    [United States Statutes at Large, Volume 128, 113th Congress, 2nd Session]
    [From the U.S. Government Publishing Office, www.gpo.gov]

    Public Law 113-93
    113th Congress

    An Act

    To amend the Social Security Act to extend Medicare payments to
    physicians and other provisions of the Medicare and Medicaid programs,
    and for other purposes. <>

    Be it enacted by the Senate and House of Representatives of the
    United States of America in Congress assembled, <>
    SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short <> Title.--This Act may be cited
    as the ``Protecting Access to Medicare Act of 2014''.

    (b) Table of Contents.--The table of contents of this Act is as
    follows:

    Sec. 1. Short title; table of contents.

    TITLE I--MEDICARE EXTENDERS

    Sec. 101. Physician payment update.
    Sec. 102. Extension of work GPCI floor.
    Sec. 103. Extension of therapy cap exceptions process.
    Sec. 104. Extension of ambulance add-ons.
    Sec. 105. Extension of increased inpatient hospital payment adjustment
    for certain low-volume hospitals.
    Sec. 106. Extension of the Medicare-dependent hospital (MDH) program.
    Sec. 107. Extension for specialized Medicare Advantage plans for special
    needs individuals.
    Sec. 108. Extension of Medicare reasonable cost contracts.
    Sec. 109. Extension of funding for quality measure endorsement, input,
    and selection.
    Sec. 110. Extension of funding outreach and assistance for low-income
    programs.
    Sec. 111. Extension of two-midnight rule.
    Sec. 112. Technical changes to Medicare LTCH amendments.

    TITLE II--OTHER HEALTH PROVISIONS

    Sec. 201. Extension of the qualifying individual (QI) program.
    Sec. 202. Temporary extension of transitional medical assistance (TMA).
    Sec. 203. Extension of Medicaid and CHIP express lane option.
    Sec. 204. Extension of special diabetes program for type I diabetes and
    for Indians.
    Sec. 205. Extension of abstinence education.
    Sec. 206. Extension of personal responsibility education program (PREP).
    Sec. 207. Extension of funding for family-to-family health information
    centers.
    Sec. 208. Extension of health workforce demonstration project for low-
    income individuals.
    Sec. 209. Extension of maternal, infant, and early childhood home
    visiting programs.
    Sec. 210. Pediatric quality measures.
    Sec. 211. Delay of effective date for Medicaid amendments relating to
    beneficiary liability settlements.
    Sec. 212. Delay in transition from ICD-9 to ICD-10 code sets.
    Sec. 213. Elimination of limitation on deductibles for employer-
    sponsored health plans.
    Sec. 214. GAO report on the Children's Hospital Graduate Medical
    Education Program.
    Sec. 215. Skilled nursing facility value-based purchasing.
    Sec. 216. Improving Medicare policies for clinical diagnostic laboratory
    tests.

    [[Page 1041]]

    Sec. 217. Revisions under the Medicare ESRD prospective payment system.
    Sec. 218. Quality incentives for computed tomography diagnostic imaging
    and promoting evidence-based care.
    Sec. 219. Using funding from Transitional Fund for Sustainable Growth
    Rate (SGR) Reform.
    Sec. 220. Ensuring accurate valuation of services under the physician
    fee schedule.
    Sec. 221. Medicaid DSH.
    Sec. 222. Realignment of the Medicare sequester for fiscal year 2024.
    Sec. 223. Demonstration programs to improve community mental health
    services.
    Sec. 224. Assisted outpatient treatment grant program for individuals
    with serious mental illness.
    Sec. 225. Exclusion from PAYGO scorecards.

    TITLE I--MEDICARE EXTENDERS

    SEC. 101. PHYSICIAN PAYMENT UPDATE.

    Section 1848(d) of the Social Security Act (42 U.S.C. 1395w-4(d)) is
    amended--
    (1) in paragraph (15)--
    (A) in the heading, by striking ``January through
    march of'';
    (B) in subparagraph (A), by striking ``for the
    period beginning on January 1, 2014, and ending on March
    31, 2014''; and
    (C) in subparagraph (B)--
    (i) in the heading, by striking ``remaining
    portion of 2014 and''; and
    (ii) by striking ``the period beginning on
    April 1, 2014, and ending on December 31, 2014,
    and for''; and
    (2) by adding at the end the following new paragraph:
    ``(16) <>  Update for january through
    march of 2015.--
    ``(A) In general.--Subject to paragraphs (7)(B),
    (8)(B), (9)(B), (10)(B), (11)(B), (12)(B), (13)(B),
    (14)(B), and (15)(B), in lieu of the update to the
    single conversion factor established in paragraph (1)(C)
    that would otherwise apply for 2015 for the period
    beginning on January 1, 2015, and ending on March 31,
    2015, the update to the single conversion factor shall
    be 0.0 percent.
    ``(B) No effect on computation of conversion factor
    for remaining portion of 2015 and subsequent years.--The
    conversion factor under this subsection shall be
    computed under paragraph (1)(A) for the period beginning
    on April 1, 2015, and ending on December 31, 2015, and
    for 2016 and subsequent years as if subparagraph (A) had
    never applied.''.
    SEC. 102. EXTENSION OF WORK GPCI FLOOR.

    Section 1848(e)(1)(E) of the Social Security Act (42 U.S.C. 1395w-
    4(e)(1)(E)) is amended by striking ``April 1, 2014'' and inserting
    ``April 1, 2015''.
    SEC. 103. EXTENSION OF THERAPY CAP EXCEPTIONS PROCESS.

    Section 1833(g) of the Social Security Act (42 U.S.C. 1395l(g)) is
    amended--
    (1) in paragraph (5)(A), in the first sentence, by striking
    ``March 31, 2014'' and inserting ``March 31, 2015''; and
    (2) in paragraph (6)(A)--
    (A) by striking ``March 31, 2014'' and inserting
    ``March 31, 2015''; and

    [[Page 1042]]

    (B) by striking ``2012, 2013, or the first three
    months of 2014'' and inserting ``2012, 2013, 2014, or
    the first three months of 2015''.
    SEC. 104. EXTENSION OF AMBULANCE ADD-ONS.

    (a) Ground Ambulance.--Section 1834(l)(13)(A) of the Social Security
    Act (42 U.S.C. 1395m(l)(13)(A)) is amended by striking ``April 1, 2014''
    and inserting ``April 1, 2015'' each place it appears.
    (b) Super Rural Ground Ambulance.--Section 1834(l)(12)(A) of the
    Social Security Act (42 U.S.C. 1395m(l)(12)(A)) is amended, in the first
    sentence, by striking ``April 1, 2014'' and inserting ``April 1, 2015''.
    SEC. 105. EXTENSION OF INCREASED INPATIENT HOSPITAL PAYMENT
    ADJUSTMENT FOR CERTAIN LOW-VOLUME
    HOSPITALS.

    Section 1886(d)(12) of the Social Security Act (42 U.S.C.
    1395ww(d)(12)) is amended--
    (1) in subparagraph (B), in the matter preceding clause (i),
    by striking ``in the portion of fiscal year 2014 beginning on
    April 1, 2014, fiscal year 2015, and subsequent fiscal years''
    and inserting ``in fiscal year 2015 (beginning on April 1,
    2015), fiscal year 2016, and subsequent fiscal years'';
    (2) in subparagraph (C)(i), by striking ``fiscal years 2011,
    2012, and 2013, and the portion of fiscal year 2014 before'' and
    inserting ``fiscal years 2011 through 2014 and fiscal year 2015
    (before April 1, 2015),'' each place it appears; and
    (3) in subparagraph (D), by striking ``fiscal years 2011,
    2012, and 2013, and the portion of fiscal year 2014 before April
    1, 2014,'' and inserting ``fiscal years 2011 through 2014 and
    fiscal year 2015 (before April 1, 2015),''.
    SEC. 106. EXTENSION OF THE MEDICARE-DEPENDENT HOSPITAL (MDH)
    PROGRAM.

    (a) In General.--Section 1886(d)(5)(G) of the Social Security Act
    (42 U.S.C. 1395ww(d)(5)(G)) is amended--
    (1) in clause (i), by striking ``April 1, 2014'' and
    inserting ``April 1, 2015''; and
    (2) in clause (ii)(II), by striking ``April 1, 2014'' and
    inserting ``April 1, 2015''.

    (b) Conforming Amendments.--
    (1) Extension of target amount.--Section 1886(b)(3)(D) of
    the Social Security Act (42 U.S.C. 1395ww(b)(3)(D)) is amended--
    (A) in the matter preceding clause (i), by striking
    ``April 1, 2014'' and inserting ``April 1, 2015''; and
    (B) in clause (iv), by striking ``through fiscal
    year 2013 and the portion of fiscal year 2014 before
    April 1, 2014'' and inserting ``through fiscal year 2014
    and the portion of fiscal year 2015 before April 1,
    2015''.
    (2) Permitting hospitals to decline reclassification.--
    Section 13501(e)(2) of the Omnibus Budget Reconciliation Act of
    1993 (42 U.S.C. 1395ww note) is amended by striking ``through
    the first 2 quarters of fiscal year 2014'' and inserting
    ``through the first 2 quarters of fiscal year 2015''.

    [[Page 1043]]

    SEC. 107. EXTENSION FOR SPECIALIZED MEDICARE ADVANTAGE PLANS FOR
    SPECIAL NEEDS INDIVIDUALS.

    Section 1859(f)(1) of the Social Security Act (42 U.S.C. 1395w-
    28(f)(1)) is amended by striking ``2016'' and inserting ``2017''.
    SEC. 108. EXTENSION OF MEDICARE REASONABLE COST CONTRACTS.

    Section 1876(h)(5)(C)(ii) of the Social Security Act (42 U.S.C.
    1395mm(h)(5)(C)(ii)) is amended, in the matter preceding subclause (I),
    by striking ``January 1, 2015'' and inserting ``January 1, 2016''.
    SEC. 109. EXTENSION OF FUNDING FOR QUALITY MEASURE ENDORSEMENT,
    INPUT, AND SELECTION.

    Section 1890(d) of the Social Security Act (42 U.S.C. 1395aaa(d)) is
    amended--
    (1) by inserting ``(1)'' before ``For purposes''; and
    (2) by adding at the end the following new paragraph:

    ``(2) For purposes of carrying out this section and section 1890A
    (other than subsections (e) and (f)), the Secretary shall provide for
    the transfer, from the Federal Hospital Insurance Trust Fund under
    section 1817 and the Federal Supplementary Medical Insurance Trust Fund
    under section 1841, in such proportion as the Secretary determines
    appropriate, to the Centers for Medicare & Medicaid Services Program
    Management Account of $5,000,000 for fiscal year 2014 and $15,000,000
    for the first 6 months of fiscal year 2015. Amounts transferred under
    the preceding sentence shall remain available until expended.''.
    SEC. 110. EXTENSION OF FUNDING OUTREACH AND ASSISTANCE FOR LOW-
    INCOME PROGRAMS.

    (a) Additional Funding for State Health Insurance Programs.--
    Subsection (a)(1)(B) of section 119 of the Medicare Improvements for
    Patients and Providers Act of 2008 (42 U.S.C. 1395b-3 note), as amended
    by section 3306 of the Patient Protection and Affordable Care Act Public
    Law 111-148), section 610 of the American Taxpayer Relief Act of 2012
    (Public Law 112-240), and section 1110 of the Pathway for SGR Reform Act
    of 2013 (Public Law 113-67), is amended--
    (1) in clause (iii), by striking ``and'' at the end;
    (2) by striking clause (iv); and
    (3) by adding at the end the following new clauses:
    ``(iv) for fiscal year 2014, of $7,500,000;
    and
    ``(v) for the portion of fiscal year 2015
    before April 1, 2015, of $3,750,000.''.

    (b) Additional Funding for Area Agencies on Aging.--Subsection
    (b)(1)(B) of such section 119, as so amended, is amended--
    (1) in clause (iii), by striking ``and'' at the end;
    (2) by striking clause (iv); and
    (3) by inserting after clause (iii) the following new
    clauses:
    ``(iv) for fiscal year 2014, of $7,500,000;
    and
    ``(v) for the portion of fiscal year 2015
    before April 1, 2015, of $3,750,000.''.

    (c) Additional Funding for Aging and Disability Resource Centers.--
    Subsection (c)(1)(B) of such section 119, as so amended, is amended--
    (1) in clause (iii), by striking ``and'' at the end;
    (2) by striking clause (iv); and
    (3) by inserting after clause (iii) the following new
    clauses:

    [[Page 1044]]

    ``(iv) for fiscal year 2014, of $5,000,000;
    and
    ``(v) for the portion of fiscal year 2015
    before April 1, 2015, of $2,500,000.''.

    (d) Additional Funding for Contract With the National Center for
    Benefits and Outreach Enrollment.--Subsection (d)(2) of such section
    119, as so amended, is amended--
    (1) in clause (iii), by striking ``and'' at the end;
    (2) by striking clause (iv); and
    (3) by inserting after clause (iii) the following new
    clauses:
    ``(iv) for fiscal year 2014, of $5,000,000;
    and
    ``(v) for the portion of fiscal year 2015
    before April 1, 2015, of $2,500,000.''.
    SEC. 111. <>  EXTENSION OF TWO-
    MIDNIGHT RULE.

    (a) Continuation of Certain Medical Review Activities.--The
    Secretary of Health and Human Services may continue medical review
    activities described in the notice entitled ``Selecting Hospital Claims
    for Patient Status Reviews: Admissions On or After October 1, 2013'',
    posted on the Internet website of the Centers for Medicare & Medicaid
    Services, through the first 6 months of fiscal year 2015 for such
    additional hospital claims as the Secretary determines appropriate.
    (b) <>  Limitation.--The Secretary of Health and
    Human Services shall not conduct patient status reviews (as described in
    such notice) on a post-payment review basis through recovery audit
    contractors under section 1893(h) of the Social Security Act (42 U.S.C.
    1395ddd(h)) for inpatient claims with dates of admission October 1,
    2013, through March 31, 2015, unless there is evidence of systematic
    gaming, fraud, abuse, or delays in the provision of care by a provider
    of services (as defined in section 1861(u) of such Act (42 U.S.C.
    1395x(u))).
    SEC. 112. TECHNICAL CHANGES TO MEDICARE LTCH AMENDMENTS.

    (a) In General.--Subclauses (I) and (II) of section
    1886(m)(6)(C)(iv) of the Social Security Act (42 U.S.C.
    1395ww(m)(6)(C)(iv)) are each amended by striking ``discharges'' and
    inserting ``Medicare fee-for-service discharges''.
    (b) MMSEA Correction.--Section 114(d) of the Medicare, Medicaid, and
    SCHIP Extension Act of 2007 (42 U.S.C. 1395ww note), as amended by
    sections 3106(b) and 10312(b) of Public Law 111-148 and by section
    1206(b)(2) of the Pathway for SGR Reform Act of 2013 (division B of
    Public Law 113-67), is amended--
    (1) in paragraph (1), in the matter preceding subparagraph
    (A), by striking ``January 1, 2015,'' and inserting ``on the
    date of the enactment of paragraph (7) of this subsection'';
    (2) in paragraph (6), by striking ``January 1, 2015,'' and
    inserting ``on the date of the enactment of paragraph (7) of
    this subsection''; and
    (3) by adding at the end the following new paragraph:
    ``(7) Additional exception for certain long-term care
    hospitals.--The moratorium under paragraph (1)(A) shall not
    apply to a long-term care hospital that--
    ``(A) began its qualifying period for payment as a
    long-term care hospital under section 412.23(e) of title
    42, Code of Federal Regulations, on or before the date
    of enactment of this paragraph;

    [[Page 1045]]

    ``(B) has a binding written agreement as of the date
    of the enactment of this paragraph with an outside,
    unrelated party for the actual construction, renovation,
    lease, or demolition for a long-term care hospital, and
    has expended, before such date of enactment, at least 10
    percent of the estimated cost of the project (or, if
    less, $2,500,000); or
    ``(C) has obtained an approved certificate of need
    in a State where one is required on or before such date
    of enactment.''.

    (c) Additional Amendments.--Section 1206(a) of the Pathway for SGR
    Reform Act of 2013 (division B of Public Law 113-67) is amended--
    (1) in paragraph (2)(A), by striking ``Assessment'' and
    inserting ``Advisory''; and
    (2) <>  in paragraph (3)(B), by
    striking ``shall not apply to a hospital that is classified as
    of December 10, 2013, as a subsection (d) hospital (as defined
    in section 1886(d)(1)(B) of the Social Security Act, 42 U.S.C.
    1395ww(d)(1)(B))'' and inserting ``shall only apply to a
    hospital that is classified as of December 10, 2013, as a long-
    term care hospital (as defined in section 1861(ccc) of the
    Social Security Act, 42 U.S.C. 1395x(ccc))''.

    (d) <>  Effective Date.--The amendments
    made by this section are effective as of the date of the enactment of
    this Act.

    TITLE II--OTHER HEALTH PROVISIONS

    SEC. 201. EXTENSION OF THE QUALIFYING INDIVIDUAL (QI) PROGRAM.

    (a) Extension.--Section 1902(a)(10)(E)(iv) of the Social Security
    Act (42 U.S.C. 1396a(a)(10)(E)(iv)) is amended by striking ``March
    2014'' and inserting ``March 2015''.
    (b) Extending Total Amount Available for Allocation.--Section
    1933(g) of the Social Security Act (42 U.S.C. 1396u-3(g)) is amended--
    (1) in paragraph (2)--
    (A) in subparagraph (T), by striking ``and'' at the
    end;
    (B) in subparagraph (U)--
    (i) by striking ``March 31, 2014'' and
    inserting ``September 30, 2014''; and
    (ii) by striking ``$200,000,000.'' and
    inserting ``$485,000,000;''; and
    (C) <>  by adding at the end
    the following new subparagraphs:
    ``(V) for the period that begins on October 1, 2014,
    and ends on December 31, 2014, the total allocation
    amount is $300,000,000; and
    ``(W) for the period that begins on January 1, 2015,
    and ends on March 31, 2015, the total allocation amount
    is $250,000,000.''; and
    (2) in paragraph (3), in the matter preceding subparagraph
    (A), by striking ``or (T)'' and inserting ``(T), or (V)''.

    [[Page 1046]]

    SEC. 202. TEMPORARY EXTENSION OF TRANSITIONAL MEDICAL ASSISTANCE
    (TMA).

    Sections 1902(e)(1)(B) and 1925(f) of the Social Security Act (42
    U.S.C. 1396a(e)(1)(B), 1396r-6(f)) are each amended by striking ``March
    31, 2014'' and inserting ``March 31, 2015''.
    SEC. 203. EXTENSION OF MEDICAID AND CHIP EXPRESS LANE OPTION.

    Section 1902(e)(13)(I) of the Social Security Act (42 U.S.C.
    1396a(e)(13)(I)) is amended by striking ``September 30, 2014'' and
    inserting ``September 30, 2015''.
    SEC. 204. EXTENSION OF SPECIAL DIABETES PROGRAM FOR TYPE I
    DIABETES AND FOR INDIANS.

    (a) Special Diabetes Programs for Type I Diabetes.--Section
    330B(b)(2)(C) of the Public Health Service Act (42 U.S.C. 254c-
    2(b)(2)(C)) is amended by striking ``2014'' and inserting ``2015''.
    (b) Special Diabetes Programs for Indians.--Section 330C(c)(2)(C) of
    the Public Health Service Act (42 U.S.C. 254c-3(c)(2)(C)) is amended by
    striking ``2014'' and inserting ``2015''.
    SEC. 205. EXTENSION OF ABSTINENCE EDUCATION.

    Subsections (a) and (d) of section 510 of the Social Security Act
    (42 U.S.C. 710) are each amended by striking ``2014'' and inserting
    ``2015''.
    SEC. 206. EXTENSION OF PERSONAL RESPONSIBILITY EDUCATION PROGRAM
    (PREP).

    Section 513 of the Social Security Act (42 U.S.C. 713) is amended--
    (1) in paragraphs (1)(A) and (4)(A) of subsection (a), by
    striking ``2014'' and inserting ``2015'' each place it appears;
    (2) in subsection (a)(4)(B)(i), by striking ``and 2014'' and
    inserting ``2014, and 2015''; and
    (3) in subsection (f), by striking ``2014'' and inserting
    ``2015''.
    SEC. 207. EXTENSION OF FUNDING FOR FAMILY-TO-FAMILY HEALTH
    INFORMATION CENTERS.

    Section 501(c)(1)(A) of the Social Security Act (42 U.S.C.
    701(c)(1)(A)) is amended--
    (1) in clause (iii), by striking at the end ``and'';
    (2) in clause (iv), by striking the period at the end and
    inserting a semicolon and by moving the margin to align with the
    margin for clause (iii); and
    (3) by adding at the end the following new clauses:
    ``(v) $2,500,000 for the portion of fiscal year 2014 on or
    after April 1, 2014; and
    ``(vi) $2,500,000 for the portion of fiscal year 2015 before
    April 1, 2015.''.
    SEC. 208. EXTENSION OF HEALTH WORKFORCE DEMONSTRATION PROJECT FOR
    LOW-INCOME INDIVIDUALS.

    Section 2008(c)(1) of the Social Security Act (42 U.S.C.
    1397g(c)(1)) is amended by striking ``2014'' and inserting ``2015''.
    SEC. 209. EXTENSION OF MATERNAL, INFANT, AND EARLY CHILDHOOD HOME
    VISITING PROGRAMS.

    Section 511(j) of the Social Security Act (42 U.S.C. 711(j)) is
    amended--
    (1) in paragraph (1)--

    [[Page 1047]]

    (A) by striking ``and'' at the end of subparagraph
    (D);
    (B) by striking the period at the end of
    subparagraph (E) and inserting ``; and''; and
    (C) by adding at the end the following new
    subparagraph:
    ``(F) <>  for the period
    beginning on October 1, 2014, and ending on March 31,
    2015, an amount equal to the amount provided in
    subparagraph (E).''; and
    (2) in paragraphs (2) and (3), by inserting ``(or portion of
    a fiscal year)'' after ``for a fiscal year'' each place it
    appears.
    SEC. 210. PEDIATRIC QUALITY MEASURES.

    (a) Continuation of Funding for Pediatric Quality Measures for
    Improving the Quality of Children's Health Care.--Section 1139B(e) of
    the Social Security Act (42 U.S.C. 1320b-9b(e)) is amended by adding at
    the end the following: ``Of the funds appropriated under this
    subsection, not less than $15,000,000 shall be used to carry out section
    1139A(b).''.
    (b) Elimination of Restriction on Medicaid Quality Measurement
    Program.--Section 1139B(b)(5)(A) of the Social Security Act (42 U.S.C.
    1320b-9b(b)(5)(A)) is amended by striking ``The aggregate amount awarded
    by the Secretary for grants and contracts for the development, testing,
    and validation of emerging and innovative evidence-based measures under
    such program shall equal the aggregate amount awarded by the Secretary
    for grants under section 1139A(b)(4)(A)''.
    SEC. 211. DELAY OF EFFECTIVE DATE FOR MEDICAID AMENDMENTS RELATING
    TO BENEFICIARY LIABILITY SETTLEMENTS.

    Effective as if included in the enactment of the Bipartisan Budget
    Act of 2013 (Public Law 113-67), section 202(c) of such Act <>  is amended by striking ``October 1, 2014'' and
    inserting ``October 1, 2016''.
    SEC. 212. DELAY IN TRANSITION FROM ICD-9 TO ICD-10 CODE SETS.

    The Secretary of Health and Human Services may not, prior to October
    1, 2015, adopt ICD-10 code sets as the standard for code sets under
    section 1173(c) of the Social Security Act (42 U.S.C. 1320d-2(c)) and
    section 162.1002 of title 45, Code of Federal Regulations.
    SEC. 213. ELIMINATION OF LIMITATION ON DEDUCTIBLES FOR EMPLOYER-
    SPONSORED HEALTH PLANS.

    (a) In General.--Section 1302(c) of the Patient Protection and
    Affordable Care Act (Public Law 111-148; 42 U.S.C. 18022(c)) is
    amended--
    (1) by striking paragraph (2); and
    (2) in paragraph (4)(A), by striking ``paragraphs (1)(B)(i)
    and (2)(B)(i)'' and inserting ``paragraph (1)(B)(i)''.

    (b) Conforming Amendment.--Section 2707(b) of the Public Health
    Service Act (42 U.S.C. 300gg-6(b)) is amended by striking ``paragraphs
    (1) and (2)'' and inserting ``paragraph (1)''.
    (c) <>  Effective Date.--The amendments
    made by this Act shall be effective as if included in the enactment of
    the Patient Protection and Affordable Care Act (Public Law 111-148).

    [[Page 1048]]

    SEC. 214. GAO REPORT ON THE CHILDREN'S HOSPITAL GRADUATE MEDICAL
    EDUCATION PROGRAM.

    (a) <>  In General.--In the case that the
    Children's Hospital GME Support Reauthorization Act of 2013 is enacted
    into law, the Comptroller General of the United States shall, not later
    than November 30, 2017, conduct an independent evaluation, and submit to
    the appropriate committees of Congress a report, concerning the
    implementation of section 340E(h) of the Public Health Service Act, as
    added by section 3 of the Children's Hospital GME Support
    Reauthorization Act of 2013.

    (b) Content.--The report described in subsection (a) shall review
    and assess each of the following, with respect to hospitals receiving
    payments under such section 340E(h) during the period of fiscal years
    2015 through 2017:
    (1) The number and type of such hospitals that applied for
    such payments.
    (2) The number and type of such hospitals receiving such
    payments.
    (3) The amount of such payments awarded to such hospitals.
    (4) How such hospitals used such payments.
    (5) The impact of such payments on--
    (A) the number of pediatric providers; and
    (B) health care needs of children.
    SEC. 215. SKILLED NURSING FACILITY VALUE-BASED PURCHASING.

    (a) In General.--Section 1888 of the Social Security Act (42 U.S.C.
    1395yy) is amended by adding at the end the following new subsection:
    ``(g) Skilled Nursing Facility Readmission Measure.--
    ``(1) <>  Readmission measure.--Not later
    than October 1, 2015, the Secretary shall specify a skilled
    nursing facility all-cause all-condition hospital readmission
    measure (or any successor to such a measure).
    ``(2) <>  Resource use measure.--Not later
    than October 1, 2016, the Secretary shall specify a measure to
    reflect an all-condition risk-adjusted potentially preventable
    hospital readmission rate for skilled nursing facilities.
    ``(3) Measure adjustments.--When specifying the measures
    under paragraphs (1) and (2), the Secretary shall devise a
    methodology to achieve a high level of reliability and validity,
    especially for skilled nursing facilities with a low volume of
    readmissions.
    ``(4) Pre-rulemaking process (measure application
    partnership process).--The application of the provisions of
    section 1890A shall be optional in the case of a measure
    specified under paragraph (1) and a measure specified under
    paragraph (2).
    ``(5)  Feedback reports to skilled nursing facilities.--
    Beginning <> October 1, 2016, and every
    quarter thereafter, the Secretary shall provide confidential
    feedback reports to skilled nursing facilities on the
    performance of such facilities with respect to a measure
    specified under paragraph (1) or (2).
    ``(6) Public reporting of skilled nursing facilities.--
    ``(A) <>  In
    general.--Subject to subparagraphs (B) and (C), the
    Secretary shall establish procedures for making
    available to the public by posting on the Nursing Home

    [[Page 1049]]

    Compare Medicare website (or a successor website)
    described in section 1819(i) information on the
    performance of skilled nursing facilities with respect
    to a measure specified under paragraph (1) and a measure
    specified under paragraph (2).
    ``(B) Opportunity to review.--The procedures under
    subparagraph (A) shall ensure that a skilled nursing
    facility has the opportunity to review and submit
    corrections to the information that is to be made public
    with respect to the facility prior to such information
    being made public.
    ``(C) Timing.--Such procedures shall provide that
    the information described in subparagraph (A) is made
    publicly available beginning not later than October 1,
    2017.
    ``(7) Non-application of paperwork reduction act.--Chapter
    35 of title 44, United States Code (commonly referred to as the
    `Paperwork Reduction Act of 1995') shall not apply to this
    subsection.''.

    (b) Value-Based Purchasing Program for Skilled Nursing Facilities.--
    Section 1888 of the Social Security Act (42 U.S.C. 1395yy), as amended
    by subsection (a), is further amended by adding at the end the following
    new subsection:
    ``(h) Skilled Nursing Facility Value-Based Purchasing Program.--
    ``(1) Establishment.--
    ``(A) In general.--Subject to the succeeding
    provisions of this subsection, the Secretary shall
    establish a skilled nursing facility value-based
    purchasing program (in this subsection referred to as
    the `SNF VBP Program') under which value-based incentive
    payments are made in a fiscal year to skilled nursing
    facilities.
    ``(B) <>  Program to begin in
    fiscal year 2019.--The SNF VBP Program shall apply to
    payments for services furnished on or after October 1,
    2018.
    ``(2) Application of measures.--
    ``(A) In general.--The Secretary shall apply the
    measure specified under subsection (g)(1) for purposes
    of the SNF VBP Program.
    ``(B) Replacement.--For purposes of the SNF VBP
    Program, the Secretary shall apply the measure specified
    under (g)(2) instead of the measure specified under
    (g)(1) as soon as practicable.
    ``(3) Performance standards.--
    ``(A) Establishment.--The Secretary shall establish
    performance standards with respect to the measure
    applied under paragraph (2) for a performance period for
    a fiscal year.
    ``(B) Higher of achievement and improvement.--The
    performance standards established under subparagraph (A)
    shall include levels of achievement and improvement. In
    calculating the SNF performance score under paragraph
    (4), the Secretary shall use the higher of either
    improvement or achievement.
    ``(C) Timing.--The Secretary shall establish and
    announce the performance standards established under
    subparagraph (A) not later than 60 days prior to the
    beginning of the performance period for the fiscal year
    involved.

    [[Page 1050]]

    ``(4) <>  SNF performance score.--
    ``(A) In general.--The Secretary shall develop a
    methodology for assessing the total performance of each
    skilled nursing facility based on performance standards
    established under paragraph (3) with respect to the
    measure applied under paragraph (2). Using such
    methodology, the Secretary shall provide for an
    assessment (in this subsection referred to as the `SNF
    performance score') for each skilled nursing facility
    for each such performance period.
    ``(B) Ranking of snf performance scores.--The
    Secretary shall, for the performance period for each
    fiscal year, rank the SNF performance scores determined
    under subparagraph (A) from low to high.
    ``(5) Calculation of value-based incentive payments.--
    ``(A) In general.--With respect to a skilled nursing
    facility, based on the ranking under paragraph (4)(B)
    for a performance period for a fiscal year, the
    Secretary shall increase the adjusted Federal per diem
    rate determined under subsection (e)(4)(G) otherwise
    applicable to such skilled nursing facility (and after
    application of paragraph (6)) for services furnished by
    such facility during such fiscal year by the value-based
    incentive payment amount under subparagraph (B).
    ``(B) Value-based incentive payment amount.--The
    value-based incentive payment amount for services
    furnished by a skilled nursing facility in a fiscal year
    shall be equal to the product of--
    ``(i) the adjusted Federal per diem rate
    determined under subsection (e)(4)(G) otherwise
    applicable to such skilled nursing facility for
    such services furnished by the skilled nursing
    facility during such fiscal year; and
    ``(ii) the value-based incentive payment
    percentage specified under subparagraph (C) for
    the skilled nursing facility for such fiscal year.
    ``(C) Value-based incentive payment percentage.--
    ``(i) In general.--The Secretary shall specify
    a value-based incentive payment percentage for a
    skilled nursing facility for a fiscal year which
    may include a zero percentage.
    ``(ii) Requirements.--In specifying the value-
    based incentive payment percentage for each
    skilled nursing facility for a fiscal year under
    clause (i), the Secretary shall ensure that--
    ``(I) such percentage is based on
    the SNF performance score of the skilled
    nursing facility provided under
    paragraph (4) for the performance period
    for such fiscal year;
    ``(II) the application of all such
    percentages in such fiscal year results
    in an appropriate distribution of value-
    based incentive payments under
    subparagraph (B) such that--
    ``(aa) skilled nursing
    facilities with the highest
    rankings under paragraph (4)(B)
    receive the highest value-based
    incentive payment amounts under
    subparagraph (B);

    [[Page 1051]]

    ``(bb) skilled nursing
    facilities with the lowest
    rankings under paragraph (4)(B)
    receive the lowest value-based
    incentive payment amounts under
    subparagraph (B); and
    ``(cc) in the case of
    skilled nursing facilities in
    the lowest 40 percent of the
    ranking under paragraph (4)(B),
    the payment rate under
    subparagraph (A) for services
    furnished by such facility
    during such fiscal year shall be
    less than the payment rate for
    such services for such fiscal
    year that would otherwise apply
    under subsection (e)(4)(G)
    without application of this
    subsection; and
    ``(III) the total amount of value-
    based incentive payments under this
    paragraph for all skilled nursing
    facilities in such fiscal year shall be
    greater than or equal to 50 percent, but
    not greater than 70 percent, of the
    total amount of the reductions to
    payments for such fiscal year under
    paragraph (6), as estimated by the
    Secretary.
    ``(6) Funding for value-based incentive payments.--
    ``(A) In general.--The Secretary shall reduce the
    adjusted Federal per diem rate determined under
    subsection (e)(4)(G) otherwise applicable to a skilled
    nursing facility for services furnished by such facility
    during a fiscal year (beginning with fiscal year 2019)
    by the applicable percent (as defined in subparagraph
    (B)). The Secretary shall make such reductions for all
    skilled nursing facilities in the fiscal year involved,
    regardless of whether or not the skilled nursing
    facility has been determined by the Secretary to have
    earned a value-based incentive payment under paragraph
    (5) for such fiscal year.
    ``(B) Applicable percent.--For purposes of
    subparagraph (A), the term `applicable percent' means,
    with respect to fiscal year 2019 and succeeding fiscal
    years, 2 percent.
    ``(7) Announcement of net result of adjustments.--
    Under <> the SNF VBP Program, the Secretary
    shall, not later than 60 days prior to the fiscal year involved,
    inform each skilled nursing facility of the adjustments to
    payments to the skilled nursing facility for services furnished
    by such facility during the fiscal year under paragraphs (5) and
    (6).
    ``(8) <>  No effect in subsequent
    fiscal years.--The value-based incentive payment under paragraph
    (5) and the payment reduction under paragraph (6) shall each
    apply only with respect to the fiscal year involved, and the
    Secretary shall not take into account such value-based incentive
    payment or payment reduction in making payments to a skilled
    nursing facility under this section in a subsequent fiscal year.
    ``(9) <>  Public reporting.--
    ``(A) SNF specific information.--The Secretary shall
    make available to the public, by posting on the Nursing
    Home Compare Medicare website (or a successor website)
    described in section 1819(i) in an easily understandable
    format, information regarding the performance of
    individual skilled nursing facilities under the SNF VBP
    Program, with respect to a fiscal year, including--

    [[Page 1052]]

    ``(i) the SNF performance score of the skilled
    nursing facility for such fiscal year; and
    ``(ii) the ranking of the skilled nursing
    facility under paragraph (4)(B) for the
    performance period for such fiscal year.
    ``(B)  Aggregate information.--The Secretary shall
    periodically post on the Nursing Home Compare Medicare
    website (or a successor website) described in section
    1819(i) aggregate information on the SNF VBP Program,
    including--
    ``(i) the range of SNF performance scores
    provided under paragraph (4)(A); and
    ``(ii) the number of skilled nursing
    facilities receiving value-based incentive
    payments under paragraph (5) and the range and
    total amount of such value-based incentive
    payments.
    ``(10) Limitation on review.--There shall be no
    administrative or judicial review under section 1869, section
    1878, or otherwise of the following:
    ``(A) The methodology used to determine the value-
    based incentive payment percentage and the amount of the
    value-based incentive payment under paragraph (5).
    ``(B) The determination of the amount of funding
    available for such value-based incentive payments under
    paragraph (5)(C)(ii)(III) and the payment reduction
    under paragraph (6).
    ``(C) The establishment of the performance standards
    under paragraph (3) and the performance period.
    ``(D) The methodology developed under paragraph (4)
    that is used to calculate SNF performance scores and the
    calculation of such scores.
    ``(E) The ranking determinations under paragraph
    (4)(B).
    ``(11) Funding for program management.--The Secretary shall
    provide for the one time transfer from the Federal Hospital
    Insurance Trust Fund established under section 1817 to the
    Centers for Medicare & Medicaid Services Program Management
    Account of--
    ``(A) for purposes of subsection (g)(2), $2,000,000;
    and
    ``(B) for purposes of implementing this subsection,
    $10,000,000.
    Such funds shall remain available until expended.''.

    (c) <>  MedPAC Study.--
    Not later than June 30, 2021, the Medicare Payment Advisory Commission
    shall submit to Congress a report that reviews the progress of the
    skilled nursing facility value-based purchasing program established
    under section 1888(h) of the Social Security Act, as added by subsection
    (b), and makes recommendations, as appropriate, on any improvements that
    should be made to such program. For purposes of the previous sentence,
    the Medicare Payment Advisory Commission shall consider any unintended
    consequences with respect to such skilled nursing facility value-based
    purchasing program and any potential adjustments to the readmission
    measure specified under section 1888(g)(1) of such Act, as added by
    subsection (a), for purposes of determining the effect of the socio-
    economic status of a beneficiary under the Medicare program under title
    XVIII of the Social Security Act

    [[Page 1053]]

    for the SNF performance score of a skilled nursing facility provided
    under section 1888(h)(4) of such Act, as added by subsection (b).
    SEC. 216. IMPROVING MEDICARE POLICIES FOR CLINICAL DIAGNOSTIC
    LABORATORY TESTS.

    (a) In General.--Title XVIII of the Social Security Act is amended
    by inserting after section 1834 (42 U.S.C. 1395m) the following new
    section:
    ``SEC. 1834A. <> IMPROVING POLICIES FOR
    CLINICAL DIAGNOSTIC LABORATORY TESTS.

    ``(a) Reporting of Private Sector Payment Rates for Establishment of
    Medicare Payment Rates.--
    ``(1) <>  In general.--Beginning
    January 1, 2016, and every 3 years thereafter (or, annually, in
    the case of reporting with respect to an advanced diagnostic
    laboratory test, as defined in subsection (d)(5)), an applicable
    laboratory (as defined in paragraph (2)) shall report to the
    Secretary, at a time specified by the Secretary, applicable
    information (as defined in paragraph (3)) for a data collection
    period (as defined in paragraph (4)) for each clinical
    diagnostic laboratory test that the laboratory furnishes during
    such period for which payment is made under this part.
    ``(2) Definition of applicable laboratory.--In this section,
    the term `applicable laboratory' means a laboratory that, with
    respect to its revenues under this title, a majority of such
    revenues are from this section, section 1833(h), or section
    1848. The Secretary may establish a low volume or low
    expenditure threshold for excluding a laboratory from the
    definition of applicable laboratory under this paragraph, as the
    Secretary determines appropriate.
    ``(3) Applicable information defined.--
    ``(A) In general.--In this section, subject to
    subparagraph (B), the term `applicable information'
    means, with respect to a laboratory test for a data
    collection period, the following:
    ``(i) The payment rate (as determined in
    accordance with paragraph (5)) that was paid by
    each private payor for the test during the period.
    ``(ii) The volume of such tests for each such
    payor for the period.
    ``(B) Exception for certain contractual
    arrangements.--Such term shall not include information
    with respect to a laboratory test for which payment is
    made on a capitated basis or other similar payment basis
    during the data collection period.
    ``(4) Data collection period defined.--In this section, the
    term `data collection period' means a period of time, such as a
    previous 12 month period, specified by the Secretary.
    ``(5) Treatment of discounts.--The payment rate reported by
    a laboratory under this subsection shall reflect all discounts,
    rebates, coupons, and other price concessions, including those
    described in section 1847A(c)(3).
    ``(6) Ensuring complete reporting.--In the case where an
    applicable laboratory has more than one payment rate for the
    same payor for the same test or more than one payment rate for
    different payors for the same test, the applicable laboratory
    shall report each such payment rate and the volume for

    [[Page 1054]]

    the test at each such rate under this
    subsection. <> Beginning with January 1,
    2019, the Secretary may establish rules to aggregate reporting
    with respect to the situations described in the preceding
    sentence.
    ``(7) Certification.--An officer of the laboratory shall
    certify the accuracy and completeness of the information
    reported under this subsection.
    ``(8) Private payor defined.--In this section, the term
    `private payor' means the following:
    ``(A) A health insurance issuer and a group health
    plan (as such terms are defined in section 2791 of the
    Public Health Service Act).
    ``(B) A Medicare Advantage plan under part C.
    ``(C) A medicaid managed care organization (as
    defined in section 1903(m)).
    ``(9) Civil money penalty.--
    ``(A) <>  In general.--If the
    Secretary determines that an applicable laboratory has
    failed to report or made a misrepresentation or omission
    in reporting information under this subsection with
    respect to a clinical diagnostic laboratory test, the
    Secretary may apply a civil money penalty in an amount
    of up to $10,000 per day for each failure to report or
    each such misrepresentation or omission.
    ``(B) Application.--The provisions of section 1128A
    (other than subsections (a) and (b)) shall apply to a
    civil money penalty under this paragraph in the same
    manner as they apply to a civil money penalty or
    proceeding under section 1128A(a).
    ``(10) Confidentiality of information.--Notwithstanding any
    other provision of law, information disclosed by a laboratory
    under this subsection is confidential and shall not be disclosed
    by the Secretary or a Medicare contractor in a form that
    discloses the identity of a specific payor or laboratory, or
    prices charged or payments made to any such laboratory, except--
    ``(A) as the Secretary determines to be necessary to
    carry out this section;
    ``(B) to permit the Comptroller General to review
    the information provided;
    ``(C) to permit the Director of the Congressional
    Budget Office to review the information provided; and
    ``(D) to permit the Medicare Payment Advisory
    Commission to review the information provided.
    ``(11) Protection from public disclosure.--A payor shall not
    be identified on information reported under this subsection. The
    name of an applicable laboratory under this subsection shall be
    exempt from disclosure under section 552(b)(3) of title 5,
    United States Code.
    ``(12) <>  Regulations.--Not later
    than June 30, 2015, the Secretary shall establish through notice
    and comment rulemaking parameters for data collection under this
    subsection.

    ``(b) Payment for Clinical Diagnostic Laboratory Tests.--
    ``(1) Use of private payor rate information to determine
    medicare payment rates.--
    ``(A) In general.--Subject to paragraph (3) and
    subsections (c) and (d), in the case of a clinical
    diagnostic laboratory test furnished on or after January
    1, 2017, the

    [[Page 1055]]

    payment amount under this section shall be equal to the
    weighted median determined for the test under paragraph
    (2) for the most recent data collection period.
    ``(B) Application of payment amounts to hospital
    laboratories.--The payment amounts established under
    this section shall apply to a clinical diagnostic
    laboratory test furnished by a hospital laboratory if
    such test is paid for separately, and not as part of a
    bundled payment under section 1833(t).
    ``(2) Calculation of weighted median.--For each laboratory
    test with respect to which information is reported under
    subsection (a) for a data collection period, the Secretary shall
    calculate a weighted median for the test for the period, by
    arraying the distribution of all payment rates reported for the
    period for each test weighted by volume for each payor and each
    laboratory.
    ``(3) Phase-in of reductions from private payor rate
    implementation.--
    ``(A) In general.--Payment amounts determined under
    this subsection for a clinical diagnostic laboratory
    test for each of 2017 through 2022 shall not result in a
    reduction in payments for a clinical diagnostic
    laboratory test for the year of greater than the
    applicable percent (as defined in subparagraph (B)) of
    the amount of payment for the test for the preceding
    year.
    ``(B) Applicable percent defined.--In this
    paragraph, the term `applicable percent' means--
    ``(i) for each of 2017 through 2019, 10
    percent; and
    ``(ii) for each of 2020 through 2022, 15
    percent.
    ``(C) No application to new tests.--This paragraph
    shall not apply to payment amounts determined under this
    section for either of the following.
    ``(i) A new test under subsection (c).
    ``(ii) A new advanced diagnostic test (as
    defined in subsection (d)(5)) under subsection
    (d).
    ``(4) Application of market rates.--
    ``(A) In general.--Subject to paragraph (3), once
    established for a year following a data collection
    period, the payment amounts under this subsection shall
    continue to apply until the year following the next data
    collection period.
    ``(B) Other adjustments not applicable.--The payment
    amounts under this section shall not be subject to any
    adjustment (including any geographic adjustment, budget
    neutrality adjustment, annual update, or other
    adjustment).
    ``(5) Sample collection fee.--In the case of a sample
    collected from an individual in a skilled nursing facility or by
    a laboratory on behalf of a home health agency, the nominal fee
    that would otherwise apply under section 1833(h)(3)(A) shall be
    increased by $2.

    ``(c) Payment for New Tests That Are Not Advanced Diagnostic
    Laboratory Tests.--
    ``(1) Payment during initial period.--In the case of a
    clinical diagnostic laboratory test that is assigned a new or

    [[Page 1056]]

    substantially revised HCPCS code on or after the date of
    enactment of this section, and which is not an advanced
    diagnostic laboratory test (as defined in subsection (d)(5)),
    during an initial period until payment rates under subsection
    (b) are established for the test, payment for the test shall be
    determined--
    ``(A) using cross-walking (as described in section
    414.508(a) of title 42, Code of Federal Regulations, or
    any successor regulation) to the most appropriate
    existing test under the fee schedule under this section
    during that period; or
    ``(B) if no existing test is comparable to the new
    test, according to the gapfilling process described in
    paragraph (2).
    ``(2) Gapfilling process described.--The gapfilling process
    described in this paragraph shall take into account the
    following sources of information to determine gapfill amounts,
    if available:
    ``(A) Charges for the test and routine discounts to
    charges.
    ``(B) Resources required to perform the test.
    ``(C) Payment amounts determined by other payors.
    ``(D) Charges, payment amounts, and resources
    required for other tests that may be comparable or
    otherwise relevant.
    ``(E) Other criteria the Secretary determines
    appropriate.
    ``(3) Additional consideration.--In determining the payment
    amount under crosswalking or gapfilling processes under this
    subsection, the Secretary shall consider recommendations from
    the panel established under subsection (f)(1).
    ``(4) <>  Explanation of payment
    rates.--In the case of a clinical diagnostic laboratory test for
    which payment is made under this subsection, the Secretary shall
    make available to the public an explanation of the payment rate
    for the test, including an explanation of how the criteria
    described in paragraph (2) and paragraph (3) are applied.

    ``(d) Payment for New Advanced Diagnostic Laboratory Tests.--
    ``(1) Payment during initial period.--
    ``(A) In general.--In the case of an advanced
    diagnostic laboratory test for which payment has not
    been made under the fee schedule under section 1833(h)
    prior to the date of enactment of this section, during
    an initial period of three quarters, the payment amount
    for the test for such period shall be based on the
    actual list charge for the laboratory test.
    ``(B) <>  Actual list charge.--
    For purposes of subparagraph (A), the term `actual list
    charge', with respect to a laboratory test furnished
    during such period, means the publicly available rate on
    the first day at which the test is available for
    purchase by a private payor.
    ``(2) Special rule for timing of initial reporting.--With
    respect to an advanced diagnostic laboratory test described in
    paragraph (1)(A), an applicable laboratory shall initially be
    required to report under subsection (a) not later than the last
    day of the second quarter of the initial period under such
    paragraph.

    [[Page 1057]]

    ``(3) Application of market rates after initial period.--
    Subject to paragraph (4), data reported under paragraph (2)
    shall be used to establish the payment amount for an advanced
    diagnostic laboratory test after the initial period under
    paragraph (1)(A) using the methodology described in subsection
    (b). Such payment amount shall continue to apply until the year
    following the next data collection period.
    ``(4) Recoupment if actual list charge exceeds market
    rate.--With <> respect to the initial
    period described in paragraph (1)(A), if, after such period, the
    Secretary determines that the payment amount for an advanced
    diagnostic laboratory test under paragraph (1)(A) that was
    applicable during the period was greater than 130 percent of the
    payment amount for the test established using the methodology
    described in subsection (b) that is applicable after such
    period, the Secretary shall recoup the difference between such
    payment amounts for tests furnished during such period.
    ``(5) Advanced diagnostic laboratory test defined.--In this
    subsection, the term `advanced diagnostic laboratory test' means
    a clinical diagnostic laboratory test covered under this part
    that is offered and furnished only by a single laboratory and
    not sold for use by a laboratory other than the original
    developing laboratory (or a successor owner) and meets one of
    the following criteria:
    ``(A) The test is an analysis of multiple biomarkers
    of DNA, RNA, or proteins combined with a unique
    algorithm to yield a single patient-specific result.
    ``(B) The test is cleared or approved by the Food
    and Drug Administration.
    ``(C) The test meets other similar criteria
    established by the Secretary.

    ``(e) Coding.--
    ``(1) Temporary codes for certain new tests.--
    ``(A) In general.--The Secretary shall adopt
    temporary HCPCS codes to identify new advanced
    diagnostic laboratory tests (as defined in subsection
    (d)(5)) and new laboratory tests that are cleared or
    approved by the Food and Drug Administration.
    ``(B) Duration.--
    ``(i) In general.--Subject to clause (ii), the
    temporary code shall be effective until a
    permanent HCPCS code is established (but not to
    exceed 2 years).
    ``(ii) Exception.--The Secretary may extend
    the temporary code or establish a permanent HCPCS
    code, as the Secretary determines appropriate.
    ``(2) <>  Existing tests.--Not later than
    January 1, 2016, for each existing advanced diagnostic
    laboratory test (as so defined) and each existing clinical
    diagnostic laboratory test that is cleared or approved by the
    Food and Drug Administration for which payment is made under
    this part as of the date of enactment of this section, if such
    test has not already been assigned a unique HCPCS code, the
    Secretary shall--
    ``(A) assign a unique HCPCS code for the test; and
    ``(B) <>  publicly report
    the payment rate for the test.
    ``(3) Establishment of unique identifier for certain
    tests.--For purposes of tracking and monitoring, if a laboratory
    or a manufacturer requests a unique identifier for an advanced

    [[Page 1058]]

    diagnostic laboratory test (as so defined) or a laboratory test
    that is cleared or approved by the Food and Drug Administration,
    the Secretary shall utilize a means to uniquely track such test
    through a mechanism such as a HCPCS code or modifier.

    ``(f) Input From Clinicians and Technical Experts.--
    ``(1) <>  In
    general.--The Secretary shall consult with an expert outside
    advisory panel, established by the Secretary not later than July
    1, 2015, composed of an appropriate selection of individuals
    with expertise, which may include molecular pathologists,
    researchers, and individuals with expertise in laboratory
    science or health economics, in issues related to clinical
    diagnostic laboratory tests, which may include the development,
    validation, performance, and application of such tests, to
    provide--
    ``(A) input on--
    ``(i) the establishment of payment rates under
    this section for new clinical diagnostic
    laboratory tests, including whether to use
    crosswalking or gapfilling processes to determine
    payment for a specific new test; and
    ``(ii) the factors used in determining
    coverage and payment processes for new clinical
    diagnostic laboratory tests; and
    ``(B) <>  recommendations
    to the Secretary under this section.
    ``(2) Compliance with faca.--The panel shall be subject to
    the Federal Advisory Committee Act (5 U.S.C. App.).
    ``(3) Continuation of annual meeting.--The Secretary shall
    continue to convene the annual meeting described in section
    1833(h)(8)(B)(iii) after the implementation of this section for
    purposes of receiving comments and recommendations (and data on
    which the recommendations are based) as described in such
    section on the establishment of payment amounts under this
    section.

    ``(g) Coverage.--
    ``(1) Issuance of coverage policies.--
    ``(A) In general.--A medicare administrative
    contractor shall only issue a coverage policy with
    respect to a clinical diagnostic laboratory test in
    accordance with the process for making a local coverage
    determination (as defined in section 1869(f)(2)(B)),
    including the appeals and review process for local
    coverage determinations under part 426 of title 42, Code
    of Federal Regulations (or successor regulations).
    ``(B) No effect on national coverage determination
    process.--This paragraph shall not apply to the national
    coverage determination process (as defined in section
    1869(f)(1)(B)).
    ``(C) Effective date.--This paragraph shall apply to
    coverage policies issued on or after January 1, 2015.
    ``(2) Designation of one or more medicare administrative
    contractors for clinical diagnostic laboratory tests.--The
    Secretary may designate one or more (not to exceed 4) medicare
    administrative contractors to either establish coverage policies
    or establish coverage policies and process claims

    [[Page 1059]]

    for payment for clinical diagnostic laboratory tests, as
    determined appropriate by the Secretary.

    ``(h) Implementation.--
    ``(1) Implementation.--There shall be no administrative or
    judicial review under section 1869, section 1878, or otherwise,
    of the establishment of payment amounts under this section.
    ``(2) Administration.--Chapter 35 of title 44, United States
    Code, shall not apply to information collected under this
    section.
    ``(3) Funding.--For purposes of implementing this section,
    the Secretary shall provide for the transfer, from the Federal
    Supplementary Medical Insurance Trust Fund under section 1841,
    to the Centers for Medicare & Medicaid Services Program
    Management Account, for each of fiscal years 2014 through 2018,
    $4,000,000, and for each of fiscal years 2019 through 2023,
    $3,000,000. Amounts transferred under the preceding sentence
    shall remain available until expended.

    ``(i) <>  Transitional Rule.--During the period
    beginning on the date of enactment of this section and ending on
    December 31, 2016, with respect to advanced diagnostic laboratory tests
    under this part, the Secretary shall use the methodologies for pricing,
    coding, and coverage in effect on the day before such date of enactment,
    which may include cross-walking or gapfilling methods.''.

    (b) Conforming Amendments.--
    (1) Section 1833(a) of the Social Security Act (42 U.S.C.
    1395l(a)) is amended--
    (A) in paragraph (1)(D)--
    (i) by striking ``(i) on the basis'' and
    inserting ``(i)(I) on the basis'';
    (ii) in subclause (I), as added by clause (i),
    by striking ``subsection (h)(1)'' and inserting
    ``subsection (h)(1) (for tests furnished before
    January 1, 2017)'';
    (iii) by striking ``or (ii)'' and inserting
    ``or (II) under section 1834A (for tests furnished
    on or after January 1, 2017), the amount paid
    shall be equal to 80 percent (or 100 percent, in
    the case of such tests for which payment is made
    on an assignment-related basis) of the lesser of
    the amount determined under such section or the
    amount of the charges billed for the tests, or
    (ii)''; and
    (iv) in clause (ii), by striking ``on the
    basis'' and inserting ``for tests furnished before
    January 1, 2017, on the basis'';
    (B) in paragraph (2)(D)--
    (i) by striking ``(i) on the basis'' and
    inserting ``(i)(I) on the basis'';
    (ii) in subclause (I), as added by clause (i),
    by striking ``subsection (h)(1)'' and inserting
    ``subsection (h)(1) (for tests furnished before
    January 1, 2017)'';
    (iii) by striking ``or (ii)'' and inserting
    ``or (II) under section 1834A (for tests furnished
    on or after January 1, 2017), the amount paid
    shall be equal to 80 percent (or 100 percent, in
    the case of such tests for which payment is made
    on an assignment-related basis or to a provider
    having an agreement under section 1866) of the
    lesser of the amount determined under such

    [[Page 1060]]

    section or the amount of the charges billed for
    the tests, or (ii)''; and
    (iv) in clause (ii), by striking ``on the
    basis'' and inserting ``for tests furnished before
    January 1, 2017, on the basis'';
    (C) in subsection (b)(3)(B), by striking ``on the
    basis'' and inserting ``for tests furnished before
    January 1, 2017, on the basis'';
    (D) in subsection (h)(2)(A)(i), by striking ``and
    subject to'' and inserting ``and, for tests furnished
    before the date of enactment of section 1834A, subject
    to'';
    (E) in subsection (h)(3), in the matter preceding
    subparagraph (A), by striking ``fee schedules'' and
    inserting ``fee schedules (for tests furnished before
    January 1, 2017) or under section 1834A (for tests
    furnished on or after January 1, 2017), subject to
    subsection (b)(5) of such section'';
    (F) in subsection (h)(6), by striking ``In the
    case'' and inserting ``For tests furnished before
    January 1, 2017, in the case''; and
    (G) in subsection (h)(7), in the first sentence--
    (i) by striking ``and (4)'' and inserting
    ``and (4) and section 1834A''; and
    (ii) by striking ``under this subsection'' and
    inserting ``under this part''.
    (2) Section 1869(f)(2) of the Social Security Act (42 U.S.C.
    1395ff(f)(2)) is amended by adding at the end the following new
    subparagraph:
    ``(C) Local coverage determinations for clinical
    diagnostic laboratory tests.--For provisions relating to
    local coverage determinations for clinical diagnostic
    laboratory tests, see section 1834A(g).''.

    (c) GAO Study and Report; Monitoring of Medicare Expenditures and
    Implementation of New Payment System for Laboratory Tests.--
    (1) GAO study and report on implementation of new payment
    rates for clinical diagnostic laboratory tests.--
    (A) Study.--The Comptroller General of the United
    States (in this subsection referred to as the
    ``Comptroller General'') shall conduct a study on the
    implementation of section 1834A of the Social Security
    Act, as added by subsection (a). The study shall include
    an analysis of--
    (i) payment rates paid by private payors for
    laboratory tests furnished in various settings,
    including--
    (I) how such payment rates compare
    across settings;
    (II) the trend in payment rates over
    time; and
    (III) trends by private payors to
    move to alternative payment
    methodologies for laboratory tests;
    (ii) the conversion to the new payment rate
    for laboratory tests under such section;
    (iii) the impact of such implementation on
    beneficiary access under title XVIII of the Social
    Security Act;

    [[Page 1061]]

    (iv) the impact of the new payment system on
    laboratories that furnish a low volume of services
    and laboratories that specialize in a small number
    of tests;
    (v) the number of new Healthcare Common
    Procedure Coding System (HCPCS) codes issued for
    laboratory tests;
    (vi) the spending trend for laboratory tests
    under such title;
    (vii) whether the information reported by
    laboratories and the new payment rates for
    laboratory tests under such section accurately
    reflect market prices;
    (viii) the initial list price for new
    laboratory tests and the subsequent reported rates
    for such tests under such section;
    (ix) changes in the number of advanced
    diagnostic laboratory tests and laboratory tests
    cleared or approved by the Food and Drug
    Administration for which payment is made under
    such section; and
    (x) healthcare economic information on
    downstream cost impacts for such tests and
    decision making based on accepted methodologies.
    (B) <>  Report.--Not later
    than October 1, 2018, the Comptroller General shall
    submit to the Committee on Ways and Means and the
    Committee on Energy and Commerce of the House of
    Representatives and the Committee on Finance of the
    Senate a report on the study under subparagraph (A),
    including recommendations for such legislation and
    administrative action as the Comptroller General
    determines appropriate.
    (2) <>  Monitoring of
    medicare expenditures and implementation of new payment system
    for laboratory tests.--The Inspector General of the Department
    of Health and Human Services shall--
    (A) <>
    publicly release an annual analysis of the top 25
    laboratory tests by expenditures under title XVIII of
    the Social Security Act; and
    (B) conduct analyses the Inspector General
    determines appropriate with respect to the
    implementation and effect of the new payment system for
    laboratory tests under section 1834A of the Social
    Security Act, as added by subsection (a).
    SEC. 217. REVISIONS UNDER THE MEDICARE ESRD PROSPECTIVE PAYMENT
    SYSTEM.

    (a) Delay of Implementation of Oral-Only Policy.--Section 632(b)(1)
    of the American Taxpayer Relief Act of 2012 (42 U.S.C. 1395rr note) is
    amended--
    (1) by striking ``2016'' and inserting ``2024''; and
    (2) by adding at the end the following new sentence:
    ``Notwithstanding section 1881(b)(14)(A)(ii) of the Social
    Security Act (42 U.S.C. 1395rr(b)(14)(A)(ii)), implementation of
    the policy described in the previous sentence shall be based on
    data from the most recent year available.''.

    (b) Mitigation of the Application of Adjustment to ESRD Bundled
    Payment Rate To Account for Changes in the Utilization of Certain Drugs
    and Biologicals.--

    [[Page 1062]]

    (1) In general.--Section 1881(b)(14)(I) of the Social
    Security Act (42 U.S.C. 1395rr(b)(14)(I)) is amended by
    inserting ``and before January 1, 2015,'' after ``January 1,
    2014,''.
    (2) Market basket.--Section 1881(b)(14)(F)(i) of the Social
    Security Act (42 U.S.C. 1395rr(b)(14)(F)(i)) is amended--
    (A) in subclause (I)--
    (i) by striking ``subclause (II)'' and
    inserting ``subclauses (II) and (III)''; and
    (ii) by adding at the end the following new
    sentence: ``In order to accomplish the purposes of
    subparagraph (I) with respect to 2016, 2017, and
    2018, after determining the increase factor
    described in the preceding sentence for each of
    2016, 2017, and 2018, the Secretary shall reduce
    such increase factor by 1.25 percentage points for
    each of 2016 and 2017 and by 1 percentage point
    for 2018.'';
    (B) in subclause (II), by striking ``For 2012'' and
    inserting ``Subject to subclause (III), for 2012''; and
    (C) by adding at the end the following new
    subclause:
    ``(III) Notwithstanding subclauses (I) and (II), in order to
    accomplish the purposes of subparagraph (I) with respect to
    2015, the increase factor described in subclause (I) for 2015
    shall be 0.0 percent pursuant to the regulation issued by the
    Secretary on December 2, 2013, entitled `Medicare Program; End-
    Stage Renal Disease Prospective Payment System, Quality
    Incentive Program, and Durable Medical Equipment, Prosthetics,
    Orthotics, and Supplies; Final Rule' (78 Fed. Reg. 72156).''.

    (c) <>  Drug Designations.--As
    part of the promulgation of annual rule for the Medicare end stage renal
    disease prospective payment system under section 1881(b)(14) of the
    Social Security Act (42 U.S.C. 1395rr(b)(14)) for calendar year 2016,
    the Secretary of Health and Human Services (in this subsection referred
    to as the ``Secretary'') shall establish a process for--
    (1) determining when a product is no longer an oral-only
    drug; and
    (2) including new injectable and intravenous products into
    the bundled payment under such system.

    (d) Quality Measures Related to Conditions Treated by Oral-Only
    Drugs Under the ESRD Quality Incentive Program.--Section 1881(h)(2) of
    the Social Security Act (42 U.S.C. 1395rr(h)(2)) is amended--
    (1) in subparagraph (A)--
    (A) in clause (ii), by striking ``and'' at the end;
    (B) by redesignating clause (iii) as clause (iv);
    and
    (C) by inserting after clause (ii) the following new
    clause:
    ``(iii) for 2016 and subsequent years,
    measures described in subparagraph (E)(i); and'';
    (2) in subparagraph (B)(i), by striking ``(A)(iii)'' and
    inserting ``(A)(iv)''; and
    (3) by adding at the end the following new subparagraph:
    ``(E) Measures specific to the conditions treated
    with oral-only drugs.--
    ``(i) In general.--The measures described in
    this subparagraph are measures specified by the
    Secretary that are specific to the conditions
    treated with oral-

    [[Page 1063]]

    only drugs. To the extent feasible, such measures
    shall be outcomes-based measures.
    ``(ii) Consultation.--In specifying the
    measures under clause (i), the Secretary shall
    consult with interested stakeholders.
    ``(iii) Use of endorsed measures.--
    ``(I) In general.--Subject to
    subclause (I), any measures specified
    under clause (i) must have been endorsed
    by the entity with a contract under
    section 1890(a).
    ``(II) Exception.--If the entity
    with a contract under section 1890(a)
    has not endorsed a measure for a
    specified area or topic related to
    measures described in clause (i) that
    the Secretary determines appropriate,
    the Secretary may specify a measure that
    is endorsed or adopted by a consensus
    organization recognized by the Secretary
    that has expertise in clinical
    guidelines for kidney disease.''.

    (e) <>  Audits of Cost Reports of ESRD
    Providers as Recommended by MedPAC.--
    (1) In general.--The Secretary of Health and Human Services
    shall conduct audits of Medicare cost reports beginning during
    2012 for a representative sample of providers of services and
    renal dialysis facilities furnishing renal dialysis services.
    (2) Funding.--For purposes of carrying out paragraph (1),
    the Secretary of Health and Human Services shall provide for the
    transfer from the Federal Supplementary Medical Insurance Trust
    Fund established under section 1841 of the Social Security Act
    (42 U.S.C. 1395t) to the Centers for Medicare & Medicaid
    Services Program Management Account of $18,000,000 for fiscal
    year 2014. Amounts transferred under this paragraph for a fiscal
    year shall be available until expended.
    SEC. 218. QUALITY INCENTIVES FOR COMPUTED TOMOGRAPHY DIAGNOSTIC
    IMAGING AND PROMOTING EVIDENCE-BASED CARE.

    (a) Quality Incentives To Promote Patient Safety and Public Health
    in Computed Tomography Diagnostic Imaging.--
    (1) In general.--Section 1834 of the Social Security Act (42
    U.S.C. 1395m) is amended by adding at the end the following new
    subsection:

    ``(p) Quality Incentives To Promote Patient Safety and Public Health
    in Computed Tomography.--
    ``(1) Quality incentives.--In the case of an applicable
    computed tomography service (as defined in paragraph (2)) for
    which payment is made under an applicable payment system (as
    defined in paragraph (3)) and that is furnished on or after
    January 1, 2016, using equipment that is not consistent with the
    CT equipment standard (described in paragraph (4)), the payment
    amount for such service shall be reduced by the applicable
    percentage (as defined in paragraph (5)).
    ``(2) Applicable computed tomography services defined.--In
    this subsection, the term `applicable computed tomography
    service' means a service billed using diagnostic radiological
    imaging codes for computed tomography (identified

    [[Page 1064]]

    as of January 1, 2014, by HCPCS codes 70450-70498, 71250-71275,
    72125-72133, 72191-72194, 73200-73206, 73700-73706, 74150-74178,
    74261-74263, and 75571-75574 (and any succeeding codes).
    ``(3) Applicable payment system defined.--In this
    subsection, the term `applicable payment system' means the
    following:
    ``(A) The technical component and the technical
    component of the global fee under the fee schedule
    established under section 1848(b).
    ``(B) The prospective payment system for hospital
    outpatient department services under section 1833(t).
    ``(4) <>  Consistency with ct equipment
    standard.--In this subsection, the term `not consistent with the
    CT equipment standard' means, with respect to an applicable
    computed tomography service, that the service was furnished
    using equipment that does not meet each of the attributes of the
    National Electrical Manufacturers Association (NEMA) Standard
    XR-29-2013, entitled `Standard Attributes on CT Equipment
    Related to Dose Optimization and Management'. Through
    rulemaking, the Secretary may apply successor standards.
    ``(5) Applicable percentage defined.--In this subsection,
    the term `applicable percentage' means--
    ``(A) for 2016, 5 percent; and
    ``(B) for 2017 and subsequent years, 15 percent.
    ``(6) Implementation.--
    ``(A) Information.--The Secretary shall require that
    information be provided and attested to by a supplier
    and a hospital outpatient department that indicates
    whether an applicable computed tomography service was
    furnished that was not consistent with the CT equipment
    standard (described in paragraph (4)). Such information
    may be included on a claim and may be
    a <> modifier. Such information
    shall be verified, as appropriate, as part of the
    periodic accreditation of suppliers under section
    1834(e) and hospitals under section 1865(a).
    ``(B) Administration.--Chapter 35 of title 44,
    United States Code, shall not apply to information
    described in subparagraph (A).''.
    (2) Conforming amendments.--
    (A) Prospective payment system for hospital
    outpatient department services.--Section 1833(t) of the
    Social Security Act (42 1395l(t)) is amended by adding
    at the end the following new paragraph:
    ``(20) Not budget neutral application of reduced
    expenditures resulting from quality incentives for computed
    tomography.--The Secretary shall not take into account the
    reduced expenditures that result from the application of section
    1834(p) in making any budget neutrality adjustments this
    subsection.''.
    (B) Physician fee schedule.--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) Reduced expenditures
    attributable to application of quality
    incentives for computed tomography.--
    Effective <> for
    fee schedules

    [[Page 1065]]

    established beginning with 2016, reduced
    expenditures attributable to the
    application of the quality incentives
    for computed tomography under section
    1834(p)''.

    (b) Promoting Evidence-Based Care.--
    (1) In general.--Section 1834 of the Social Security Act (42
    U.S.C. 1395m), as amended by subsection (a), is amended by
    adding at the end the following new subsection:

    ``(q) Recognizing Appropriate Use Criteria for Certain Imaging
    Services.--
    ``(1) Program established.--
    ``(A) In general.--The Secretary shall establish a
    program to promote the use of appropriate use criteria
    (as defined in subparagraph (B)) for applicable imaging
    services (as defined in subparagraph (C)) furnished in
    an applicable setting (as defined in subparagraph (D))
    by ordering professionals and furnishing professionals
    (as defined in subparagraphs (E) and (F), respectively).
    ``(B) Appropriate use criteria defined.--In this
    subsection, the term `appropriate use criteria' means
    criteria, only developed or endorsed by national
    professional medical specialty societies or other
    provider-led entities, to assist ordering professionals
    and furnishing professionals in making the most
    appropriate treatment decision for a specific clinical
    condition for an individual. To the extent feasible,
    such criteria shall be evidence-based.
    ``(C) Applicable imaging service defined.--In this
    subsection, the term `applicable imaging service' means
    an advanced diagnostic imaging service (as defined in
    subsection (e)(1)(B)) for which the Secretary
    determines--
    ``(i) one or more applicable appropriate use
    criteria specified under paragraph (2) apply;
    ``(ii) there are one or more qualified
    clinical decision support mechanisms listed under
    paragraph (3)(C); and
    ``(iii) one or more of such mechanisms is
    available free of charge.
    ``(D) Applicable setting defined.--In this
    subsection, the term `applicable setting' means a
    physician's office, a hospital outpatient department
    (including an emergency department), an ambulatory
    surgical center, and any other provider-led outpatient
    setting determined appropriate by the Secretary.
    ``(E) Ordering professional defined.--In this
    subsection, the term `ordering professional' means a
    physician (as defined in section 1861(r)) or a
    practitioner described in section 1842(b)(18)(C) who
    orders an applicable imaging service.
    ``(F) Furnishing professional defined.--In this
    subsection, the term `furnishing professional' means a
    physician (as defined in section 1861(r)) or a
    practitioner described in section 1842(b)(18)(C) who
    furnishes an applicable imaging service.
    ``(2) Establishment of applicable appropriate use
    criteria.--

    [[Page 1066]]

    ``(A) <>  In
    general.--Not later than November 15, 2015, the
    Secretary shall through rulemaking, and in consultation
    with physicians, practitioners, and other stakeholders,
    specify applicable appropriate use criteria for
    applicable imaging services only from among appropriate
    use criteria developed or endorsed by national
    professional medical specialty societies or other
    provider-led entities.
    ``(B) Considerations.--In specifying applicable
    appropriate use criteria under subparagraph (A), the
    Secretary shall take into account whether the criteria--
    ``(i) have stakeholder consensus;
    ``(ii) are scientifically valid and evidence
    based; and
    ``(iii) are based on studies that are
    published and reviewable by stakeholders.
    ``(C) <>  Revisions.--The
    Secretary shall review, on an annual basis, the
    specified applicable appropriate use criteria to
    determine if there is a need to update or revise (as
    appropriate) such specification of applicable
    appropriate use criteria and make such updates or
    revisions through rulemaking.
    ``(D) Treatment of multiple applicable appropriate
    use criteria.--In the case where the Secretary
    determines that more than one appropriate use criterion
    applies with respect to an applicable imaging service,
    the Secretary shall apply one or more applicable
    appropriate use criteria under this paragraph for the
    service.
    ``(3) Mechanisms for consultation with applicable
    appropriate use criteria.--
    ``(A) Identification of mechanisms to consult with
    applicable appropriate use criteria.--
    ``(i) In general.--The Secretary shall specify
    qualified clinical decision support mechanisms
    that could be used by ordering professionals to
    consult with applicable appropriate use criteria
    for applicable imaging services.
    ``(ii) Consultation.--The Secretary shall
    consult with physicians, practitioners, health
    care technology experts, and other stakeholders in
    specifying mechanisms under this paragraph.
    ``(iii) Inclusion of certain mechanisms.--
    Mechanisms specified under this paragraph may
    include any or all of the following that meet the
    requirements described in subparagraph (B)(ii):
    ``(I) Use of clinical decision
    support modules in certified EHR
    technology (as defined in section
    1848(o)(4)).
    ``(II) Use of private sector
    clinical decision support mechanisms
    that are independent from certified EHR
    technology, which may include use of
    clinical decision support mechanisms
    available from medical specialty
    organizations.
    ``(III) Use of a clinical decision
    support mechanism established by the
    Secretary.
    ``(B) Qualified clinical decision support
    mechanisms.--

    [[Page 1067]]

    ``(i) In general.--For purposes of this
    subsection, a qualified clinical decision support
    mechanism is a mechanism that the Secretary
    determines meets the requirements described in
    clause (ii).
    ``(ii) Requirements.--The requirements
    described in this clause are the following:
    ``(I) The mechanism makes available
    to the ordering professional applicable
    appropriate use criteria specified under
    paragraph (2) and the supporting
    documentation for the applicable imaging
    service ordered.
    ``(II) In the case where there is
    more than one applicable appropriate use
    criterion specified under such paragraph
    for an applicable imaging service, the
    mechanism indicates the criteria that it
    uses for the service.
    ``(III) The mechanism determines the
    extent to which an applicable imaging
    service ordered is consistent with the
    applicable appropriate use criteria so
    specified.
    ``(IV) The mechanism generates and
    provides to the ordering professional a
    certification or documentation that
    documents that the qualified clinical
    decision support mechanism was consulted
    by the ordering professional.
    ``(V) The mechanism is updated on a
    timely basis to reflect revisions to the
    specification of applicable appropriate
    use criteria under such paragraph.
    ``(VI) The mechanism meets privacy
    and security standards under applicable
    provisions of law.
    ``(VII) The mechanism performs such
    other functions as specified by the
    Secretary, which may include a
    requirement to provide aggregate
    feedback to the ordering professional.
    ``(C) <>  List of mechanisms for
    consultation with applicable appropriate use criteria.--
    ``(i) <>  Initial list.--
    Not later than April 1, 2016, the Secretary shall
    publish a list of mechanisms specified under this
    paragraph.
    ``(ii) Periodic updating of list.--The
    Secretary shall identify on an annual basis the
    list of qualified clinical decision support
    mechanisms specified under this paragraph.
    ``(4) Consultation with applicable appropriate use
    criteria.--
    ``(A) Consultation by ordering professional.--
    Beginning <> with January 1,
    2017, subject to subparagraph (C), with respect to an
    applicable imaging service ordered by an ordering
    professional that would be furnished in an applicable
    setting and paid for under an applicable payment system
    (as defined in subparagraph (D)), an ordering
    professional shall--
    ``(i) consult with a qualified decision
    support mechanism listed under paragraph (3)(C);
    and

    [[Page 1068]]

    ``(ii) provide to the furnishing professional
    the information described in clauses (i) through
    (iii) of subparagraph (B).
    ``(B) <>  Reporting by
    furnishing professional.--Beginning with January 1,
    2017, subject to subparagraph (C), with respect to an
    applicable imaging service furnished in an applicable
    setting and paid for under an applicable payment system
    (as defined in subparagraph (D)), payment for such
    service may only be made if the claim for the service
    includes the following:
    ``(i) Information about which qualified
    clinical decision support mechanism was consulted
    by the ordering professional for the service.
    ``(ii) Information regarding--
    ``(I) whether the service ordered
    would adhere to the applicable
    appropriate use criteria specified under
    paragraph (2);
    ``(II) whether the service ordered
    would not adhere to such criteria; or
    ``(III) whether such criteria was
    not applicable to the service ordered.
    ``(iii) The national provider identifier of
    the ordering professional (if different from the
    furnishing professional).
    ``(C) Exceptions.--The provisions of subparagraphs
    (A) and (B) and paragraph (6)(A) shall not apply to the
    following:
    ``(i) Emergency services.--An applicable
    imaging service ordered for an individual with an
    emergency medical condition (as defined in section
    1867(e)(1)).
    ``(ii) Inpatient services.--An applicable
    imaging service ordered for an inpatient and for
    which payment is made under part A.
    ``(iii) Significant hardship.--An applicable
    imaging service ordered by an ordering
    professional who the Secretary may, on a case-by-
    case basis, exempt from the application of such
    provisions if the Secretary determines, subject to
    annual renewal, that consultation with applicable
    appropriate use criteria would result in a
    significant hardship, such as in the case of a
    professional who practices in a rural area without
    sufficient Internet access.
    ``(D) Applicable payment system defined.--In this
    subsection, the term `applicable payment system' means
    the following:
    ``(i) The physician fee schedule established
    under section 1848(b).
    ``(ii) The prospective payment system for
    hospital outpatient department services under
    section 1833(t).
    ``(iii) The ambulatory surgical center payment
    systems under section 1833(i).
    ``(5) Identification of outlier ordering professionals.--
    ``(A) <>  In
    general.--With respect to applicable imaging services
    furnished beginning with 2017, the Secretary shall
    determine, on an annual basis, no more than five percent

    [[Page 1069]]

    of the total number of ordering professionals who are
    outlier ordering professionals.
    ``(B) Outlier ordering professionals.--The
    determination of an outlier ordering professional
    shall--
    ``(i) be based on low adherence to applicable
    appropriate use criteria specified under paragraph
    (2), which may be based on comparison to other
    ordering professionals; and
    ``(ii) include data for ordering professionals
    for whom prior authorization under paragraph
    (6)(A) applies.
    ``(C) Use of two years of data.--The Secretary shall
    use two years of data to identify outlier ordering
    professionals under this paragraph.
    ``(D) Process.--The Secretary shall establish a
    process for determining when an outlier ordering
    professional is no longer an outlier ordering
    professional.
    ``(E) Consultation with stakeholders.--The Secretary
    shall consult with physicians, practitioners and other
    stakeholders in developing methods to identify outlier
    ordering professionals under this paragraph.
    ``(6) Prior authorization for ordering professionals who are
    outliers.--
    ``(A) <>  In general.--
    Beginning January 1, 2020, subject to paragraph (4)(C),
    with respect to services furnished during a year, the
    Secretary shall, for a period determined appropriate by
    the Secretary, apply prior authorization for applicable
    imaging services that are ordered by an outlier ordering
    professional identified under paragraph (5).
    ``(B) Appropriate use criteria in prior
    authorization.--In applying prior authorization under
    subparagraph (A), the Secretary shall utilize only the
    applicable appropriate use criteria specified under this
    subsection.
    ``(C) Funding.--For purposes of carrying out this
    paragraph, the Secretary shall provide for the transfer,
    from the Federal Supplementary Medical Insurance Trust
    Fund under section 1841, of $5,000,000 to the Centers
    for Medicare & Medicaid Services Program Management
    Account for each of fiscal years 2019 through 2021.
    Amounts transferred under the preceding sentence shall
    remain available until expended.
    ``(7) Construction.--Nothing in this subsection shall be
    construed as granting the Secretary the authority to develop or
    initiate the development of clinical practice guidelines or
    appropriate use criteria.''.
    (2) Conforming amendment.--Section 1833(t)(16) of the Social
    Security Act (42 U.S.C. 1395l(t)(16)) is amended by adding at
    the end the following new subparagraph:
    ``(E) Application of appropriate use criteria for
    certain imaging services.--For provisions relating to
    the application of appropriate use criteria for certain
    imaging services, see section 1834(q).''.
    (3) Report on experience of imaging appropriate use criteria
    program.--Not later than 18 months after the date of the
    enactment of this Act, the Comptroller General of the United
    States shall submit to Congress a report that includes

    [[Page 1070]]

    a description of the extent to which appropriate use criteria
    could be used for other services under part B of title XVIII of
    the Social Security Act (42 U.S.C. 1395j et seq.), such as
    radiation therapy and clinical diagnostic laboratory services.
    SEC. 219. USING FUNDING FROM TRANSITIONAL FUND FOR SUSTAINABLE
    GROWTH RATE (SGR) REFORM.

    Section 1898(b)(1) of the Social Security Act (42 U.S.C.
    1395iii(b)(1)) is amended by striking ``$2,300,000,000'' and inserting
    ``$0''.
    SEC. 220. ENSURING ACCURATE VALUATION OF SERVICES UNDER THE
    PHYSICIAN FEE SCHEDULE.

    (a) Authority To Collect and Use Information on Physicians' Services
    in the Determination of Relative Values.--
    (1) 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) Authority to collect and use information on
    physicians' services in the determination of relative
    values.--
    ``(i) Collection of information.--
    Notwithstanding any other provision of law, the
    Secretary may collect or obtain information on the
    resources directly or indirectly related to
    furnishing services for which payment is made
    under the fee schedule established under
    subsection (b). Such information may be collected
    or obtained from any eligible professional or any
    other source.
    ``(ii) Use of information.--Notwithstanding
    any other provision of law, subject to clause (v),
    the Secretary may (as the Secretary determines
    appropriate) use information collected or obtained
    pursuant to clause (i) in the determination of
    relative values for services under this section.
    ``(iii) Types of information.--The types of
    information described in clauses (i) and (ii) may,
    at the Secretary's discretion, include any or all
    of the following:
    ``(I) Time involved in furnishing
    services.
    ``(II) Amounts and types of practice
    expense inputs involved with furnishing
    services.
    ``(III) Prices (net of any
    discounts) for practice expense inputs,
    which may include paid invoice prices or
    other documentation or records.
    ``(IV) Overhead and accounting
    information for practices of physicians
    and other suppliers.
    ``(V) Any other element that would
    improve the valuation of services under
    this section.
    ``(iv) Information collection mechanisms.--
    Information may be collected or obtained pursuant
    to this subparagraph from any or all of the
    following:
    ``(I) Surveys of physicians, other
    suppliers, providers of services,
    manufacturers, and vendors.
    ``(II) Surgical logs, billing
    systems, or other practice or facility
    records.
    ``(III) Electronic health records.

    [[Page 1071]]

    ``(IV) Any other mechanism
    determined appropriate by the Secretary.
    ``(v) Transparency of use of information.--
    ``(I) <>
    In general.--Subject to subclauses (II)
    and (III), if the Secretary uses
    information collected or obtained under
    this subparagraph in the determination
    of relative values under this
    subsection, the Secretary shall disclose
    the information source and discuss the
    use of such information in such
    determination of relative values through
    notice and comment rulemaking.
    ``(II) Thresholds for use.--The
    Secretary may establish thresholds in
    order to use such information, including
    the exclusion of information collected
    or obtained from eligible professionals
    who use very high resources (as
    determined by the Secretary) in
    furnishing a service.
    ``(III) Disclosure of information.--
    The Secretary shall make aggregate
    information available under this
    subparagraph but shall not disclose
    information in a form or manner that
    identifies an eligible professional or a
    group practice, or information collected
    or obtained pursuant to a nondisclosure
    agreement.
    ``(vi) Incentive to participate.--The
    Secretary may provide for such payments under this
    part to an eligible professional that submits such
    solicited information under this subparagraph as
    the Secretary determines appropriate in order to
    compensate such eligible professional for such
    submission. Such payments shall be provided in a
    form and manner specified by the Secretary.
    ``(vii) Administration.--Chapter 35 of title
    44, United States Code, shall not apply to
    information collected or obtained under this
    subparagraph.
    ``(viii) Definition of eligible
    professional.--In this subparagraph, the term
    `eligible professional' has the meaning given such
    term in subsection (k)(3)(B).
    ``(ix) Funding.--For purposes of carrying out
    this subparagraph, 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
    $2,000,000 to the Centers for Medicare & Medicaid
    Services Program Management Account for each
    fiscal year beginning with fiscal year 2014.
    Amounts transferred under the preceding sentence
    for a fiscal year shall be available until
    expended.''.
    (2) Limitation on review.--Section 1848(i)(1) of the Social
    Security Act (42 U.S.C. 1395w-4(i)(1)) is amended--
    (A) in subparagraph (D), by striking ``and'' at the
    end;
    (B) in subparagraph (E), by striking the period at
    the end and inserting ``, and''; and
    (C) by adding at the end the following new
    subparagraph:
    ``(F) the collection and use of information in the
    determination of relative values under subsection
    (c)(2)(M).''.

    [[Page 1072]]

    (b) Authority for Alternative Approaches To Establishing Practice
    Expense Relative Values.--Section 1848(c)(2) of the Social Security Act
    (42 U.S.C. 1395w-4(c)(2)), as amended by subsection (a), is amended by
    adding at the end the following new subparagraph:
    ``(N) Authority for alternative approaches to
    establishing practice expense relative values.--The
    Secretary may establish or adjust practice expense
    relative values under this subsection using cost,
    charge, or other data from suppliers or providers of
    services, including information collected or obtained
    under subparagraph (M).''.

    (c) Revised and Expanded Identification of Potentially Misvalued
    Codes.--Section 1848(c)(2)(K)(ii) of the Social Security Act (42 U.S.C.
    1395w-4(c)(2)(K)(ii)) is amended to read as follows:
    ``(ii) Identification of potentially misvalued
    codes.--For purposes of identifying potentially
    misvalued codes pursuant to clause (i)(I), the
    Secretary shall examine codes (and families of
    codes as appropriate) based on any or all of the
    following criteria:
    ``(I) Codes that have experienced
    the fastest growth.
    ``(II) Codes that have experienced
    substantial changes in practice
    expenses.
    ``(III) Codes that describe new
    technologies or services within an
    appropriate time period (such as 3
    years) after the relative values are
    initially established for such codes.
    ``(IV) Codes which are multiple
    codes that are frequently billed in
    conjunction with furnishing a single
    service.
    ``(V) Codes with low relative
    values, particularly those that are
    often billed multiple times for a single
    treatment.
    ``(VI) Codes that have not been
    subject to review since implementation
    of the fee schedule.
    ``(VII) Codes that account for the
    majority of spending under the physician
    fee schedule.
    ``(VIII) Codes for services that
    have experienced a substantial change in
    the hospital length of stay or procedure
    time.
    ``(IX) Codes for which there may be
    a change in the typical site of service
    since the code was last valued.
    ``(X) Codes for which there is a
    significant difference in payment for
    the same service between different sites
    of service.
    ``(XI) Codes for which there may be
    anomalies in relative values within a
    family of codes.
    ``(XII) Codes for services where
    there may be efficiencies when a service
    is furnished at the same time as other
    services.
    ``(XIII) Codes with high intra-
    service work per unit of time.
    ``(XIV) Codes with high practice
    expense relative value units.
    ``(XV) Codes with high cost
    supplies.

    [[Page 1073]]

    ``(XVI) Codes as determined
    appropriate by the Secretary.''.

    (d) Target for Relative Value Adjustments for Misvalued Services.--
    (1) In general.--Section 1848(c)(2) of the Social Security
    Act (42 U.S.C. 1395w-4(c)(2)), as amended by subsections (a) and
    (b), is amended by adding at the end the following new
    subparagraph:
    ``(O) Target for relative value adjustments for
    misvalued services.--With respect
    to <> fee schedules established
    for each of 2017 through 2020, the following shall
    apply:
    ``(i) Determination of net reduction in
    expenditures.--For each year, the Secretary shall
    determine the estimated net reduction in
    expenditures under the fee schedule under this
    section with respect to the year as a result of
    adjustments to the relative values established
    under this paragraph for misvalued codes.
    ``(ii) Budget neutral redistribution of funds
    if target met and counting overages towards the
    target for the succeeding year.--If the estimated
    net reduction in expenditures determined under
    clause (i) for the year is equal to or greater
    than the target for the year--
    ``(I) reduced expenditures
    attributable to such adjustments shall
    be redistributed for the year in a
    budget neutral manner in accordance with
    subparagraph (B)(ii)(II); and
    ``(II) the amount by which such
    reduced expenditures exceeds the target
    for the year shall be treated as a
    reduction in expenditures described in
    clause (i) for the succeeding year, for
    purposes of determining whether the
    target has or has not been met under
    this subparagraph with respect to that
    year.
    ``(iii) Exemption from budget neutrality if
    target not met.--If the estimated net reduction in
    expenditures determined under clause (i) for the
    year is less than the target for the year, reduced
    expenditures in an amount equal to the target
    recapture amount shall not be taken into account
    in applying subparagraph (B)(ii)(II) with respect
    to fee schedules beginning with 2017.
    ``(iv) Target recapture amount.--For purposes
    of clause (iii), the target recapture amount is,
    with respect to a year, an amount equal to the
    difference between--
    ``(I) the target for the year; and
    ``(II) the estimated net reduction
    in expenditures determined under clause
    (i) for the year.
    ``(v) Target.--For purposes of this
    subparagraph, with respect to a year, the target
    is calculated as 0.5 percent of the estimated
    amount of expenditures under the fee schedule
    under this section for the year.''.
    (2) Conforming amendment.--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:

    [[Page 1074]]

    ``(VIII) Reductions for misvalued
    services if target not met.--Effective
    for <> fee schedules beginning with
    2017, reduced expenditures attributable
    to the application of the target
    recapture amount described in
    subparagraph (O)(iii).''.

    (e) Phase-In of Significant Relative Value Unit (RVU) Reductions.--
    (1) In general.--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:
    ``(7) Phase-in of significant relative value unit (rvu)
    reductions.--Effective for <> fee
    schedules established beginning with 2017, for services that are
    not new or revised codes, if the total relative value units for
    a service for a year would otherwise be decreased by an
    estimated amount equal to or greater than 20 percent as compared
    to the total relative value units for the previous year, the
    applicable adjustments in work, practice expense, and
    malpractice relative value units shall be phased-in over a 2-
    year period.''.
    (2) Conforming amendments.--Section 1848(c)(2) of the Social
    Security Act (42 U.S.C. 1395w-4(c)(2)) is amended--
    (A) in subparagraph (B)(ii)(I), by striking
    ``subclause (II)'' and inserting ``subclause (II) and
    paragraph (7)''; and
    (B) in subparagraph (K)(iii)(VI)--
    (i) by striking ``provisions of subparagraph
    (B)(ii)(II)'' and inserting ``provisions of
    subparagraph (B)(ii)(II) and paragraph (7)''; and
    (ii) by striking ``under subparagraph
    (B)(ii)(II)'' and inserting ``under subparagraph
    (B)(ii)(I)''.

    (f) Authority To Smooth Relative Values Within Groups of Services.--
    Section 1848(c)(2)(C) of the Social Security Act (42 U.S.C. 1395w-
    4(c)(2)(C)) is amended--
    (1) in each of clauses (i) and (iii), by striking ``the
    service'' and inserting ``the service or group of services''
    each place it appears; and
    (2) in the first sentence of clause (ii), by inserting ``or
    group of services'' before the period.

    (g) GAO Study and Report on Relative Value Scale Update Committee.--
    (1) <>  Study.--The Comptroller
    General of the United States (in this subsection referred to as
    the ``Comptroller General'') shall conduct a study of the
    processes used by the Relative Value Scale Update Committee
    (RUC) to provide recommendations to the Secretary of Health and
    Human Services regarding relative values for specific services
    under the Medicare physician fee schedule under section 1848 of
    the Social Security Act (42 U.S.C. 1395w-4).
    (2) Report.--Not later than 1 year after the date of the
    enactment of this Act, the Comptroller General shall submit to
    Congress a report containing the results of the study conducted
    under paragraph (1).

    (h) 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.--

    [[Page 1075]]

    ``(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.

    [[Page 1076]]

    ``(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''.

    (i) <>  Disclosure
    of Data Used To Establish Multiple Procedure Payment Reduction Policy.--
    The Secretary of Health and Human Services shall make publicly available
    the information 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. 221. MEDICAID DSH.

    (a) Modifications of Reductions to Allotments.--Section 1923(f) of
    the Social Security Act (42 U.S.C. 1396r-4(f)) is amended--
    (1) in paragraph (7)(A)--
    (A) in clause (i), by striking ``2016 through 2020''
    and inserting ``2017 through 2024''; and
    (B) in clause (ii), by striking subclauses (I)
    through (IV), and inserting the following:
    ``(I) $1,800,000,000 for fiscal year
    2017;
    ``(II) $4,700,000,000 for fiscal
    year 2018;
    ``(III) $4,700,000,000 for fiscal
    year 2019;
    ``(IV) $4,700,000,000 for fiscal
    year 2020;
    ``(V) $4,800,000,000 for fiscal year
    2021;
    ``(VI) $5,000,000,000 for fiscal
    year 2022;
    ``(VII) $5,000,000,000 for fiscal
    year 2023; and
    ``(VIII) $4,400,000,000 for fiscal
    year 2024.''; and
    (2) by striking paragraph (8) and inserting the following:
    ``(8) Calculation of DSH allotments after reductions
    period.--The DSH allotment for a State for fiscal years after
    fiscal year 2024 shall be calculated under paragraph (3) without
    regard to paragraph (7).''.

    (b) MACPAC Review and Report.--Section 1900(b)(6) of the Social
    Security Act (42 U.S.C. 1396(b)(6)) is amended--
    (1) by striking ``MACPAC shall consult'' and inserting the
    following:
    ``(A) In general.--MACPAC shall consult''; and
    (2) by adding at the end the following:
    ``(B) Review and reports regarding medicaid dsh.--
    ``(i) In general.--MACPAC shall review and
    submit an annual report to Congress on
    disproportionate share hospital payments under
    section 1923. Each report shall include the
    information specified in clause (ii).
    ``(ii) Required report information.--Each
    report required under this subparagraph shall
    include the following:

    [[Page 1077]]

    ``(I) Data relating to changes in
    the number of uninsured individuals.
    ``(II) Data relating to the amount
    and sources of hospitals' uncompensated
    care costs, including the amount of such
    costs that are the result of providing
    unreimbursed or under-reimbursed
    services, charity care, or bad debt.
    ``(III) Data identifying hospitals
    with high levels of uncompensated care
    that also provide access to essential
    community services for low-income,
    uninsured, and vulnerable populations,
    such as graduate medical education, and
    the continuum of primary through
    quarternary care, including the
    provision of trauma care and public
    health services.
    ``(IV) State-specific analyses
    regarding the relationship between the
    most recent State DSH allotment and the
    projected State DSH allotment for the
    succeeding year and the data reported
    under subclauses (I), (II), and (III)
    for the State.
    ``(iii) Data.--Notwithstanding any other
    provision of law, the Secretary regularly shall
    provide MACPAC with the most recent State reports
    and most recent independent certified audits
    submitted under section 1923(j), cost reports
    submitted under title XVIII, and such other data
    as MACPAC may request for purposes of conducting
    the reviews and preparing and submitting the
    annual reports required under this subparagraph.
    ``(iv) Submission deadlines.--The first report
    required under this subparagraph shall be
    submitted to Congress not later than February 1,
    2016. Subsequent reports shall be submitted as
    part of, or with, each annual report required
    under paragraph (1)(C) during the period of fiscal
    years 2017 through 2024.''.
    SEC. 222. REALIGNMENT OF THE MEDICARE SEQUESTER FOR FISCAL YEAR
    2024.

    Paragraph (6) (relating to implementing direct spending reductions)
    of section 251A of the Balanced Budget and Emergency Deficit Control Act
    of 1985 (2 U.S.C. 901a) is amended by adding at the end the following
    new subparagraph:
    ``(D) <>  Notwithstanding the 2
    percent limit specified in subparagraph (A) for payments for the
    Medicare programs specified in section 256(d), the sequestration
    order of the President under such subparagraph for fiscal year
    2024 shall be applied to such payments so that--
    ``(i) with respect to the first 6 months in which
    such order is effective for such fiscal year, the
    payment reduction shall be 4.0 percent; and
    ``(ii) with respect to the second 6 months in which
    such order is so effective for such fiscal year, the
    payment reduction shall be 0.0 percent.''.
    SEC. 223. <>  DEMONSTRATION PROGRAMS TO
    IMPROVE COMMUNITY MENTAL HEALTH SERVICES.

    (a) Criteria for Certified Community Behavioral Health Clinics To
    Participate in Demonstration Programs.--

    [[Page 1078]]

    (1) <>  Publication.--Not later than
    September 1, 2015, the Secretary shall publish criteria for a
    clinic to be certified by a State as a certified community
    behavioral health clinic for purposes of participating in a
    demonstration program conducted under subsection (d).
    (2) Requirements.--The criteria published under this
    subsection shall include criteria with respect to the following:
    (A) Staffing.--Staffing requirements, including
    criteria that staff have diverse disciplinary
    backgrounds, have necessary State-required license and
    accreditation, and are culturally and linguistically
    trained to serve the needs of the clinic's patient
    population.
    (B) Availability and accessibility of services.--
    Availability and accessibility of services, including
    crisis management services that are available and
    accessible 24 hours a day, the use of a sliding scale
    for payment, and no rejection for services or limiting
    of services on the basis of a patient's ability to pay
    or a place of residence.
    (C) Care coordination.--Care coordination, including
    requirements to coordinate care across settings and
    providers to ensure seamless transitions for patients
    across the full spectrum of health services including
    acute, chronic, and behavioral health needs. Care
    coordination requirements shall include partnerships or
    formal contracts with the following:
    (i) Federally-qualified health centers (and as
    applicable, rural health clinics) to provide
    Federally-qualified health center services (and as
    applicable, rural health clinic services) to the
    extent such services are not provided directly
    through the certified community behavioral health
    clinic.
    (ii) Inpatient psychiatric facilities and
    substance use detoxification, post-detoxification
    step-down services, and residential programs.
    (iii) Other community or regional services,
    supports, and providers, including schools, child
    welfare agencies, juvenile and criminal justice
    agencies and facilities, Indian Health Service
    youth regional treatment centers, State licensed
    and nationally accredited child placing agencies
    for therapeutic foster care service, and other
    social and human services.
    (iv) Department of Veterans Affairs medical
    centers, independent outpatient clinics, drop-in
    centers, and other facilities of the Department as
    defined in section 1801 of title 38, United States
    Code.
    (v) Inpatient acute care hospitals and
    hospital outpatient clinics.
    (D) Scope of services.--Provision (in a manner
    reflecting person-centered care) of the following
    services which, if not available directly through the
    certified community behavioral health clinic, are
    provided or referred through formal relationships with
    other providers:
    (i) Crisis mental health services, including
    24-hour mobile crisis teams, emergency crisis
    intervention services, and crisis stabilization.
    (ii) Screening, assessment, and diagnosis,
    including risk assessment.

    [[Page 1079]]

    (iii) Patient-centered treatment planning or
    similar processes, including risk assessment and
    crisis planning.
    (iv) Outpatient mental health and substance
    use services.
    (v) Outpatient clinic primary care screening
    and monitoring of key health indicators and health
    risk.
    (vi) Targeted case management.
    (vii) Psychiatric rehabilitation services.
    (viii) Peer support and counselor services and
    family supports.
    (ix) Intensive, community-based mental health
    care for members of the armed forces and veterans,
    particularly those members and veterans located in
    rural areas, provided the care is consistent with
    minimum clinical mental health guidelines
    promulgated by the Veterans Health Administration
    including clinical guidelines contained in the
    Uniform Mental Health Services Handbook of such
    Administration.
    (E) Quality and other reporting.--Reporting of
    encounter data, clinical outcomes data, quality data,
    and such other data as the Secretary requires.
    (F) Organizational authority.--Criteria that a
    clinic be a non-profit or part of a local government
    behavioral health authority or operated under the
    authority of the Indian Health Service, an Indian tribe
    or tribal organization pursuant to a contract, grant,
    cooperative agreement, or compact with the Indian Health
    Service pursuant to the Indian Self-Determination Act
    (25 U.S.C. 450 et seq.), or an urban Indian organization
    pursuant to a grant or contract with the Indian Health
    Service under title V of the Indian Health Care
    Improvement Act (25 U.S.C. 1601 et seq.).

    (b) Guidance on Development of Prospective Payment System for
    Testing Under Demonstration Programs.--
    (1) <>  In general.--Not
    later than September 1, 2015, the Secretary, through the
    Administrator of the Centers for Medicare & Medicaid Services,
    shall issue guidance for the establishment of a prospective
    payment system that shall only apply to medical assistance for
    mental health services furnished by a certified community
    behavioral health clinic participating in a demonstration
    program under subsection (d).
    (2) Requirements.--The guidance issued by the Secretary
    under paragraph (1) shall provide that--
    (A) no payment shall be made for inpatient care,
    residential treatment, room and board expenses, or any
    other non-ambulatory services, as determined by the
    Secretary; and
    (B) no payment shall be made to satellite facilities
    of certified community behavioral health clinics if such
    facilities are established after the date of enactment
    of this Act.

    (c) Planning Grants.--
    (1) <>  In general.--Not later than January
    1, 2016, the Secretary shall award planning grants to States for
    the purpose of developing proposals to participate in time-
    limited demonstration programs described in subsection (d).

    [[Page 1080]]

    (2) Use of funds.--A State awarded a planning grant under
    this subsection shall--
    (A) solicit input with respect to the development of
    such a demonstration program from patients, providers,
    and other stakeholders;
    (B) <>  certify clinics as
    certified community behavioral health clinics for
    purposes of participating in a demonstration program
    conducted under subsection (d); and
    (C) establish a prospective payment system for
    mental health services furnished by a certified
    community behavioral health clinic participating in a
    demonstration program under subsection (d) in accordance
    with the guidance issued under subsection (b).

    (d) Demonstration Programs.--
    (1) <>  In general.--Not later than
    September 1, 2017, the Secretary shall select States to
    participate in demonstration programs that are developed through
    planning grants awarded under subsection (c), meet the
    requirements of this subsection, and represent a diverse
    selection of geographic areas, including rural and underserved
    areas.
    (2) Application requirements.--
    (A) In general.--The Secretary shall solicit
    applications to participate in demonstration programs
    under this subsection solely from States awarded
    planning grants under subsection (c).
    (B) Required information.--An application for a
    demonstration program under this subsection shall
    include the following:
    (i) The target Medicaid population to be
    served under the demonstration program.
    (ii) A list of participating certified
    community behavioral health clinics.
    (iii) Verification that the State has
    certified a participating clinic as a certified
    community behavioral health clinic in accordance
    with the requirements of subsection (b).
    (iv) A description of the scope of the mental
    health services available under the State Medicaid
    program that will be paid for under the
    prospective payment system tested in the
    demonstration program.
    (v) Verification that the State has agreed to
    pay for such services at the rate established
    under the prospective payment system.
    (vi) Such other information as the Secretary
    may require relating to the demonstration program
    including with respect to determining the
    soundness of the proposed prospective payment
    system.
    (3) Number and length of demonstration programs.--Not more
    than 8 States shall be selected for 2-year demonstration
    programs under this subsection.
    (4) Requirements for selecting demonstration programs.--
    (A) In general.--The Secretary shall give preference
    to selecting demonstration programs where participating
    certified community behavioral health clinics--
    (i) provide the most complete scope of
    services described in subsection (a)(2)(D) to
    individuals eligible

    [[Page 1081]]

    for medical assistance under the State Medicaid
    program;
    (ii) will improve availability of, access to,
    and participation in, services described in
    subsection (a)(2)(D) to individuals eligible for
    medical assistance under the State Medicaid
    program;
    (iii) will improve availability of, access to,
    and participation in assisted outpatient mental
    health treatment in the State; or
    (iv) demonstrate the potential to expand
    available mental health services in a
    demonstration area and increase the quality of
    such services without increasing net Federal
    spending.
    (5) Payment for medical assistance for mental health
    services provided by certified community behavioral health
    clinics.--
    (A) In general.--The Secretary shall pay a State
    participating in a demonstration program under this
    subsection the Federal matching percentage specified in
    subparagraph (B) for amounts expended by the State to
    provide medical assistance for mental health services
    described in the demonstration program application in
    accordance with paragraph (2)(B)(iv) that are provided
    by certified community behavioral health clinics to
    individuals who are enrolled in the State Medicaid
    program. Payments to States made under this paragraph
    shall be considered to have been under, and are subject
    to the requirements of, section 1903 of the Social
    Security Act (42 U.S.C. 1396b).
    (B) Federal matching percentage.--The Federal
    matching percentage specified in this subparagraph is
    with respect to medical assistance described in
    subparagraph (A) that is furnished--
    (i) to a newly eligible individual described
    in paragraph (2) of section 1905(y) of the Social
    Security Act (42 U.S.C. 1396d(y)), the matching
    rate applicable under paragraph (1) of that
    section; and
    (ii) to an individual who is not a newly
    eligible individual (as so described) but who is
    eligible for medical assistance under the State
    Medicaid program, the enhanced FMAP applicable to
    the State.
    (C) Limitations.--
    (i) In general.--Payments shall be made under
    this paragraph to a State only for mental health
    services--
    (I) that are described in the
    demonstration program application in
    accordance with paragraph (2)(iv);
    (II) for which payment is available
    under the State Medicaid program; and
    (III) that are provided to an
    individual who is eligible for medical
    assistance under the State Medicaid
    program.
    (ii) Prohibited payments.--No payment shall be
    made under this paragraph--
    (I) for inpatient care, residential
    treatment, room and board expenses, or
    any other non-

    [[Page 1082]]

    ambulatory services, as determined by
    the Secretary; or
    (II) with respect to payments made
    to satellite facilities of certified
    community behavioral health clinics if
    such facilities are established after
    the date of enactment of this Act.
    (6) Waiver of statewideness requirement.--The Secretary
    shall waive section 1902(a)(1) of the Social Security Act (42
    U.S.C. 1396a(a)(1)) (relating to statewideness) as may be
    necessary to conduct demonstration programs in accordance with
    the requirements of this subsection.
    (7) Annual reports.--
    (A) In general.--Not later than 1 year after the
    date on which the first State is selected for a
    demonstration program under this subsection, and
    annually thereafter, the Secretary shall submit to
    Congress an annual report on the use of funds provided
    under all demonstration programs conducted under this
    subsection. Each such report shall include--
    (i) an assessment of access to community-based
    mental health services under the Medicaid program
    in the area or areas of a State targeted by a
    demonstration program compared to other areas of
    the State;
    (ii) an assessment of the quality and scope of
    services provided by certified community
    behavioral health clinics compared to community-
    based mental health services provided in States
    not participating in a demonstration program under
    this subsection and in areas of a demonstration
    State that are not participating in the
    demonstration program; and
    (iii) an assessment of the impact of the
    demonstration programs on the Federal and State
    costs of a full range of mental health services
    (including inpatient, emergency and ambulatory
    services).
    (B) Recommendations.--Not later than December 31,
    2021, the Secretary shall submit to Congress
    recommendations concerning whether the demonstration
    programs under this section should be continued,
    expanded, modified, or terminated.

    (e) Definitions.--In this section:
    (1) Federally-qualified health center services; federally-
    qualified health center; rural health clinic services; rural
    health clinic.--The terms ``Federally-qualified health center
    services'', ``Federally-qualified health center'', ``rural
    health clinic services'', and ``rural health clinic'' have the
    meanings given those terms in section 1905(l) of the Social
    Security Act (42 U.S.C. 1396d(l)).
    (2) Enhanced fmap.--The term ``enhanced FMAP'' has the
    meaning given that term in section 2105(b) of the Social
    Security Act (42 U.S.C. 1397dd(b)) but without regard to the
    second and third sentences of that section.
    (3) Secretary.--The term ``Secretary'' means the Secretary
    of Health and Human Services.
    (4) State.--The term ``State'' has the meaning given such
    term for purposes of title XIX of the Social Security Act (42
    U.S.C. 1396 et seq.).

    (f) Funding.--

    [[Page 1083]]

    (1) In general.--Out of any funds in the Treasury not
    otherwise appropriated, there is appropriated to the Secretary--
    (A) for purposes of carrying out subsections (a),
    (b), and (d)(7), $2,000,000 for fiscal year 2014; and
    (B) for purposes of awarding planning grants under
    subsection (c), $25,000,000 for fiscal year 2016.
    (2) Availability.--Funds appropriated under paragraph (1)
    shall remain available until expended.
    SEC. 224. <>  ASSISTED OUTPATIENT
    TREATMENT GRANT PROGRAM FOR INDIVIDUALS
    WITH SERIOUS MENTAL ILLNESS.

    (a) In General.--The Secretary shall establish a 4-year pilot
    program to award not more than 50 grants each year to eligible entities
    for assisted outpatient treatment programs for individuals with serious
    mental illness.
    (b) Consultation.--The Secretary shall carry out this section in
    consultation with the Director of the National Institute of Mental
    Health, the Attorney General of the United States, the Administrator of
    the Administration for Community Living, and the Administrator of the
    Substance Abuse and Mental Health Services Administration.
    (c) Selecting Among Applicants.--The Secretary--
    (1) may only award grants under this section to applicants
    that have not previously implemented an assisted outpatient
    treatment program; and
    (2) shall evaluate applicants based on their potential to
    reduce hospitalization, homelessness, incarceration, and
    interaction with the criminal justice system while improving the
    health and social outcomes of the patient.

    (d) Use of Grant.--An assisted outpatient treatment program funded
    with a grant awarded under this section shall include--
    (1) evaluating the medical and social needs of the patients
    who are participating in the program;
    (2) preparing and executing treatment plans for such
    patients that--
    (A) include criteria for completion of court-ordered
    treatment; and
    (B) provide for monitoring of the patient's
    compliance with the treatment plan, including compliance
    with medication and other treatment regimens;
    (3) providing for such patients case management services
    that support the treatment plan;
    (4) ensuring appropriate referrals to medical and social
    service providers;
    (5) evaluating the process for implementing the program to
    ensure consistency with the patient's needs and State law; and
    (6) measuring treatment outcomes, including health and
    social outcomes such as rates of incarceration, health care
    utilization, and homelessness.

    (e) Report.--Not later than the end of each of fiscal years 2016,
    2017, and 2018, the Secretary shall submit a report to the appropriate
    congressional committees on the grant program under this section.
    Each <>  such report shall include an evaluation of
    the following:

    [[Page 1084]]

    (1) Cost savings and public health outcomes such as
    mortality, suicide, substance abuse, hospitalization, and use of
    services.
    (2) Rates of incarceration by patients.
    (3) Rates of homelessness among patients.
    (4) Patient and family satisfaction with program
    participation.

    (f) Definitions.--In this section:
    (1) The term ``assisted outpatient treatment'' means
    medically prescribed mental health treatment that a patient
    receives while living in a community under the terms of a law
    authorizing a State or local court to order such treatment.
    (2) The term ``eligible entity'' means a county, city,
    mental health system, mental health court, or any other entity
    with authority under the law of the State in which the grantee
    is located to implement, monitor, and oversee assisted
    outpatient treatment programs.
    (3) The term ``Secretary'' means the Secretary of Health and
    Human Services.

    (g) Funding.--
    (1) <>  Amount of grants.--A grant
    under this section shall be in an amount that is not more than
    $1,000,000 for each of fiscal years 2015 through 2018. Subject
    to the preceding sentence, the Secretary shall determine the
    amount of each grant based on the population of the area,
    including estimated patients, to be served under the grant.
    (2) Authorization of appropriations.--There is authorized to
    be appropriated to carry out this section $15,000,000 for each
    of fiscal years 2015 through 2018.
    SEC. 225. EXCLUSION FROM PAYGO SCORECARDS.

    (a) Statutory Pay-As-You-Go Scorecards.--The budgetary effects of
    this Act shall not be entered on either PAYGO scorecard maintained
    pursuant to section 4(d) of the Statutory Pay-As-You-Go Act of 2010.
    (b) Senate PAYGO Scorecards.--The budgetary effects of this Act
    shall not be entered on any PAYGO scorecard maintained for purposes of
    section 201 of S. Con. Res. 21 (110th Congress).

    Approved April 1, 2014.

    LEGISLATIVE HISTORY--H.R. 4302:
    ---------------------------------------------------------------------------

    CONGRESSIONAL RECORD, Vol. 160 (2014):
    Mar. 27, considered and passed House.
    Mar. 31, considered and passed Senate.