinated with the development and selection
of existing measures and requirements, such as
the development of the Physician Compare
Website under subsection (m)(5)(G) and the
application of resource use management under
subsection (n). To the extent feasible, such
measures and activities shall align with
measures used by other payers and with measures
and activities in use under other programs in
order to streamline the process of such
development and selection under this paragraph.
The Secretary shall develop a plan to integrate
reporting on quality measures under this
subsection with reporting requirements under
subsection (o) relating to the meaningful use
of certified EHR technology.
(I) Consultation with relevant eligible
professional organizations and other relevant
stakeholders.--Relevant eligible professional
organizations (as defined in paragraph (3)(D))
and other relevant stakeholders, including
State and national medical societies, shall be
consulted in carrying out this paragraph.
(J) Optional application.--The process under
section 1890A is not required to apply to the
development or selection of measures under this
paragraph.
* * * * * * *
(m) Incentive Payments for Quality Reporting.--
(1) * * *
* * * * * * *
(3) Satisfactory reporting and successful electronic
prescriber and described.--
(A) * * *
* * * * * * *
(C) Satisfactory reporting measures for group
practices.--
(i) In general.--By January 1, 2010,
the Secretary shall establish and have
in place a process under which eligible
professionals in a group practice (as
defined by the Secretary) shall be
treated as satisfactorily submitting
data on quality measures under
subparagraph (A) and as meeting the
requirement described in subparagraph
(B)(ii) for covered professional
services for a reporting period (or,
for purposes of subsection (a)(5), for
a reporting period for a year, or, for
purposes of subsection (a)(8), for a
quality reporting period for the year)
if, in lieu of reporting measures under
subsection (k)(2)(C), the group
practice reports measures determined
appropriate by the Secretary, such as
measures that target high-cost chronic
conditions and preventive care, in a
form and manner, and at a time,
specified by the Secretary. Such
process shall, beginning for 2019,
treat eligible professionals in such a
group practice as reporting on measures
for purposes of application of
subsections (q) and (a)(8)(A)(iii) if,
in lieu of reporting measures under
subsection (k)(2)(D), the group
practice reports measures determined
appropriate by the Secretary.
* * * * * * *
(D) Satisfactory reporting measures through
participation in a qualified clinical data
registry.--[For 2014 and subsequent years] For
each of 2014 through 2018, the Secretary shall
treat an eligible professional as
satisfactorily submitting data on quality
measures under subparagraph (A) if, in lieu of
reporting measures under subsection (k)(2)(C),
the eligible professional is satisfactorily
participating, as determined by the Secretary,
in a qualified clinical data registry (as
described in subparagraph (E)) for the year.
* * * * * * *
(6) Definitions.--For purposes of this subsection:
(A) * * *
* * * * * * *
(C) Reporting period.--
(i) In general.--Subject to clauses
(ii) [and (iii)], (iii), and (iv), the
term ``reporting period'' means--
(I) * * *
* * * * * * *
(iv) Coordination with quality update
incentive program.--For 2019 and each
subsequent year the reporting period
shall be coordinated with the
performance period under subsection
(q)(2)(B).
* * * * * * *
(o) Incentives for Adoption and Meaningful Use of Certified
EHR Technology.--
(1) * * *
(2) Meaningful ehr user.--
(A) * * *
(B) Reporting on measures.--
(i) * * *
* * * * * * *
(iii) Coordination of reporting of
information.--In selecting such
measures, and in establishing the form
and manner for reporting measures under
subparagraph (A)(iii), the Secretary
shall seek to avoid redundant or
duplicative reporting otherwise
required, including reporting under
[subsection (k)(2)(C)] subparagraph (C)
or (D) of subsection (k)(2).
* * * * * * *
(5) Definitions.--For purposes of this subsection:
(A) * * *
(B) EHR reporting period.--The term ``EHR
reporting period'' means, with respect to a
payment year, any period (or periods) as
specified by the Secretary. Beginning for 2019,
the EHR reporting period shall be coordinated
with the performance period under subsection
(q)(2)(B).
* * * * * * *
(q) Quality Update Incentive Program.--
(1) Establishment.--
(A) In general.--The Secretary shall
establish an eligible professional quality
update incentive program (in this section
referred to as the ``quality update incentive
program'') under which--
(i) there is developed and applied,
in accordance with paragraph (2),
appropriate methodologies for assessing
the performance of eligible
professionals with respect to quality
measures and clinical practice
improvement activities included within
the final core measure sets published
under subsection (k)(9)(F) applicable
to the peer cohorts of such providers;
(ii) there is applied, consistent
with the system under subsection (k),
methods for collecting information
needed for such assessments (which
shall involve the minimum amount of
administrative burden required to
ensure reliable results); and
(iii) the applicable update
adjustments under paragraph (3) are
determined by such assessments.
(B) Definitions.--
(i) Eligible professional.--In this
subsection, the term ``eligible
professional'' has the meaning given
such term in subsection (k)(3), except
that such term shall not include a
professional who has a payment
arrangement described in section
1848A(a)(1) in effect.
(ii) Peer cohorts; clinical practice
improvement activities; eligible
professional organizations.--In this
subsection, the terms ``peer cohort'',
``clinical practice improvement
activity'', and ``eligible professional
organization'' have the meanings given
such terms in subsection (k)(3).
(C) Consultation with eligible professional
organizations and other relevant
stakeholders.--Eligible professional
organizations and other relevant stakeholders,
including State and national medical societies,
shall be consulted in carrying out this
subsection.
(D) Application at group practice level.--The
Secretary shall establish a process, consistent
with subsection (m)(3)(C), under which the
provisions of this subsection are applied to
eligible professionals in a group practice if
the group practice reports measures determined
appropriate by the Secretary under such
subsection.
(E) Coordination with existing programs.--The
application of measures and clinical practice
improvement activities and assessment of
performance under this subsection shall, as
appropriate, be coordinated with the
application of measures and assessment of
performance under other provisions of this
section.
(2) Assessing performance with respect to final core
measure sets for applicable peer cohorts.--
(A) Establishment of methods for
assessment.--
(i) In general.--Under the quality
update incentive program, the Secretary
shall--
(I) establish one or more
methods, applicable with
respect to a performance
period, to assess (using a
scoring scale of 0 to 100) the
performance of an eligible
professional with respect to,
subject to paragraph (1)(D),
quality measures and clinical
practice improvement activities
included within the final core
measure set published under
subsection (k)(9)(F) applicable
for the period to the peer
cohort in which the provider
self-identified under
subsection (k)(9)(B) for such
period; and
(II) subject to paragraph
(1)(D), compute a composite
score for such provider for
such performance period with
respect to the measures and
activities included within such
final core measure set.
(ii) Methods.--Such methods shall,
with respect to an eligible
professional, provide that the
performance of such professional shall,
subject to paragraph (1)(D), be
assessed for a performance period with
respect to the quality measures and
clinical practice improvement
activities within the final core
measure set for such period for the
peer cohort of such professional and on
which information is collected from
such professional.
(iii) Weighting of measures.--Such a
method may provide for the assignment
of different scoring weights or, as
appropriate, other factors--
(I) for quality measures and
clinical practice improvement
activities;
(II) based on the type or
category of measure or
activity; and
(III) based on the extent to
which a quality measure or
clinical practice improvement
activity meaningfully assesses
quality.
(iv) Risk adjustment.--Such a method
shall provide for appropriate risk
adjustments.
(v) Incorporation of other methods of
measuring physician quality.--In
establishing such methods, there shall
be, as appropriate, incorporated
comparable methods of measurement from
physician quality incentive programs
under this subsection.
(B) Performance period.--There shall be
established a period (in this subsection
referred to as a ``performance period''), with
respect to a year (beginning with 2019) for
which the quality adjustment is applied under
paragraph (3), to assess performance on quality
measures and clinical practice improvement
activities. Each such performance period shall
be a period of 12 consecutive months and shall
end as close as possible to the beginning of
the year for which such adjustment is applied.
(3) Quality adjustment taking into account quality
assessments.--
(A) Quality adjustment.--For purposes of
subsection (d)(16), if the composite score
computed under paragraph (2)(A) for an eligible
professional for a year (beginning with 2019)
is--
(i) a score of 67 or higher, the
quality adjustment under this paragraph
for the eligible professional and year
is 1 percentage point;
(ii) a score of at least 34, but
below 67, the quality adjustment under
this paragraph for the eligible
professional and year is zero; or
(iii) a score below 34, the quality
adjustment under this paragraph for the
eligible professional and year is -1
percentage point.
(B) No effect on subsequent years' quality
adjustments.--Each such quality adjustment
shall be made each year without regard to the
quality adjustment for a previous year under
this paragraph.
(4) Transition for new eligible professionals.--In
the case of a physician, practitioner, or other
supplier that during a performance period, with respect
to a year for which a quality adjustment is applied
under paragraph (3), first becomes an eligible
professional (and had not previously submitted claims
under this title as a person, as an entity, or as part
of a physician group or under a different billing
number or tax identifier), the quality adjustment under
this subsection applicable to such physician,
practitioner, or supplier--
(A) for such year, with respect to such first
performance period, shall be zero; and
(B) for a year, with respect to a subsequent
performance period, shall be the quality
adjustment that would otherwise be applied
under this subsection.
(5) Feedback.--
(A) Feedback.--
(i) Ongoing feedback.--Under the
process under subsection (m)(5)(H),
there shall be provided, as real time
as possible, but at least quarterly,
beginning not later than 6 months after
the first day of the first performance
period, to each eligible professional
feedback--
(I) on the performance of
such provider with respect to
quality measures and clinical
practice improvement activities
within the final core measure
set published under subsection
(k)(9)(F) for the applicable
performance period and the peer
cohort of such professional;
and
(II) to assess the progress
of such professional under the
quality update incentive
program with respect to a
performance period for a year.
(ii) Use of registries and other
mechanisms.--Feedback under this
subparagraph shall, to the extent an
eligible professional chooses to
participate in a data registry for
purposes of this subsection (including
registries under subsections (k) and
(m)), be provided and based on
performance received through the use of
such registry, and to the extent that
an eligible professional chooses not to
participate in such a registry for such
purposes, be provided through other
similar mechanisms that allow for the
provision of such feedback and receipt
of such performance information.
(B) Data mechanism.--Under the quality update
incentive program, there shall be developed an
electronic interactive eligible professional
mechanism through which such a professional may
receive performance data, including data with
respect to performance on the measures and
activities developed and selected under this
section. Such mechanism shall be developed in
consultation with private payers and health
insurance issuers (as defined in section
2791(b)(2) of the Public Health Service Act) as
appropriate.
(C) Transfer of funds.--The Secretary shall
provide for the transfer of $100,000,000 from
the Federal Supplementary Medical Insurance
Trust Fund established in section 1841 to the
Center for Medicare & Medicaid Services Program
Management Account to support such efforts to
develop the infrastructure as necessary to
carry out subsection (k)(9) and this subsection
and for purposes of section 1889(h). Such funds
shall be so transferred on the date of the
enactment of this subsection and shall remain
available until expended.
SEC. 1848A. ADVANCING ALTERNATIVE PAYMENT MODELS.
(a) Payment Model Choice Program.--Payment for covered
professional services (as defined in section 1848(k)) that are
furnished by an eligible professional (as defined in such
section) under an Alternative Payment Model specified on the
list under subsection (h) (in this section referred to as an
``eligible APM'') shall be made under this title in accordance
with the payment arrangement under such model. In applying the
previous sentence, such a professional with such a payment
arrangement in effect, shall be deemed for purposes of section
1848(a)(8) to be satisfactorily submitting data on quality
measures for such covered professional services.
(b) Process for Implementing Eligible APMs.--
(1) In general.--For purposes of subsection (a) and
in accordance with this section, the Secretary shall
establish a process under which--
(A) a contract is entered into, in accordance
with paragraph (2);
(B) proposals for potential Alternative
Payment Models are submitted in accordance with
subsection (c);
(C) Alternative Payment Models so proposed
are recommended, in accordance with subsection
(d), for testing and evaluation, including
through the demonstration program under
subsection (e), and approval under subsection
(f);
(D) applicable Alternative Payment Models are
tested and evaluated under such demonstration
program;
(E) models are implemented as eligible APMs
in accordance with subsection (f); and
(F) a comprehensive list of all eligible APMs
is made publicly available, in accordance with
subsection (h), for application under
subsection (a).
(2) Contract with apm contracting entity.--
(A) In general.--For purposes of paragraph
(1)(A), the Secretary shall identify and have
in effect a contract with an independent entity
that has appropriate expertise to carry out the
functions applicable to such entity under this
section. Such entity shall be referred to in
this section as the ``APM contracting entity''.
(B) Timing for first contract.--The Secretary
shall enter into the first contract under
subparagraph (A) to be in effect January 1,
2019.
(C) Competitive procedures.--Competitive
procedures (as defined in section 4(5) of the
Office of Federal Procurement Policy Act (41
U.S.C. 403(5)) shall be used to enter into a
contract under subparagraph (A).
(c) Submission of Proposed Alternative Payment Models.--
Beginning not later than 90 days after the date the Secretary
enters into a contract under subsection (b)(2) with the APM
contracting entity, physicians, eligible professional
organizations, health care provider organizations, and other
entities may submit to the APM contracting entity proposals for
Alternative Payment Models for application under this section.
Such a proposal of a model shall include suggestions for
measures to be used under subsection (e)(1)(B) for purposes of
evaluating such model. In reviewing submissions under this
subsection for purposes of making recommendations under
subsection (d)(1), the contracting entity shall focus on
submissions for such models that are intended to improve care
coordination and quality for patients through modifying the
manner in which physicians and other providers are paid under
this title.
(d) Recommendation by APM Contracting Entity of Proposed
Models.--
(1) Recommendation.--
(A) Recommendations to secretary.--
(i) In general.--Under the process
under subsection (b), the APM
contracting entity shall at least
quarterly recommend, in accordance with
clause (ii), to the Secretary--
(I) Alternative Payment
Models submitted under
subsection (c) to be tested and
evaluated through a
demonstration program under
subsection (e); and
(II) Alternative Payment
Models submitted under
subsection (c) to be
implemented under subsection
(f) without testing and
evaluation through such a
demonstration program.
Such a recommendation under subclause
(I) may be made with respect to a model
for which a waiver would be required
under paragraph (2). Any reference in
this subsection to an Alternative
Payment Model under this clause is a
reference to such model as may be
modified under clause (iii).
(ii) Requirements.--In recommending
an Alternative Payment Model under
clause (i), each of the following shall
apply:
(I) The APM contracting
entity may recommend an
Alternative Payment Model under
clause (i)(I) only if the
entity determines that the
model satisfies the criteria
described in subparagraph (B),
including the criteria
described in subparagraph
(B)(iv).
(II) The APM contracting
entity may recommend an
Alternative Payment Model under
clause (i)(II) only if the
entity determines that the
model satisfies the criteria
described in subparagraph (C),
including the criteria
described in subparagraph
(C)(iii).
(III) The APM contracting
entity shall include with the
recommended Alternative Payment
Model recommendations for rules
of coordination described in
clause (v).
(iii) Modifications by apm
contracting entity.--For purposes of
this subparagraph, to the extent
necessary to meet the applicable
requirements of clause (ii), the APM
contracting entity may modify an
Alternative Payment Model submitted
under subsection (c) to ensure that the
model would--
(I) reduce spending under
this title without reducing the
quality of care; or
(II) improve the quality of
care without increasing
spending under this title.
(iv) Forms of modifications.--Such a
modification under clause (iii) may
include one or more of the following:
(I) A change to the payment
arrangement under which
eligible professionals
participating in such model
would be paid for covered
professional services furnished
under such model.
(II) A change to the criteria
for eligible professionals to
be eligible to participate
under such model in order to
ensure that the requirement
described in subclause (I) or
(II) is satisfied.
(III) A change to the rules
of coordination described in
clause (v).
(IV) The application of a
withhold mechanism under the
payment arrangement under which
the distribution of withheld
amounts is based on the success
of the model in meeting
spending reduction
requirements.
(V) Such other change as the
contracting entity may specify.
(v) Rules of coordination for
application of payment arrangements
under models.--
(I) In general.--Rules of
coordination described in this
clause for an Alternative
Payment Model shall be designed
to determine, for purposes of
applying subsection (a) and
section 1848(d)(16), under what
circumstances an eligible
professional is treated as
having a payment arrangement
under a particular model.
(II) Nonduplication of
payment.--Such rules of
coordination shall ensure
coordination and nonduplication
of payment of services that
might be covered under more
than one payment arrangement or
under section 1848(d)(16).
(III) Application to non-apm
payment.--In applying such
rules of coordination for
purposes of section
1848(d)(16), an eligible
professional shall not be
treated as having a payment
arrangement in effect under
such a model for any covered
professional services not
treated as furnished under the
model.
(B) Criteria for recommending models for
demonstration.--For purposes of subparagraph
(A)(ii)(I), the criteria described in this
subparagraph, with respect to an Alternative
Payment Model, are each of the following:
(i) The model has been supported by
meaningful clinical and non-clinical
data, with respect to a sufficient
population sample, that indicates the
model would be successful at addressing
each of the abilities described in
clause (iv).
(ii)(I) In the case of a model that
has already been evaluated and
supported by data with respect to a
population of individuals enrolled
under this part, if the model were
evaluated under the demonstration under
subsection (e) such a population would
represent a sufficient number of
individuals enrolled under this part to
ensure a meaningful evaluation of the
likely effect of expanding the
demonstration.
(II) In the case of a model that has
not been so evaluated and supported by
data with respect to such a population,
the population that would be furnished
services under such model if the model
were evaluated under the demonstration
under subsection (e) would represent a
sufficient number of individuals
enrolled under this part to ensure a
meaningful evaluation of the likely
effect of expanding the demonstration.
(iii) Such model, including if tested
and evaluated under the demonstration
under subsection (e), would not deny or
limit the coverage or provision of
benefits under this title for
applicable individuals.
(iv) The proposal for such model
demonstrates--
(I) the significant
likelihood to successfully
manage the cost of furnishing
items and services under this
title so as to not result in
expenditures under this title
being greater than expenditures
under this title if the APM
were not implemented; and
(II) the ability to maintain
or improve the overall quality
of patient care provided to
individuals enrolled under this
part.
(v) The model provides for a payment
arrangement--
(I) that specifies the items
and services covered under the
arrangement and specifies rules
of coordination described in
subparagraph (A)(v) between the
items and services covered
under the arrangement and other
items and services not covered
under the arrangement;
(II) in the case such payment
arrangement does not provide
for payment under the fee
schedule under section 1848 for
such items and services
furnished by such eligible
professionals, that provides
for a payment adjustment based
on meaningful EHR use
comparable to such adjustment
that would otherwise apply
under section 1848; and
(III) that provides for a
payment adjustment based on
quality measures comparable to
such adjustment that would
otherwise apply under section
1848.
(C) Criteria for recommending models for
approval without evaluation under
demonstration.--For purposes of subparagraph
(A)(ii)(II), the criteria described in this
subparagraph, with respect to an Alternative
Payment Model, is that the model has already
been tested and evaluated for a sufficient
enough period and through such testing and
evaluation the model was shown--
(i) to have satisfied the criteria
described in each of clauses (i), (ii),
(iii), and (v) of subparagraph (B); and
(ii)(I) to have reduced spending
under this title without reducing the
quality of care; or
(II) to have improved the quality of
patient care without increasing such
spending.
(D) Transparency and disclosures.--
(i) Disclosures.--Not later than 90
days after receipt of a submission of a
model under subsection (c) by the APM
contracting entity, the APM contracting
entity shall submit to the Secretary
and the model submitter and make
publicly available a notification on
whether or not, and if so how, the
model meets criteria for recommending
such model under subparagraph (A),
including whether or not such model
requires a waiver under paragraph (2).
In the case that the APM contracting
entity determines not to recommend such
model under this paragraph, such
notification shall include an
explanation of the reasons for not
making such a recommendation. Any
information made publicly available
pursuant to the previous sentence shall
not include proprietary data.
(ii) Submission of recommended
models.--The APM contracting entity
shall at least quarterly submit to the
Secretary, the Medicare Payment
Advisory Commission, and the Chief
Actuary of the Centers for Medicare &
Medicaid Services the following:
(I) The models recommended
under subparagraph (A)(i)(I),
including any such models that
require a waiver under
paragraph (2), and the data and
analyses on such recommended
models that support the
criteria described in
subparagraph (B).
(II) The models recommended
under subparagraph (A)(i)(II)
and the data and analyses on
such recommended models that
support the criteria described
in subparagraph (C).
(iii) Explanation for no
recommendations.--For any year
beginning with 2015 that the APM
contracting entity does not recommend
any models under subparagraph (A)(i),
the entity shall instead satisfy this
clause by submitting to the Secretary
and making publicly available an
explanation for not having any such
recommendations.
(iv) Justifications for
recommendations.--In submitting data
and analyses under subclause (I) or
(II) of clause (ii) with respect to a
model, the APM contracting entity shall
include a specific explanation of how
the model would (and recommendations
for ensuring that the model will) meet
the criteria described in subparagraph
(B) or (C), respectively.
(v) Confirmation of spending
estimates by cms chief actuary.--For
each Alternative Payment Model
described in subclause (I) or (II) of
clause (ii), the Chief Actuary of the
Centers for Medicare & Medicaid
Services shall submit to the Secretary
a determination of whether or not the
Chief Actuary confirms that the model
satisfies the criterion described in
subparagraph (B)(iv)(I) or (C)(ii),
respectively.
(2) Models requiring waiver approval.--
(A) In general.--In the case that an
Alternative Payment Model recommended under
paragraph (1)(A)(i) would require a waiver from
any requirement under this title, in
determining approval of such model, the
Secretary may make such a waiver solely in
order for such model to be tested and evaluated
under the demonstration program.
(B) Approval.--Not later than 180 days after
the date of the receipt of such submission for
a model, the Secretary shall notify the APM
contracting entity and the entity submitting
such model under subsection (c) whether or not
such a waiver for such model is approved and
the reason for any denial of such a waiver.
(e) Demonstration.--
(1) In general.--Subject to paragraphs (5), (6), and
(7), the Secretary may conduct a demonstration program,
with respect to an Alternative Payment Model approved
under paragraph (2), under which participating APM
providers shall be paid under this title in accordance
with the payment arrangement under such model and such
model shall be evaluated by the independent evaluation
entity under paragraph (4). The duration of a
demonstration program under this subsection, with
respect to such a model, shall be 3 years.
(2) Approval by secretary of models for
demonstration.--
(A) In general.--Not later than 180 days
after the date of receipt of a submission under
subsection (d)(1)(D)(ii), with respect to an
Alternative Payment Model recommended under
subsection (d)(1)(A)(i)(I), the Secretary
shall--
(i) review the basis for such
recommendation in order to assess,
taking into account the determination
of the Chief Actuary under subsection
(d)(1)(D)(v) with respect to such
model, if the model is significantly
likely to--
(I) reduce spending under
this title without reducing the
quality of care; or
(II) improve the quality of
care without increasing
spending under this title;
(ii) assess whether the model is
significantly likely to result in
participation under such model of a
sufficient number of those eligible
professionals for whom the model was
designed consistent with clause (i) to
be able to evaluate the likely effect
of expanding the demonstration; and
(iii) approve such model for a
demonstration program under this
subsection, including as modified under
subparagraph (B), only if the Secretary
determines--
(I) the model is
significantly likely to satisfy
the criterion described in
subclause (I) or (II) of clause
(i);
(II) the model is
significantly likely to result
in the participation of a
sufficient number of eligible
professionals described in
clause (ii);
(III) the model applies rules
of coordination described in
subparagraph (C) applicable to
such model; and
(IV) the model satisfies the
criteria described in
subsection (d)(1)(B).
The Secretary shall periodically make available
a list of such models approved under clause
(iii).
(B) Modifications by secretary.--
(i) Before approval.--For purposes of
subparagraph (A), the Secretary may
modify an Alternative Payment Model
recommended under subsection
(d)(1)(A)(i)(I) to ensure that the
model meets the requirements described
in subparagraph (A)(iii). Such a
modification may include one or more of
the following:
(I) A change to the payment
arrangement under which
eligible professionals
participating in such model
would be paid for covered
professional services furnished
under such model.
(II) A change to the criteria
for eligible professionals to
be eligible to participate
under such model in order to
ensure that such requirements
are satisfied.
(III) A change to the rules
of coordination described in
subparagraph (C).
(IV) The application of a
withhold mechanism under the
payment arrangement under which
the distribution of withheld
amounts is based on the success
of the model in meeting
spending reduction
requirements.
(V) Such other change as the
Secretary may specify.
(ii) Termination or modification
during demonstration.--The Secretary
shall terminate or modify the design
and implementation of an Alternative
Payment Model approved under
subparagraph (A)(iii) for a
demonstration program, after testing
has begun, unless the Secretary
determines (and the Chief Actuary of
the Centers for Medicare & Medicaid
Services, with respect to program
spending under this title, certifies)
that the model is expected to continue
to satisfy the requirements described
in such paragraph relating to quality
of care and reduced spending. Such
termination may occur at any time after
such testing has begun and before
completion of the testing.
(C) Rules of coordination for application of
payment arrangements under models.--
(i) In general.--Rules of
coordination described in this
subparagraph for an Alternative Payment
Model shall be designed to determine,
for purposes of applying subsection (a)
and section 1848(d)(16), under what
circumstances an eligible professional
is treated as having a payment
arrangement under a particular model.
(ii) Nonduplication of payment.--Such
rules of coordination shall ensure
coordination and nonduplication of
payment of services that might be
covered under more than one payment
arrangement or under section
1848(d)(16).
(iii) Application to non-apm
payment.--In applying such rules for
purposes of section 1848(d)(16), an
eligible professional shall not be
treated as having a payment arrangement
in effect under such a model for any
covered professional services not
treated as furnished under the model.
(3) Participating apm providers.--
(A) In general.--To participate under a
demonstration program under this subsection,
with respect to an Alternative Payment Model,
an eligible professional shall enter into a
contract with the Administrator of the Centers
for Medicare & Medicaid Services under this
subsection. For purposes of this section, such
an eligible professional who so participates
under such an Alternative Payment Model in this
section is referred to as a ``participating APM
provider''.
(B) Requirements.--The Secretary shall
establish criteria for eligible professionals
to enter into contracts under this paragraph
for purposes of participation under a
demonstration program with respect to an
Alternative Payment Model. Such criteria shall
ensure participation under such model of a
sufficient number of eligible professionals for
whom the model was designed in order to satisfy
the criterion described in paragraph
(2)(A)(iii)(II).
(4) Reporting and evaluation.--
(A) Independent evaluation entity.--Under
this subsection, the Secretary shall enter into
a contract with an independent entity to
evaluate Alternative Payment Models under
demonstration programs under this subsection
based on appropriate measures specified under
subparagraph (B). In this section, such entity
shall be referred to as the ``independent
evaluation entity''. Such contract shall be
entered into in a timely manner so as to ensure
evaluation of an Alternative Payment Model
under a demonstration program under this
subsection may begin as soon as possible after
the model is approved under paragraph (2).
(B) Performance measures.--For purposes of
this subsection, the Secretary shall specify--
(i) measures to evaluate Alternative
Payment Models under demonstration
programs under this subsection, which
may include measures suggested under
subsection (c) and shall be sufficient
to allow for a comprehensive assessment
of such a model; and
(ii) quality measures on which
participating APM providers shall
report, which shall be similar to
measures applicable under section
1848(k).
(C) Reporting requirements.--A contract
entered into with a participating APM provider
under paragraph (3) shall require such provider
to report on appropriate measures specified
under subparagraph (B).
(D) Periodic review.--The independent
evaluation entity shall periodically review and
analyze and submit such analysis to the
Secretary and the participating APM providers
involved data reported under subparagraph (C)
and such other data as deemed necessary to
evaluate the model.
(E) Final evaluation.--Not later than 6
months after the date of completion of a
demonstration program, the independent
evaluation entity shall submit to the
Secretary, the Medicare Payment Advisory
Commission, and the Chief Actuary of the
Centers for Medicare & Medicaid Services (and
make publicly available) a report on each model
evaluated under such program. Such report shall
include--
(i) outcomes on the clinical and
claims data received through such
program with respect to such model;
(ii) recommendations on--
(I) whether or not such model
should be implemented as an
eligible APM under this
section; or
(II) whether or not the
evaluation of such model under
the demonstration program
should be extended or expanded;
(iii) the justification for each such
recommendation described in clause
(ii); and
(iv) in the case of a recommendation
to implement such model as an eligible
APM, recommendations on standardized
rules for purposes of such
implementation.
(5) Approval of extending evaluation under
demonstration.--Not later than 90 days after the date
of receipt of a submission under paragraph (4)(E), the
Secretary shall, including based on a recommendation
submitted under such paragraph, determine whether an
Alternative Payment Model may be extended or expanded
under the demonstration program.
(6) Termination.--The Secretary shall terminate a
demonstration program for a model under this subsection
unless the Secretary determines (and the Chief Actuary
of the Centers for Medicare & Medicaid Services, with
respect to spending under this title, certifies), after
testing has begun, that the model is expected to--
(A) improve the quality of care (as
determined by the Administrator of the Centers
for Medicare & Medicaid Services) without
increasing spending under this title;
(B) reduce spending under this title without
reducing the quality of care; or
(C) improve the quality of care and reduce
spending.
Such termination may occur at any time after such
testing has begun and before completion of the testing.
(7) Funding.--
(A) In general.--There are appropriated, from
amounts in the Federal Supplementary Medical
Insurance Trust Fund under section 1841 not
otherwise appropriated and as of the date of
the enactment of this section, $2,000,000,000
for the purposes described in subparagraph (B),
of which no more than 2.5 percent may be used
for the purpose described in clause (iii) of
such subparagraph. Amounts appropriated under
this subparagraph shall be available until
expended.
(B) Purposes.--Amounts appropriated under
subparagraph (A) shall be used for--
(i) payments for items and services
furnished by participating APM
providers under an Alternative Payment
Model under a demonstration program
under this subsection that--
(I) would not otherwise be
eligible for payment under this
title; or
(II) exceed the amount of
payment that would otherwise be
made for such items and
services under this title if
such items and services were
not furnished under such
demonstration program;
(ii) the evaluations provided for
under this section of models under such
a demonstration program;
(iii) payment to the APM contracting
entity for carrying out its duties
under this section; and
(iv) for otherwise carrying out this
subsection.
(C) Limitation.--The amounts appropriated
under subparagraph (A) are the only amounts
authorized or appropriated to carry out the
purposes described in subparagraph (B).
(f) Implementation of Recommended Models as Eligible APMs.--
(1) Assessment.--With respect to each Alternative
Payment Model recommended under subsection
(d)(1)(A)(i)(II) or (e)(4)(E)(ii)(I), the Secretary
shall review the basis for such recommendation and
assess and determine, in consultation with the Chief
Actuary of the Centers for Medicare & Medicaid
Services, whether the model is significantly likely to
continue to result in meeting the criterion described
in subsection (e)(2)(A)(iii)(I), with or without a
modification described in paragraph (5).
(2) Implementation through rulemaking.--
(A) Publication of nprm.--If the Secretary
determines that such a model is significantly
likely to meet such criterion, the Secretary
shall publish as part of the applicable
physician fee schedule rulemaking process
(specified in paragraph (3)) a notice of
proposed rulemaking to implement such model,
including as modified under paragraph (5).
(B) Comments by medpac.--Not later than 90
days after the date of issuance of such notice
with respect to a model, the Medicare Payment
Advisory Commission shall submit comments on
the proposed rule for such model to Congress
and to the Secretary. Such comments shall
include an evaluation of the reports from the
contracting entity and independent evaluation
entity on such model regarding the model's
impact on expenditures and quality of care
under this title.
(C) Final rule and conditions.--The Secretary
shall publish as part of the applicable
physician fee schedule rulemaking process
(specified in paragraph (3)) a final notice
implementing such proposed rule, including as
modified under paragraph (5), as an eligible
APM only if--
(i) the Secretary determines that
such model is expected to--
(I) reduce spending under
this title without reducing the
quality of care; or
(II) improve the quality of
patient care without increasing
spending;
(ii) the Chief Actuary of the Centers
for Medicare & Medicaid Services
certifies that such model would reduce
(or would not result in any increase
in) spending under this title;
(iii) the Secretary determines that
such model would not deny or limit the
coverage or provision of benefits under
this title for applicable individuals;
(iv) the Secretary determines that
the model is significantly likely to
result in the participation of a
sufficient number of appropriate
eligible professionals for whom the
model was designed in order to satisfy
the criterion described in subsection
(d)(2)(A)(iii)(II);
(v) the Secretary determines that the
model applies rules of coordination
described in paragraph (6); and
(vi) the Secretary determines that
model meets such other criteria as the
Secretary may determine.
(3) Applicable physician fee schedule rulemaking
process.--For purposes of paragraph (2), in the case of
an Alternative Payment Model recommended under
subsection (d)(1)(A)(ii) or (e)(4)(E)(ii)(I)--
(A) on or before April 1 of a year, the
applicable physician fee schedule rulemaking
process is the process for publication by
November 1 of that year of the fee schedule
amounts under this section for the succeeding
year; or
(B) after April 1 of a year, the applicable
physician fee schedule rulemaking process is
the process for publication by November 1 of
the following year of the fee schedule amounts
under this section for the second succeeding
year.
(4) Justification for disapprovals.--In the case that
an Alternative Payment Model recommended under
subsection (d)(1)(A)(ii) or (e)(4)(E)(ii)(I) is not
implemented as an eligible APM under this subsection,
the Secretary shall make publicly available the
rational, in detail, for such decision.
(5) Modifications by secretary.--For purposes of this
subsection, the Secretary may modify an Alternative
Payment Model recommended under subsection
(d)(1)(A)(i)(II) or (e)(4)(E)(ii)(I) to ensure that the
model meets the requirements under paragraph (1)(B).
Such a modification may include one or more of the
following:
(A) A change to the payment arrangement under
which eligible professionals participating in
such model would be paid for covered
professional services furnished under such
model.
(B) A change to the criteria for eligible
professionals to be eligible to participate
under such model in order to ensure that such
requirements are satisfied.
(C) A change to the rules of coordination
described in paragraph (6).
(D) The application of a withhold mechanism
under the payment arrangement under which the
distribution of withheld amounts is based on
the success of the model in meeting spending
reduction requirements.
(E) Such other change as the Secretary may
specify.
(6) Rules of coordination for application of payment
arrangements under models.--
(A) In general.--Rules of coordination
described in this paragraph for an Alternative
Payment Model shall be designed to determine,
for purposes of applying subsection (a) and
section 1848(d)(16), under what circumstances
an eligible professional is treated as having a
payment arrangement under a particular model.
(B) Nonduplication of payment.--Such rules of
coordination shall ensure coordination and
nonduplication of payment of services that
might be covered under more than one payment
arrangement or under section 1848(d)(16).
(C) Application to non-apm payment.--In
applying such rules for purposes of section
1848(d)(16), an eligible professional shall not
be treated as having a payment arrangement in
effect under such a model for any covered
professional services not treated as furnished
under the model.
(g) Periodic Review and Termination.--
(1) Periodic review.--In the case of an Alternative
Payment Model that has been implemented, the Secretary
and the Chief Actuary of the Centers for Medicare &
Medicaid Services shall review such model every 3 years
to determine (and certify, in the case of the Chief
Actuary and spending under this title), for the
previous 3 years, whether the model has--
(A) reduced the quality of care, or
(B) increased spending under this title,
compared to the quality of care or spending that would
have resulted if the model had not been implemented.
(2) Termination.--
(A) Quality of care reduction termination.--
If based upon such review the Secretary
determines under paragraph (1)(A) that the
model has reduced the quality of care, the
Secretary may terminate such model.
(B) Spending increase termination.--Unless
such Chief Actuary certifies under paragraph
(1)(B) that the expenditures under this title
under the model do not exceed the expenditures
that would otherwise have been made if the
model had not been implemented for the period
involved, the Secretary shall terminate such
model.
(h) Dissemination of Eligible APMs.--Under this section there
shall be established a process for specifying, and making
publicly available a list of, all eligible APMs, which shall
include at least those implemented under subsection (f) and
demonstrations carried out with respect to payments under
section 1848 through authority in existence as of the day
before the date of the enactment of this section. Under such
process such list shall be periodically updated and, beginning
with January 1, 2015, and annually thereafter, such list shall
be published in the Federal Register.
* * * * * * *
Part E--Miscellaneous Provisions
* * * * * * *
PROVIDER EDUCATION AND TECHNICAL ASSISTANCE
Sec. 1889. (a) * * *
* * * * * * *
(h) Quality Update Incentive Program.--Under this section,
information shall be disseminated to educate and assist
eligible professionals (as defined in section 1848(k)(3)) about
the quality update incentive program under section 1848(q) and
quality measures under section 1848(k)(9) through multiple
approaches, including a national dissemination strategy and
outreach by medicare contractors.
* * * * * * *