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115th Congress } { Rept. 115-480
HOUSE OF REPRESENTATIVES
1st Session } { Part 1
======================================================================
INCREASING TELEHEALTH ACCESS IN MEDICARE ACT
_______
December 21, 2017.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______
Mr. Brady of Texas, from the Committee on Ways and Means, submitted the
following
R E P O R T
[To accompany H.R. 3727]
[Including cost estimate of the Congressional Budget Office]
The Committee on Ways and Means, to whom was referred the
bill (H.R. 3727) to amend title XVIII of the Social Security
Act to include additional telehealth services for purposes of
MA organization bids, and for other purposes, having considered
the same, report favorably thereon with an amendment and
recommend that the bill as amended do pass.
CONTENTS
Page
I. SUMMARY AND BACKGROUND...........................................3
A. Purpose and Summary................................. 3
B. Background and Need for Legislation................. 3
C. Legislative History................................. 4
II. EXPLANATION OF THE BILL..........................................4
A. The Increasing Telehealth Access in Medicare Act.... 4
III. VOTES OF THE COMMITTEE...........................................5
IV. BUDGET EFFECTS OF THE BILL.......................................5
A. Committee Estimate of Budgetary Effects............. 5
B. Statement Regarding New Budget Authority and Tax
Expenditures Budget Authority...................... 6
C. Cost Estimate Prepared by the Congressional Budget
Office............................................. 6
V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE.......8
A. Committee Oversight Findings and Recommendations.... 8
B. Statement of General Performance Goals and
Objectives......................................... 8
C. Information Relating to Unfunded Mandates........... 8
D. Congressional Earmarks, Limited Tax Benefits, and
Limited Tariff Benefits............................ 9
E. Duplication of Federal Programs..................... 9
F. Disclosure of Directed Rule Makings................. 9
VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED............9
VII. EXCHANGES OF LETTERS WITH ADDITIONAL COMMITTEES OF REFERRAL....137
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Increasing Telehealth Access in
Medicare Act'' or the ``ITAM Act''.
SEC. 2. INCLUSION OF ADDITIONAL TELEHEALTH SERVICES IN MEDICARE
ADVANTAGE ORGANIZATION BIDS.
(a) In General.--Section 1852 of the Social Security Act (42 U.S.C.
1395w-22) is amended--
(1) in subsection (a)(1)(B)(i), by adding at the end the
following new sentence: ``For plan year 2020 and each
subsequent plan year, for purposes of subsection (m) and
section 1854, in the case that an MA plan makes an election
described in subsection (m)(1) with respect to such plan year,
additional telehealth services shall be treated as a benefit
under the original medicare fee-for-service program option with
respect to such plan and plan year.''; and
(2) by adding at the end the following new subsection:
``(m) Provision of Additional Telehealth Services.--
``(1) MA plan option.--For purposes of subsection
(a)(1)(B)(i), an election described in this paragraph, with
respect to an MA plan and plan year, is an election by the
sponsor of such plan to provide under the plan for such plan
year, in accordance with the subsequent provisions of this
subsection, additional telehealth services (as defined in
paragraph (2)) as a benefit under the original medicare fee-
for-service program option. Such additional telehealth
services, with respect to a plan year, shall be in addition to
benefits included under the original medicare fee-for-service
program option for such year.
``(2) Additional telehealth services defined.--
``(A) In general.--For purposes of this subsection
and section 1854, the term `additional telehealth
services' means, subject to subparagraph (C), services,
with respect to a year--
``(i) for which payment may be made under
part B (without regard to application of
section 1834(m));
``(ii) that, if furnished via a
telecommunications system, would not be payable
under section 1834(m);
``(iii) furnished using electronic
information and telecommunications technology;
``(iv) furnished in accordance with such
requirements as the Secretary specifies
pursuant to paragraph (3); and
``(v) which are identified for such year by
the Secretary as appropriate to furnish using
electronic information and telecommunications
technology where a physician (as defined in
section 1861(r)) or practitioner (described in
section 1842(b)(18)(C)) furnishing the service
is not at the same location as the plan
enrollee.
``(B) Flexibility for phasing in identifications.--In
making identifications under subparagraph (A)(v), the
Secretary shall make such identifications annually and
may make such identifications in a manner that results
in additional telehealth services being phased in, as
determined appropriate by the Secretary.
``(C) Exclusion of capital and infrastructure costs
and investments.--For purposes of this subsection and
section 1854, the term `additional telehealth services'
does not include capital and infrastructure costs and
investments relating to such benefits provided pursuant
to this subsection.
``(3) Requirements for additional telehealth services.--The
Secretary shall specify requirements for the provision of
additional telehealth services with respect to--
``(A) qualifications (other than licensure) of
physicians and practitioners who furnish such services;
``(B) the technology used in furnishing such
services;
``(C) factors necessary for coordination of
additional telehealth services with other services; and
``(D) such other criteria (such as clinical criteria)
as determined by the Secretary.
``(4) Enrollee choice.--An MA plan that provides a service as
an additional telehealth service may not, when furnished
without use of electronic information and telecommunications
technology, deny access to the equivalent in-person service.
``(5) Construction.--
``(A) In general.--In determining if an MA
organization or MA plan, as applicable, is in
compliance with each requirement specified in
subparagraph (B), such determination shall be made
without regard to any additional telehealth services
covered by the plan offered by such organization or
plan pursuant to this subsection.
``(B) Requirements specified.--The requirements
specified in this subparagraph are the following:
``(i) The requirements under subsection (d).
``(ii) The requirement under subsection
(a)(1) with respect to covering benefits under
the original medicare fee-for-service program
option, as defined in the first sentence of
paragraph (B)(i) of such subsection.''.
(b) Inclusion of Additional Telehealth Services in MA Organization
Bid Amount.--Section 1854(a)(6)(A)(ii)(I) of the Social Security Act
(42 U.S.C. 1395w-24(a)(6)(A)(ii)(I)) is amended by inserting ``,
including, for plan year 2020 and subsequent plan years, the provision
of such benefits through the use of additional telehealth services
under section 1852(m)'' before the semicolon at the end.
SEC. 3. USE OF TELECOMMUNICATIONS SYSTEMS IN FURNISHING CHRONIC CARE
MANAGEMENT SERVICES.
Section 1848(b)(8) of the Social Security Act (42 U.S.C. 1395(b)(8))
is amended by adding at the end the following new subparagraph:
``(C) Clarification.--In carrying out this paragraph,
with respect to chronic care management services, the
Secretary may, subject to subparagraph (B), make
payment for such services furnished through the use of
secure messaging, Internet, store and forward
technologies, or other non-face-to-face communication
methods determined appropriate by the Secretary.''.
SEC. 4. SENSE OF CONGRESS REGARDING PARITY OF TELEHEALTH SERVICES.
It is the sense of Congress that there should be--
(1) parity, with respect to access to telehealth, between the
original medicare fee-for-service program under parts A and B
of title XVIII of the Social Security Act and the Medicare
Advantage program under part C of such title; and
(2) access to medically appropriate, quality telehealth for
all Medicare beneficiaries.
SEC. 5. DEPOSIT OF SAVINGS INTO MEDICARE IMPROVEMENT FUND.
Section 1898(b)(1) of the Social Security Act (42 U.S.C.
1395iii(b)(1)) is amended by striking ``during and after fiscal year
2021, $270,000,000'' and inserting ``during and after fiscal year 2021,
$325,000,000''.
I. SUMMARY AND BACKGROUND
A. Purpose and Summary
The bill, H.R. 3727, the ``Increasing Telehealth Access in
Medicare (``ITAM'') Act,'' as ordered reported by the Committee
on Ways and Means on September 13, 2017, amends title XVIII of
the Social Security Act to include additional telehealth
services for purposes of Medicare Advantage (``MA'')
organizations bids.
B. Background and Need for Legislation
On September 11, 2017, Representative Black (R-TN) and
Representative Thompson (D-CA) introduced H.R. 3727,
legislation to expand the use of telehealth services in MA by
allowing these services to be included as a basic benefit,
rather than a supplemental benefit, which is current practice.
C. Legislative History
Background
H.R. 3727 was introduced on September 11, 2017, and was
referred to the Committee on Ways and Means and additionally to
the Committee on Energy and Commerce.
Committee hearings
On June 8, 2017, the Committee held a hearing on The
Department of Health and Human Services' Fiscal Year 2018
Budget Request, in which increasing Medicare access to
telehealth was discussed.
On September 14, 2016, the Subcommittee on Health held a
Hearing on Exploring the Use of Technology and Innovation to
Create Efficiencies and Higher Quality in Health Care, in which
telehealth was a focus.
On June 8, 2016, the Subcommittee on Health held a Member
Day hearing on various proposals to make improvements to
Medicare, including expanded delivery of telehealth services.
Committee action
The Committee on Ways and Means marked up H.R. 3727, the
Increasing Telehealth Access in Medicare (``ITAM'') Act, on
September 13, 2017, and ordered the bill, as amended, favorably
reported (with a quorum being present).
II. EXPLANATION OF THE BILL
A. The Increasing Telehealth Access in Medicare Act
PRESENT LAW
Under current law, MA plans annually submit bids to the
Secretary of Health and Human Services (``HHS'') detailing the
estimated cost of providing healthcare services to Medicare
beneficiaries. At present, certain telehealth services cannot
be included as part of the plan's bid. Those that are not
included under the bid may only be provided as a supplemental
benefit if approved by the Secretary. Supplemental benefits may
be paid for by the difference between the bid and the Medicare-
established benchmark but MA plans may also charge additional
premiums to offer a greater number of supplemental benefits.
REASONS FOR CHANGE
Medicare beneficiaries are currently limited in their
ability to utilize telehealth services outside of certain
allowable services, particularly in rural areas. This
legislation would allow for greater access to telehealth
services that could replace certain face-to-face services (e.g.
remote monitoring following certain medical episodes rather
than coming back to a provider office repeatedly). This change
offers convenience and access to the beneficiary, increases
efficiencies for providers and the Medicare program, while
preserving quality of care.
EXPLANATION OF PROVISIONS
Section 2 of H.R. 3727 allows organizations to include
additional telehealth services as part of their annual bid as
opposed to a supplemental benefit, which is current practice.
Additional telehealth services are defined under this section
as services furnished using electronic information and
telecommunications technology when a physician or practitioner
providing the services is not in the same location as the
beneficiary. The Secretary is required to specify the
requirements for the technology used to furnish the additional
telehealth services, as well as the training or qualifications
of the physician or practitioner, and factors necessary for the
coordination of care. Additional telehealth services are not to
be used to meet access to care requirements under Section
1852(d) and plans are prohibited from restricting beneficiary
access to the equivalent in-person service.
Section 3 of H.R. 3727 clarifies that services provided
under the chronic care management code in the physician fee
schedule can be provided through telehealth as well as face-to-
face visitation.
Section 4 of H.R. 3727 provides a sense of Congress that
there should be parity between Medicare fee-for-service and
Medicare Advantage with regard to delivery of the Medicare
benefit through telehealth. The sense of Congress further
expresses support for medically appropriate use of telehealth
services in the Medicare program, regardless of model of care.
Section 5 of H.R. 3727 increases the amount of funding in
the Medicare Improvement Fund (``MIF'') available to the
Department of HHS through depositing the savings from the
policies contained in the legislation.
EFFECTIVE DATE
The legislation becomes effective beginning in plan year
2020 and subsequent plan years.
III. VOTES OF THE COMMITTEE
In compliance with clause 3(b) of rule XIII of the Rules of
the House of Representatives, the following statement is made
concerning the vote of the Committee on Ways and Means in its
consideration of H.R. 3727, the Increasing Telehealth Access in
Medicare Act, on September 13, 2017.
The Chairman's amendment in the nature of a substitute was
adopted by a voice vote (with a quorum being present).
The bill, H.R. 3727, was ordered favorably reported as
amended by voice vote (with a quorum being present).
IV. BUDGET EFFECTS OF THE BILL
A. Committee Estimate of Budgetary Effects
In compliance with clause 3(d) of rule XIII of the Rules of
the House of Representatives, the following statement is made
concerning the effects on the budget of the bill, H.R. 3727, as
reported. The Committee agrees with the estimate prepared by
the Congressional Budget Office (CBO), which is included below.
B. Statement Regarding New Budget Authority and Tax Expenditures Budget
Authority
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee states that the
bill involves no new or increased budget authority. The
Committee states further that the bill involves no new or
increased tax expenditures.
C. Cost Estimate Prepared by the Congressional Budget Office
In compliance with clause 3(c)(3) of rule XIII of the Rules
of the House of Representatives, requiring a cost estimate
prepared by the CBO, the following statement by CBO is
provided.
U.S. Congress,
Congressional Budget Office,
Washington, DC, September 22, 2017.
Hon. Kevin Brady,
Chairman, Committee on Ways and Means,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 3727, the
Increasing Telehealth Access in Medicare Act.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Lori Housman.
Sincerely,
Keith Hall,
Director.
Enclosure.
H.R. 3727--Increasing Telehealth Access in Medicare Act
Summary: H.R. 3727 would allow Medicare Advantage (MA)
plans to include the cost of providing telehealth services in
their bids and increase funding in the Medicare Improvement
Fund. CBO estimates that enacting H.R. 3727 would increase
direct spending by $46 million over the 2018-2022 period and
decrease direct spending by $4 million over the 2018-2027
period. Pay-as-you-go procedures apply because enacting H.R.
3727 would affect direct spending. Enacting the bill would not
affect revenues.
CBO estimates that enacting the legislation would not
increase net direct spending or on-budget deficits by more than
$5 billion in any of the four consecutive 10-year periods
beginning in 2028. The bill contains no intergovernmental or
private-sector mandates as defined in the Unfunded Mandates
Reform Act (UMRA).
Estimated cost to the Federal Government: The estimated
budgetary effect of H.R. 3727 is shown in the following table.
The effects of this legislation fall within budget function 570
(Medicare).
--------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
----------------------------------------------------------------------------------------------------------
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2017-2022 2017-2027
--------------------------------------------------------------------------------------------------------------------------------------------------------
INCREASES OR DECREASES (-) IN DIRECT SPENDING OUTLAYS
Telehealth Costs in Medicare Advantage Bids.. 0 0 0 -10 -10 -10 -10 -10 -10 -10 -10 -30 -80
Medicare Improvement Fund.................... 0 0 0 0 48 28 0 0 0 0 0 76 76
Total Changes............................ 0 0 0 -10 38 18 -10 -10 -10 -10 -10 46 -4
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: Budget authority is equal to outlays.
Basis of estimate: Telehealth costs in Medicare Advantage
bids: Under current law, MA plans may provide some telehealth
services as part of the standard benefit, mirroring what is
covered for beneficiaries enrolled in Medicare's fee-for-
service (FFS) program. However, if an MA plan wants to provide
telehealth services that go beyond what is covered in the FFS
program, the plan must receive approval to provide those
services as supplemental benefits and use its ``rebate'' to pay
for those services.\1\ H.R. 3727 would allow MA plans to
include the cost of additional telehealth services in their
bids for contracts that cover 2020 or subsequent years. The
costs included in the bid would not include capital or
infrastructure expenses. Telehealth services would not count
toward meeting network-adequacy requirements, and plans could
not use the availability of telehealth services to limit access
to in-person services.
---------------------------------------------------------------------------
\1\The rebate is a portion of the amount by which the ``benchmark''
amount for the geographic area covered by the plan exceeds the MA
plan's bid for services it is required to cover. The benchmark is based
on estimated spending per beneficiary in the fee-for-service sector in
that geographic area. The rebate portion is between 50 percent and 70
percent, based on the plan's score on certain measures of quality of
care. MA plans are required to use the rebate to pay for benefits not
covered in the fee-for-service sector.
---------------------------------------------------------------------------
Based on a review of the literature and discussions with
experts, CBO concluded that coverage of telehealth services by
private payers sometimes results in higher spending and
sometimes results in savings; in either case, the effects on
spending tend to be small. For MA plans that offer telehealth
services as supplemental benefits, this provision would
increase spending, because Medicare's payment would reflect the
full cost of those benefits instead of the 50 percent to 70
percent of the cost that is covered by the rebate. (The other
30 percent to 50 percent is covered by displacing other
supplemental benefits that would be attractive to potential
enrollees.)
In general, CBO expects that an MA plan that begins or
expands coverage of telehealth benefits under H.R. 3727 would
do so based on the plan's expectation that it could manage
telehealth services in a manner that would enable it to lower
its bid. Because coverage of telehealth benefits as a
supplemental benefit is very limited, CBO estimates that the
savings from plans that begin or expand telehealth services
would slightly exceed the increased cost for plans that already
offer telehealth services as a supplemental benefit. On net,
CBO estimates that enactment of this provision would reduce
direct spending by $80 million over the 2018-2027 period. CBO
assumes that H.R. 3727 will be enacted near the end of fiscal
year 2017.
Medicare Improvement Fund: H.R. 3727 would increase amounts
earmarked for making improvements to the Medicare fee-for-
service program during fiscal year 2021 by $76 million.
Pay-As-You-Go considerations: The Statutory Pay-As-You-Go
Act of 2010 establishes budget-reporting and enforcement
procedures for legislation affecting direct spending or
revenues. The net changes in outlays that are subject to those
pay-as-you-go procedures are shown in the following table.
CBO ESTIMATE OF PAY-AS-YOU-CO EFFECTS FOR H.R. 3727, AS ORDERED REPORTED BY THE SENATE COMMITTEE ON FINANCE ON MAY 18, 2017
--------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
----------------------------------------------------------------------------------------------------------
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2017-2022 2017-2027
--------------------------------------------------------------------------------------------------------------------------------------------------------
NET INCREASE OR DECREASE (-) IN THE DEFICIT
Statutory Pay-As-You-Go Impact............... 0 0 0 -10 38 18 -10 -10 -10 -10 -10 46 -4
--------------------------------------------------------------------------------------------------------------------------------------------------------
Increase in long-term direct spending and deficits: CBO
estimates that enacting the legislation would not increase net
direct spending or on-budget deficits by more than $5 billion
in any of the four consecutive 10-year periods beginning in
2028.
Intergovernmental and private-sector impact: H.R. 3727
contains no intergovernmental or private-sector mandates as
defined in UMRA.
Previous CBO estimate: On August 1, 2017, CBO transmitted
an estimate for the S. 870, Creating High-Quality Results and
Outcomes Necessary to Improve Chronic (CHRONIC) Care Act of
2017. The telehealth provision of H.R. 3727 is similar to
section 303 of S. 870, and the estimates for those provisions
are identical.
Estimate prepared by: Federal Costs: Lori Housman; Impact
on state, local, and tribal governments: Zachary Byrum; Impact
on the private sector: Amy Petz.
Estimate approved by: Theresa Gullo, Assistant Director for
Budget Analysis.
V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE
A. Committee Oversight Findings and Recommendations
With respect to clause 3(c)(1) of rule XIII of the Rules of
the House of Representatives, the Committee made findings and
recommendations that are reflected in this report.
B. Statement of General Performance Goals and Objectives
With respect to clause 3(c)(4) of rule XIII of the Rules of
the House of Representatives, the Committee advises that the
bill does not authorize funding, so no statement of general
performance goals and objectives is required.
C. Information Relating to Unfunded Mandates
This information is provided in accordance with section 423
of the Unfunded Mandates Reform Act of 1995 (Pub. L. No. 104-
4).
The Committee has determined that the bill does not contain
Federal mandates on the private sector. The Committee has
determined that the bill does not impose a Federal
intergovernmental mandate on State, local, or tribal
governments.
D. Congressional Earmarks, Limited Tax Benefits, and Limited Tariff
Benefits
With respect to clause 9 of rule XXI of the Rules of the
House of Representatives, the Committee has carefully reviewed
the provisions of the bill, and states that the provisions of
the bill do not contain any congressional earmarks, limited tax
benefits, or limited tariff benefits within the meaning of the
rule.
E. Duplication of Federal Programs
In compliance with clause 3(c)(5) of rule XIII of the Rules
of the House of Representatives, the Committee states that no
provision of the bill establishes or reauthorizes: (1) a
program of the Federal Government known to be duplicative of
another Federal program; (2) a program included in any report
from the Government Accountability Office to Congress pursuant
to section 21 of Public Law 111-139; or (3) a program related
to a program identified in the most recent Catalog of Federal
Domestic Assistance, published pursuant to the Federal Program
Information Act (Pub. L. No. 95-220, as amended by Pub. L. No.
98-169).
F. Disclosure of Directed Rule Makings
In compliance with Sec. 3(i) of H. Res. 5 (115th Congress),
the following statement is made concerning directed rule
makings:
The Committee advises that the bill requires no directed
rulemakings within the meaning of such section.
VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, and existing law in which no
change is proposed is show in roman):
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, and existing law in which no
change is proposed is shown in roman):
SOCIAL SECURITY ACT
* * * * * * *
TITLE XVIII--HEALTH INSURANCE FOR THE AGED AND DISABLED
* * * * * * *
Part B--Supplementary Medical Insurance Benefits for the Aged and
Disabled
* * * * * * *
PAYMENT FOR PHYSICIANS' SERVICES
Sec. 1848. (a) Payment Based on Fee Schedule.--
(1) In general.--Effective for all physicians'
services (as defined in subsection (j)(3)) furnished
under this part during a year (beginning with 1992) for
which payment is otherwise made on the basis of a
reasonable charge or on the basis of a fee schedule
under section 1834(b), payment under this part shall
instead be based on the lesser of--
(A) the actual charge for the service, or
(B) subject to the succeeding provisions of
this subsection, the amount determined under
the fee schedule established under subsection
(b) for services furnished during that year (in
this subsection referred to as the ``fee
schedule amount'').
(2) Transition to full fee schedule.--
(A) Limiting reductions and increases to 15
percent in 1992.--
(i) Limit on increase.--In the case
of a service in a fee schedule area (as
defined in subsection (j)(2)) for which
the adjusted historical payment basis
(as defined in subparagraph (D)) is
less than 85 percent of the fee
schedule amount for services furnished
in 1992, there shall be substituted for
the fee schedule amount an amount equal
to the adjusted historical payment
basis plus 15 percent of the fee
schedule amount otherwise established
(without regard to this paragraph).
(ii) Limit in reduction.--In the case
of a service in a fee schedule area for
which the adjusted historical payment
basis exceeds 115 percent of the fee
schedule amount for services furnished
in 1992, there shall be substituted for
the fee schedule amount an amount equal
to the adjusted historical payment
basis minus 15 percent of the fee
schedule amount otherwise established
(without regard to this paragraph).
(B) Special rule for 1993, 1994, and 1995.--
If a physicians' service in a fee schedule area
is subject to the provisions of subparagraph
(A) in 1992, for physicians' services furnished
in the area--
(i) during 1993, there shall be
substituted for the fee schedule amount
an amount equal to the sum of--
(I) 75 percent of the fee
schedule amount determined
under subparagraph (A),
adjusted by the update
established under subsection
(d)(3) for 1993, and
(II) 25 percent of the fee
schedule amount determined
under paragraph (1) for 1993
without regard to this
paragraph;
(ii) during 1994, there shall be
substituted for the fee schedule amount
an amount equal to the sum of--
(I) 67 percent of the fee
schedule amount determined
under clause (i), adjusted by
the update established under
subsection (d)(3) for 1994 and
as adjusted under subsection
(c)(2)(F)(ii) and under section
13515(b) of the Omnibus Budget
Reconciliation Act of 1993, and
(II) 33 percent of the fee
schedule amount determined
under paragraph (1) for 1994
without regard to this
paragraph; and
(iii) during 1995, there shall be
substituted for the fee schedule amount
an amount equal to the sum of--
(I) 50 percent of the fee
schedule amount determined
under clause (ii) adjusted by
the update established under
subsection (d)(3) for 1995, and
(II) 50 percent of the fee
schedule amount determined
under paragraph (1) for 1995
without regard to this
paragraph.
(C) Special rule for anesthesia and radiology
services.--With respect to physicians' services
which are anesthesia services, the Secretary
shall provide for a transition in the same
manner as a transition is provided for other
services under subparagraph (B). With respect
to radiology services, ``109 percent'' and ``9
percent'' shall be substituted for ``115
percent'' and ``15 percent'', respectively, in
subparagraph (A)(ii).
(D) Adjusted historical payment basis
defined.--
(i) In general.--In this paragraph,
the term ``adjusted historical payment
basis'' means, with respect to a
physicians' service furnished in a fee
schedule area, the weighted average
prevailing charge applied in the area
for the service in 1991 (as determined
by the Secretary without regard to
physician specialty and as adjusted to
reflect payments for services with
customary charges below the prevailing
charge or other payment limitations
imposed by law or regulation) adjusted
by the update established under
subsection (d)(3) for 1992.
(ii) Application to radiology
services.--In applying clause (i) in
the case of physicians' services which
are radiology services (including
radiologist services, as defined in
section 1834(b)(6)), but excluding
nuclear medicine services that are
subject to section 6105(b) of the
Omnibus Budget Reconciliation Act of
1989, there shall be substituted for
the weighted average prevailing charge
the amount provided under the fee
schedule established for the service
for the fee schedule area under section
1834(b).
(iii) Nuclear medicine services.--In
applying clause (i) in the case of
physicians' services which are nuclear
medicine services, there shall be
substituted for the weighted average
prevailing charge the amount provided
under section 6105(b) of the Omnibus
Budget Reconciliation Act of 1989.
(3) Incentives for participating physicians and
suppliers.--In applying paragraph (1)(B) in the case of
a nonparticipating physician or a nonparticipating
supplier or other person, the fee schedule amount shall
be 95 percent of such amount otherwise applied under
this subsection (without regard to this paragraph). In
the case of physicians' services (including services
which the Secretary excludes pursuant to subsection
(j)(3)) of a nonparticipating physician, supplier, or
other person for which payment is made under this part
on a basis other than the fee schedule amount, the
payment shall be based on 95 percent of the payment
basis for such services furnished by a participating
physician, supplier, or other person.
(4) Special rule for medical direction.--
(A) In general.--With respect to physicians'
services furnished on or after January 1, 1994,
and consisting of medical direction of two,
three, or four concurrent anesthesia cases,
except as provided in paragraph (5), the fee
schedule amount to be applied shall be equal to
one-half of the amount described in
subparagraph (B).
(B) Amount.--The amount described in this
subparagraph, for a physician's medical
direction of the performance of anesthesia
services, is the following percentage of the
fee schedule amount otherwise applicable under
this section if the anesthesia services were
personally performed by the physician alone:
(i) For services furnished during
1994, 120 percent.
(ii) For services furnished during
1995, 115 percent.
(iii) For services furnished during
1996, 110 percent.
(iv) For services furnished during
1997, 105 percent.
(v) For services furnished after
1997, 100 percent.
(5) Incentives for electronic prescribing.--
(A) Adjustment.--
(i) In general.--Subject to
subparagraph (B) and subsection
(m)(2)(B), with respect to covered
professional services furnished by an
eligible professional during 2012, 2013
or 2014, if the eligible professional
is not a successful electronic
prescriber for the reporting period for
the year (as determined under
subsection (m)(3)(B)), the fee schedule
amount for such services furnished by
such professional during the year
(including the fee schedule amount for
purposes of determining a payment based
on such amount) shall be equal to the
applicable percent of the fee schedule
amount that would otherwise apply to
such services under this subsection
(determined after application of
paragraph (3) but without regard to
this paragraph).
(ii) Applicable percent.--For
purposes of clause (i), the term
``applicable percent'' means--
(I) for 2012, 99 percent;
(II) for 2013, 98.5 percent;
and
(III) for 2014, 98 percent.
(B) Significant hardship exception.--The
Secretary may, on a case-by-case basis, exempt
an eligible professional from the application
of the payment adjustment under subparagraph
(A) if the Secretary determines, subject to
annual renewal, that compliance with the
requirement for being a successful electronic
prescriber would result in a significant
hardship, such as in the case of an eligible
professional who practices in a rural area
without sufficient Internet access.
(C) Application.--
(i) Physician reporting system
rules.--Paragraphs (5), (6), and (8) of
subsection (k) shall apply for purposes
of this paragraph in the same manner as
they apply for purposes of such
subsection.
(ii) Incentive payment validation
rules.--Clauses (ii) and (iii) of
subsection (m)(5)(D) shall apply for
purposes of this paragraph in a similar
manner as they apply for purposes of
such subsection.
(D) Definitions.--For purposes of this
paragraph:
(i) Eligible professional; covered
professional services.--The terms
``eligible professional'' and ``covered
professional services'' have the
meanings given such terms in subsection
(k)(3).
(ii) Physician reporting system.--The
term ``physician reporting system''
means the system established under
subsection (k).
(iii) Reporting period.--The term
``reporting period'' means, with
respect to a year, a period specified
by the Secretary.
(6) Special rule for teaching anesthesiologists.--
With respect to physicians' services furnished on or
after January 1, 2010, in the case of teaching
anesthesiologists involved in the training of physician
residents in a single anesthesia case or two concurrent
anesthesia cases, the fee schedule amount to be applied
shall be 100 percent of the fee schedule amount
otherwise applicable under this section if the
anesthesia services were personally performed by the
teaching anesthesiologist alone and paragraph (4) shall
not apply if--
(A) the teaching anesthesiologist is present
during all critical or key portions of the
anesthesia service or procedure involved; and
(B) the teaching anesthesiologist (or another
anesthesiologist with whom the teaching
anesthesiologist has entered into an
arrangement) is immediately available to
furnish anesthesia services during the entire
procedure.
(7) Incentives for meaningful use of certified ehr
technology.--
(A) Adjustment.--
(i) In general.--Subject to
subparagraphs (B) and (D), with respect
to covered professional services
furnished by an eligible professional
during each of 2015 through 2018, if
the eligible professional is not a
meaningful EHR user (as determined
under subsection (o)(2)) for an EHR
reporting period for the year, the fee
schedule amount for such services
furnished by such professional during
the year (including the fee schedule
amount for purposes of determining a
payment based on such amount) shall be
equal to the applicable percent of the
fee schedule amount that would
otherwise apply to such services under
this subsection (determined after
application of paragraph (3) but
without regard to this paragraph).
(ii) Applicable percent.--Subject to
clause (iii), for purposes of clause
(i), the term ``applicable percent''
means--
(I) for 2015, 99 percent (or,
in the case of an eligible
professional who was subject to
the application of the payment
adjustment under section
1848(a)(5) for 2014, 98
percent);
(II) for 2016, 98 percent;
and
(III) for 2017 and 2018, 97
percent.
(iii) Authority to decrease
applicable percentage for 2018.--For
2018, if the Secretary finds that the
proportion of eligible professionals
who are meaningful EHR users (as
determined under subsection (o)(2)) is
less than 75 percent, the applicable
percent shall be decreased by 1
percentage point from the applicable
percent in the preceding year.
(B) Significant hardship exception.--The
Secretary may, on a case-by-case basis (and,
with respect to the payment adjustment under
subparagraph (A) for 2017, for categories of
eligible professionals, as established by the
Secretary and posted on the Internet website of
the Centers for Medicare & Medicaid Services
prior to December 15, 2015, an application for
which must be submitted to the Secretary by not
later than March 15, 2016), exempt an eligible
professional from the application of the
payment adjustment under subparagraph (A) if
the Secretary determines, subject to annual
renewal, that compliance with the requirement
for being a meaningful EHR user would result in
a significant hardship, such as in the case of
an eligible professional who practices in a
rural area without sufficient Internet access.
The Secretary shall exempt an eligible
professional from the application of the
payment adjustment under subparagraph (A) with
respect to a year, subject to annual renewal,
if the Secretary determines that compliance
with the requirement for being a meaningful EHR
user is not possible because the certified EHR
technology used by such professional has been
decertified under a program kept or recognized
pursuant to section 3001(c)(5) of the Public
Health Service Act. In no case may an eligible
professional be granted an exemption under this
subparagraph for more than 5 years.
(C) Application of physician reporting system
rules.--Paragraphs (5), (6), and (8) of
subsection (k) shall apply for purposes of this
paragraph in the same manner as they apply for
purposes of such subsection.
(D) Non-application to hospital-based and
ambulatory surgical center-based eligible
professionals.--
(i) Hospital-based.--No payment
adjustment may be made under
subparagraph (A) in the case of
hospital-based eligible professionals
(as defined in subsection
(o)(1)(C)(ii)).
(ii) Ambulatory surgical center-
based.--Subject to clause (iv), no
payment adjustment may be made under
subparagraph (A) for 2017 and 2018 in
the case of an eligible professional
with respect to whom substantially all
of the covered professional services
furnished by such professional are
furnished in an ambulatory surgical
center.
(iii) Determination.--The
determination of whether an eligible
professional is an eligible
professional described in clause (ii)
may be made on the basis of--
(I) the site of service (as
defined by the Secretary); or
(II) an attestation submitted
by the eligible professional.
Determinations made under subclauses
(I) and (II) shall be made without
regard to any employment or billing
arrangement between the eligible
professional and any other supplier or
provider of services.
(iv) Sunset.--Clause (ii) shall no
longer apply as of the first year that
begins more than 3 years after the date
on which the Secretary determines,
through notice and comment rulemaking,
that certified EHR technology
applicable to the ambulatory surgical
center setting is available.
(E) Definitions.--For purposes of this
paragraph:
(i) Covered professional services.--
The term ``covered professional
services'' has the meaning given such
term in subsection (k)(3).
(ii) EHR reporting period.--The term
``EHR reporting period'' means, with
respect to a year, a period (or
periods) specified by the Secretary.
(iii) Eligible professional.--The
term ``eligible professional'' means a
physician, as defined in section
1861(r).
(8) Incentives for quality reporting.--
(A) Adjustment.--
(i) In general.--With respect to
covered professional services furnished
by an eligible professional during each
of 2015 through 2018, if the eligible
professional does not satisfactorily
submit data on quality measures for
covered professional services for the
quality reporting period for the year
(as determined under subsection
(m)(3)(A)), the fee schedule amount for
such services furnished by such
professional during the year (including
the fee schedule amount for purposes of
determining a payment based on such
amount) shall be equal to the
applicable percent of the fee schedule
amount that would otherwise apply to
such services under this subsection
(determined after application of
paragraphs (3), (5), and (7), but
without regard to this paragraph).
(ii) Applicable percent.--For
purposes of clause (i), the term
``applicable percent'' means--
(I) for 2015, 98.5 percent;
and
(II) for 2016, 2017, and
2018, 98 percent.
(B) Application.--
(i) Physician reporting system
rules.--Paragraphs (5), (6), and (8) of
subsection (k) shall apply for purposes
of this paragraph in the same manner as
they apply for purposes of such
subsection.
(ii) Incentive payment validation
rules.--Clauses (ii) and (iii) of
subsection (m)(5)(D) shall apply for
purposes of this paragraph in a similar
manner as they apply for purposes of
such subsection.
(C) Definitions.--For purposes of this
paragraph:
(i) Eligible professional; covered
professional services.--The terms
``eligible professional'' and ``covered
professional services'' have the
meanings given such terms in subsection
(k)(3).
(ii) Physician reporting system.--The
term ``physician reporting system''
means the system established under
subsection (k).
(iii) Quality reporting period.--The
term ``quality reporting period''
means, with respect to a year, a period
specified by the Secretary.
(9) Information reporting on services included in
global surgical packages.--With respect to services for
which a physician is required to report information in
accordance with subsection (c)(8)(B)(i), the Secretary
may through rulemaking delay payment of 5 percent of
the amount that would otherwise be payable under the
physician fee schedule under this section for such
services until the information so required is reported.
(b) Establishment of Fee Schedules.--
(1) In general.--Before November 1 of the preceding
year, for each year beginning with 1998, subject to
subsection (p), the Secretary shall establish, by
regulation, fee schedules that establish payment
amounts for all physicians' services furnished in all
fee schedule areas (as defined in subsection (j)(2))
for the year. Except as provided in paragraph (2), each
such payment amount for a service shall be equal to the
product of--
(A) the relative value for the service (as
determined in subsection (c)(2)),
(B) the conversion factor (established under
subsection (d)) for the year, and
(C) the geographic adjustment factor
(established under subsection (e)(2)) for the
service for the fee schedule area.
(2) Treatment of radiology services and anesthesia
services.--
(A) Radiology services.--With respect to
radiology services (including radiologist
services, as defined in section 1834(b)(6)),
the Secretary shall base the relative values on
the relative value scale developed under
section 1834(b)(1)(A), with appropriate
modifications of the relative values to assure
that the relative values established for
radiology services which are similar or related
to other physicians' services are consistent
with the relative values established for those
similar or related services.
(B) Anesthesia services.--In establishing the
fee schedule for anesthesia services for which
a relative value guide has been established
under section 4048(b) of the Omnibus Budget
Reconciliation Act of 1987, the Secretary shall
use, to the extent practicable, such relative
value guide, with appropriate adjustment of the
conversion factor, in a manner to assure that
the fee schedule amounts for anesthesia
services are consistent with the fee schedule
amounts for other services determined by the
Secretary to be of comparable value. In
applying the previous sentence, the Secretary
shall adjust the conversion factor by
geographic adjustment factors in the same
manner as such adjustment is made under
paragraph (1)(C).
(C) Consultation.--The Secretary shall
consult with the Physician Payment Review
Commission and organizations representing
physicians or suppliers who furnish radiology
services and anesthesia services in applying
subparagraphs (A) and (B).
(3) Treatment of interpretation of
electrocardiograms.--The Secretary--
(A) shall make separate payment under this
section for the interpretation of
electrocardiograms performed or ordered to be
performed as part of or in conjunction with a
visit to or a consultation with a physician,
and
(B) shall adjust the relative values
established for visits and consultations under
subsection (c) so as not to include relative
value units for interpretations of
electrocardiograms in the relative value for
visits and consultations.
(4) Special rule for imaging services.--
(A) In general.--In the case of imaging
services described in subparagraph (B)
furnished on or after January 1, 2007, if--
(i) the technical component
(including the technical component
portion of a global fee) of the service
established for a year under the fee
schedule described in paragraph (1)
without application of the geographic
adjustment factor described in
paragraph (1)(C), exceeds
(ii) the Medicare OPD fee schedule
amount established under the
prospective payment system for hospital
outpatient department services under
paragraph (3)(D) of section 1833(t) for
such service for such year, determined
without regard to geographic adjustment
under paragraph (2)(D) of such section,
the Secretary shall substitute the amount
described in clause (ii), adjusted by the
geographic adjustment factor described in
paragraph (1)(C), for the fee schedule amount
for such technical component for such year.
(B) Imaging services described.--For purposes
of this paragraph, imaging services described
in this subparagraph are imaging and computer-
assisted imaging services, including X-ray,
ultrasound (including echocardiography),
nuclear medicine (including positron emission
tomography), magnetic resonance imaging,
computed tomography, and fluoroscopy, but
excluding diagnostic and screening mammography,
and for 2010, 2011, and the first 2 months of
2012, dual-energy x-ray absorptiometry services
(as described in paragraph (6)).
(C) Adjustment in imaging utilization rate.--
With respect to fee schedules established for
2011, 2012, and 2013, in the methodology for
determining practice expense relative value
units for expensive diagnostic imaging
equipment under the final rule published by the
Secretary in the Federal Register on November
25, 2009 (42 CFR 410 et al.), the Secretary
shall use a 75 percent assumption instead of
the utilization rates otherwise established in
such final rule. With respect to fee schedules
established for 2014 and subsequent years, in
such methodology, the Secretary shall use a 90
percent utilization rate.
(D) Adjustment in technical component
discount on single-session imaging involving
consecutive body parts.--For services furnished
on or after July 1, 2010, the Secretary shall
increase the reduction in payments attributable
to the multiple procedure payment reduction
applicable to the technical component for
imaging under the final rule published by the
Secretary in the Federal Register on November
21, 2005 (part 405 of title 42, Code of Federal
Regulations) from 25 percent to 50 percent.
(5) Treatment of intensive cardiac rehabilitation
program.--
(A) In general.--In the case of an intensive
cardiac rehabilitation program described in
section 1861(eee)(4), the Secretary shall
substitute the Medicare OPD fee schedule amount
established under the prospective payment
system for hospital outpatient department
service under paragraph (3)(D) of section
1833(t) for cardiac rehabilitation (under HCPCS
codes 93797 and 93798 for calendar year 2007,
or any succeeding HCPCS codes for cardiac
rehabilitation).
(B) Definition of session.--Each of the
services described in subparagraphs (A) through
(E) of section 1861(eee)(3), when furnished for
one hour, is a separate session of intensive
cardiac rehabilitation.
(C) Multiple sessions per day.--Payment may
be made for up to 6 sessions per day of the
series of 72 one-hour sessions of intensive
cardiac rehabilitation services described in
section 1861(eee)(4)(B).
(6) Treatment of bone mass scans.--For dual-energy x-
ray absorptiometry services (identified in 2006 by
HCPCS codes 76075 and 76077 (and any succeeding codes))
furnished during 2010, 2011, and the first 2 months of
2012, instead of the payment amount that would
otherwise be determined under this section for such
years, the payment amount shall be equal to 70 percent
of the product of--
(A) the relative value for the service (as
determined in subsection (c)(2)) for 2006;
(B) the conversion factor (established under
subsection (d)) for 2006; and
(C) the geographic adjustment factor
(established under subsection (e)(2)) for the
service for the fee schedule area for 2010,
2011, and the first 2 months of 2012,
respectively.
(7) Adjustment in discount for certain multiple
therapy services.--In the case of therapy services
furnished on or after January 1, 2011, and before April
1, 2013, and for which payment is made under fee
schedules established under this section, instead of
the 25 percent multiple procedure payment reduction
specified in the final rule published by the Secretary
in the Federal Register on November 29, 2010, the
reduction percentage shall be 20 percent. In the case
of such services furnished on or after April 1, 2013,
and for which payment is made under such fee schedules,
instead of the 25 percent multiple procedure payment
reduction specified in such final rule, the reduction
percentage shall be 50 percent.
(8) Encouraging care management for individuals with
chronic care needs.--
(A) In general.--In order to encourage the
management of care for individuals with chronic
care needs the Secretary shall, subject to
subparagraph (B), make payment (as the
Secretary determines to be appropriate) under
this section for chronic care management
services furnished on or after January 1, 2015,
by a physician (as defined in section
1861(r)(1)), physician assistant or nurse
practitioner (as defined in section
1861(aa)(5)(A)), clinical nurse specialist (as
defined in section 1861(aa)(5)(B)), or
certified nurse midwife (as defined in section
1861(gg)(2)).
(B) Policies relating to payment.--In
carrying out this paragraph, with respect to
chronic care management services, the Secretary
shall--
(i) make payment to only one
applicable provider for such services
furnished to an individual during a
period;
(ii) not make payment under
subparagraph (A) if such payment would
be duplicative of payment that is
otherwise made under this title for
such services; and
(iii) not require that an annual
wellness visit (as defined in section
1861(hhh)) or an initial preventive
physical examination (as defined in
section 1861(ww)) be furnished as a
condition of payment for such
management services.
(C) Clarification.--In carrying out this
paragraph, with respect to chronic care
management services, the Secretary may, subject
to subparagraph (B), make payment for such
services furnished through the use of secure
messaging, Internet, store and forward
technologies, or other non-face-to-face
communication methods determined appropriate by
the Secretary.
(9) Special rule to incentivize transition from
traditional x-ray imaging to digital radiography.--
(A) Limitation on payment for film x-ray
imaging services.--In the case of an imaging
service (including the imaging portion of a
service) that is an X-ray taken using film and
that is furnished during 2017 or a subsequent
year, the payment amount for the technical
component (including the technical component
portion of a global service) of such service
that would otherwise be determined under this
section (without application of this paragraph
and before application of any other adjustment
under this section) for such year shall be
reduced by 20 percent.
(B) Phased-in limitation on payment for
computed radiography imaging services.--In the
case of an imaging service (including the
imaging portion of a service) that is an X-ray
taken using computed radiography technology--
(i) in the case of such a service
furnished during 2018, 2019, 2020,
2021, or 2022, the payment amount for
the technical component (including the
technical component portion of a global
service) of such service that would
otherwise be determined under this
section (without application of this
paragraph and before application of any
other adjustment under this section)
for such year shall be reduced by 7
percent; and
(ii) in the case of such a service
furnished during 2023 or a subsequent
year, the payment amount for the
technical component (including the
technical component portion of a global
service) of such service that would
otherwise be determined under this
section (without application of this
paragraph and before application of any
other adjustment under this section)
for such year shall be reduced by 10
percent.
(C) Computed radiography technology
defined.--For purposes of this paragraph, the
term ``computed radiography technology'' means
cassette-based imaging which utilizes an
imaging plate to create the image involved.
(D) Implementation.--In order to implement
this paragraph, the Secretary shall adopt
appropriate mechanisms which may include use of
modifiers.
(10) Reduction of discount in payment for
professional component of multiple imaging services.--
In the case of the professional component of imaging
services furnished on or after January 1, 2017, instead
of the 25 percent reduction for multiple procedures
specified in the final rule published by the Secretary
in the Federal Register on November 28, 2011, as
amended in the final rule published by the Secretary in
the Federal Register on November 16, 2012, the
reduction percentage shall be 5 percent.
(11) Special rule for certain radiation therapy
services.--The code definitions, the work relative
value units under subsection (c)(2)(C)(i), and the
direct inputs for the practice expense relative value
units under subsection (c)(2)(C)(ii) for radiation
treatment delivery and related imaging services
(identified in 2016 by HCPCS G-codes G6001 through
G6015) for the fee schedule established under this
subsection for services furnished in 2017 and 2018
shall be the same as such definitions, units, and
inputs for such services for the fee schedule
established for services furnished in 2016.
(c) Determination of Relative Values for Physicians'
Services.--
(1) Division of physicians' services into
components.--In this section, with respect to a
physicians' service:
(A) Work component defined.--The term ``work
component'' means the portion of the resources
used in furnishing the service that reflects
physician time and intensity in furnishing the
service. Such portion shall--
(i) include activities before and
after direct patient contact, and
(ii) be defined, with respect to
surgical procedures, to reflect a
global definition including pre-
operative and post-operative
physicians' services.
(B) Practice expense component defined.--The
term ``practice expense component'' means the
portion of the resources used in furnishing the
service that reflects the general categories of
expenses (such as office rent and wages of
personnel, but excluding malpractice expenses)
comprising practice expenses.
(C) Malpractice component defined.--The term
``malpractice component'' means the portion of
the resources used in furnishing the service
that reflects malpractice expenses in
furnishing the service.
(2) Determination of relative values.--
(A) In general.--
(i) Combination of units for
components.--The Secretary shall
develop a methodology for combining the
work, practice expense, and malpractice
relative value units, determined under
subparagraph (C), for each service in a
manner to produce a single relative
value for that service. Such relative
values are subject to adjustment under
subparagraph (F)(i) and section
13515(b) of the Omnibus Budget
Reconciliation Act of 1993.
(ii) Extrapolation.--The Secretary
may use extrapolation and other
techniques to determine the number of
relative value units for physicians'
services for which specific data are
not available and shall take into
account recommendations of the
Physician Payment Review Commission and
the results of consultations with
organizations representing physicians
who provide such services.
(B) Periodic review and adjustments in
relative values.--
(i) Periodic review.--The Secretary,
not less often than every 5 years,
shall review the relative values
established under this paragraph for
all physicians' services.
(ii) Adjustments.--
(I) In general.--The
Secretary shall, to the extent
the Secretary determines to be
necessary and subject to
subclause (II) and paragraph
(7), adjust the number of such
units to take into account
changes in medical practice,
coding changes, new data on
relative value components, or
the addition of new procedures.
The Secretary shall publish an
explanation of the basis for
such adjustments.
(II) Limitation on annual
adjustments.--Subject to
clauses (iv) and (v), the
adjustments under subclause (I)
for a year may not cause the
amount of expenditures under
this part for the year to
differ by more than $20,000,000
from the amount of expenditures
under this part that would have
been made if such adjustments
had not been made.
(iii) Consultation.--The Secretary,
in making adjustments under clause
(ii), shall consult with the Medicare
Payment Advisory Commission and
organizations representing physicians.
(iv) Exemption of certain additional
expenditures from budget neutrality.--
The additional expenditures
attributable to--
(I) subparagraph (H) shall
not be taken into account in
applying clause (ii)(II) for
2004;
(II) subparagraph (I) insofar
as it relates to a physician
fee schedule for 2005 or 2006
shall not be taken into account
in applying clause (ii)(II) for
drug administration services
under the fee schedule for such
year for a specialty described
in subparagraph (I)(ii)(II);
(III) subparagraph (J)
insofar as it relates to a
physician fee schedule for 2005
or 2006 shall not be taken into
account in applying clause
(ii)(II) for drug
administration services under
the fee schedule for such year;
and
(IV) subsection (b)(6) shall
not be taken into account in
applying clause (ii)(II) for
2010, 2011, or the first 2
months of 2012.
(v) Exemption of certain reduced
expenditures from budget-neutrality
calculation.--The following reduced
expenditures, as estimated by the
Secretary, shall not be taken into
account in applying clause (ii)(II):
(I) Reduced payment for
multiple imaging procedures.--
Effective for fee schedules
established beginning with
2007, reduced expenditures
attributable to the multiple
procedure payment reduction for
imaging under the final rule
published by the Secretary in
the Federal Register on
November 21, 2005 (42 CFR 405,
et al.) insofar as it relates
to the physician fee schedules
for 2006 and 2007.
(II) OPD payment cap for
imaging services.--Effective
for fee schedules established
beginning with 2007, reduced
expenditures attributable to
subsection (b)(4).
(III) Change in utilization
rate for certain imaging
services.--Effective for fee
schedules established beginning
with 2011, reduced expenditures
attributable to the changes in
the utilization rate applicable
to 2011 and 2014, as described
in the first and second
sentence, respectively, of
subsection (b)(4)(C).
(VI) Additional reduced
payment for multiple imaging
procedures.--Effective for fee
schedules established beginning
with 2010 (but not applied for
services furnished prior to
July 1, 2010), reduced
expenditures attributable to
the increase in the multiple
procedure payment reduction
from 25 to 50 percent (as
described in subsection
(b)(4)(D)).
(VII) Reduced expenditures
for multiple therapy
services.--Effective for fee
schedules established beginning
with 2011, reduced expenditures
attributable to the multiple
procedure payment reduction for
therapy services (as described
in subsection (b)(7)).
(VIII) Reduced expenditures
attributable to application of
quality incentives for computed
tomography.--Effective for fee
schedules established beginning
with 2016, reduced expenditures
attributable to the application
of the quality incentives for
computed tomography under
section 1834(p)
(IX) Reductions for misvalued
services if target not met.--
Effective for fee schedules
beginning with 2016, reduced
expenditures attributable to
the application of the target
recapture amount described in
subparagraph (O)(iii).
(X) Reduced expenditures
attributable to incentives to
transition to digital
radiography.--Effective for fee
schedules established beginning
with 2017, reduced expenditures
attributable to subparagraph
(A) of subsection (b)(9) and
effective for fee schedules
established beginning with
2018, reduced expenditures
attributable to subparagraph
(B) of such subsection.
(XI) Discount in payment for
professional component of
imaging services.--Effective
for fee schedules established
beginning with 2017, reduced
expenditures attributable to
subsection (b)(10).
(vi) Alternative application of
budget-neutrality adjustment.--
Notwithstanding subsection (d)(9)(A),
effective for fee schedules established
beginning with 2009, with respect to
the 5-year review of work relative
value units used in fee schedules for
2007 and 2008, in lieu of continuing to
apply budget-neutrality adjustments
required under clause (ii) for 2007 and
2008 to work relative value units, the
Secretary shall apply such budget-
neutrality adjustments to the
conversion factor otherwise determined
for years beginning with 2009.
(C) Computation of relative value units for
components.--For purposes of this section for
each physicians' service--
(i) Work relative value units.--The
Secretary shall determine a number of
work relative value units for the
service or group of services based on
the relative resources incorporating
physician time and intensity required
in furnishing the service or group of
services.
(ii) Practice expense relative value
units.--The Secretary shall determine a
number of practice expense relative
value units for the service for years
before 1999 equal to the product of--
(I) the base allowed charges
(as defined in subparagraph
(D)) for the service, and
(II) the practice expense
percentage for the service (as
determined under paragraph
(3)(C)(ii)),
and for years beginning with 1999 based
on the relative practice expense
resources involved in furnishing the
service or group of services. For 1999,
such number of units shall be
determined based 75 percent on such
product and based 25 percent on the
relative practice expense resources
involved in furnishing the service. For
2000, such number of units shall be
determined based 50 percent on such
product and based 50 percent on such
relative practice expense resources.
For 2001, such number of units shall be
determined based 25 percent on such
product and based 75 percent on such
relative practice expense resources.
For a subsequent year, such number of
units shall be determined based
entirely on such relative practice
expense resources.
(iii) Malpractice relative value
units.--The Secretary shall determine a
number of malpractice relative value
units for the service or group of
services for years before 2000 equal to
the product of--
(I) the base allowed charges
(as defined in subparagraph
(D)) for the service or group
of services, and
(II) the malpractice
percentage for the service or
group of services (as
determined under paragraph
(3)(C)(iii)),
and for years beginning with 2000 based
on the malpractice expense resources
involved in furnishing the service or
group of services.
(D) Base allowed charges defined.--In this
paragraph, the term ``base allowed charges''
means, with respect to a physician's service,
the national average allowed charges for the
service under this part for services furnished
during 1991, as estimated by the Secretary
using the most recent data available.
(E) Reduction in practice expense relative
value units for certain services.--
(i) In general.--Subject to clause
(ii), the Secretary shall reduce the
practice expense relative value units
applied to services described in clause
(iii) furnished in--
(I) 1994, by 25 percent of
the number by which the number
of practice expense relative
value units (determined for
1994 without regard to this
subparagraph) exceeds the
number of work relative value
units determined for 1994,
(II) 1995, by an additional
25 percent of such excess, and
(III) 1996, by an additional
25 percent of such excess.
(ii) Floor on reductions.--The
practice expense relative value units
for a physician's service shall not be
reduced under this subparagraph to a
number less than 128 percent of the
number of work relative value units.
(iii) Services covered.--For purposes
of clause (i), the services described
in this clause are physicians' services
that are not described in clause (iv)
and for which--
(I) there are work relative
value units, and
(II) the number of practice
expense relative value units
(determined for 1994) exceeds
128 percent of the number of
work relative value units
(determined for such year).
(iv) Excluded services.--For purposes
of clause (iii), the services described
in this clause are services which the
Secretary determines at least 75
percent of which are provided under
this title in an office setting.
(F) Budget neutrality adjustments.--The
Secretary--
(i) shall reduce the relative values
for all services (other than anesthesia
services) established under this
paragraph (and in the case of
anesthesia services, the conversion
factor established by the Secretary for
such services) by such percentage as
the Secretary determines to be
necessary so that, beginning in 1996,
the amendment made by section 13514(a)
of the Omnibus Budget Reconciliation
Act of 1993 would not result in
expenditures under this section that
exceed the amount of such expenditures
that would have been made if such
amendment had not been made, and
(ii) shall reduce the amounts
determined under subsection
(a)(2)(B)(ii)(I) by such percentage as
the Secretary determines to be required
to assure that, taking into account the
reductions made under clause (i), the
amendment made by section 13514(a) of
the Omnibus Budget Reconciliation Act
of 1993 would not result in
expenditures under this section in 1994
that exceed the amount of such
expenditures that would have been made
if such amendment had not been made.
(G) Adjustments in relative value units for
1998.--
(i) In general.--The Secretary
shall--
(I) subject to clauses (iv)
and (v), reduce the practice
expense relative value units
applied to any services
described in clause (ii)
furnished in 1998 to a number
equal to 110 percent of the
number of work relative value
units, and
(II) increase the practice
expense relative value units
for office visit procedure
codes during 1998 by a uniform
percentage which the Secretary
estimates will result in an
aggregate increase in payments
for such services equal to the
aggregate decrease in payments
by reason of subclause (I).
(ii) Services covered.--For purposes
of clause (i), the services described
in this clause are physicians' services
that are not described in clause (iii)
and for which--
(I) there are work relative
value units, and
(II) the number of practice
expense relative value units
(determined for 1998) exceeds
110 percent of the number of
work relative value units
(determined for such year).
(iii) Excluded services.--For
purposes of clause (ii), the services
described in this clause are services
which the Secretary determines at least
75 percent of which are provided under
this title in an office setting.
(iv) Limitation on aggregate
reallocation.--If the application of
clause (i)(I) would result in an
aggregate amount of reductions under
such clause in excess of $390,000,000,
such clause shall be applied by
substituting for 110 percent such
greater percentage as the Secretary
estimates will result in the aggregate
amount of such reductions equaling
$390,000,000.
(v) No reduction for certain
services.--Practice expense relative
value units for a procedure performed
in an office or in a setting out of an
office shall not be reduced under
clause (i) if the in-office or out-of-
office practice expense relative value,
respectively, for the procedure would
increase under the proposed rule on
resource-based practice expenses issued
by the Secretary on June 18, 1997 (62
Federal Register 33158 et seq.).
(H) Adjustments in practice expense relative
value units for certain drug administration
services beginning in 2004.--
(i) Use of survey data.--In
establishing the physician fee schedule
under subsection (b) with respect to
payments for services furnished on or
after January 1, 2004, the Secretary
shall, in determining practice expense
relative value units under this
subsection, utilize a survey submitted
to the Secretary as of January 1, 2003,
by a physician specialty organization
pursuant to section 212 of the
Medicare, Medicaid, and SCHIP Balanced
Budget Refinement Act of 1999 if the
survey--
(I) covers practice expenses
for oncology drug
administration services; and
(II) meets criteria
established by the Secretary
for acceptance of such surveys.
(ii) Pricing of clinical oncology
nurses in practice expense
methodology.--If the survey described
in clause (i) includes data on wages,
salaries, and compensation of clinical
oncology nurses, the Secretary shall
utilize such data in the methodology
for determining practice expense
relative value units under subsection
(c).
(iii) Work relative value units for
certain drug administration services.--
In establishing the relative value
units under this paragraph for drug
administration services described in
clause (iv) furnished on or after
January 1, 2004, the Secretary shall
establish work relative value units
equal to the work relative value units
for a level 1 office medical visit for
an established patient.
(iv) Drug administration services
described.--The drug administration
services described in this clause are
physicians' services--
(I) which are classified as
of October 1, 2003, within any
of the following groups of
procedures: therapeutic or
diagnostic infusions (excluding
chemotherapy); chemotherapy
administration services; and
therapeutic, prophylactic, or
diagnostic injections;
(II) for which there are no
work relative value units
assigned under this subsection
as of such date; and
(III) for which national
relative value units have been
assigned under this subsection
as of such date.
(I) Adjustments in practice expense relative
value units for certain drug administration
services beginning with 2005.--
(i) In general.--In establishing the
physician fee schedule under subsection
(b) with respect to payments for
services furnished on or after January
1, 2005 or 2006, the Secretary shall
adjust the practice expense relative
value units for such year consistent
with clause (ii).
(ii) Use of supplemental survey
data.--
(I) In general.--Subject to
subclause (II), if a specialty
submits to the Secretary by not
later than March 1, 2004, for
2005, or March 1, 2005, for
2006, data that includes
expenses for the administration
of drugs and biologicals for
which the payment amount is
determined pursuant to section
1842(o), the Secretary shall
use such supplemental survey
data in carrying out this
subparagraph for the years
involved insofar as they are
collected and provided by
entities and organizations
consistent with the criteria
established by the Secretary
pursuant to section 212(a) of
the Medicare, Medicaid, and
SCHIP Balanced Budget
Refinement Act of 1999.
(II) Limitation on
specialty.--Subclause (I) shall
apply to a specialty only
insofar as not less than 40
percent of payments for the
specialty under this title in
2002 are attributable to the
administration of drugs and
biologicals, as determined by
the Secretary.
(III) Application.--This
clause shall not apply with
respect to a survey to which
subparagraph (H)(i) applies.
(J) Provisions for appropriate reporting and
billing for physicians' services associated
with the administration of covered outpatient
drugs and biologicals.--
(i) Evaluation of codes.--The
Secretary shall promptly evaluate
existing drug administration codes for
physicians' services to ensure accurate
reporting and billing for such
services, taking into account levels of
complexity of the administration and
resource consumption.
(ii) Use of existing processes.--In
carrying out clause (i), the Secretary
shall use existing processes for the
consideration of coding changes and, to
the extent coding changes are made,
shall use such processes in
establishing relative values for such
services.
(iii) Implementation.--In carrying
out clause (i), the Secretary shall
consult with representatives of
physician specialties affected by the
implementation of section 1847A or
section 1847B, and shall take such
steps within the Secretary's authority
to expedite such considerations under
clause (ii).
(iv) Subsequent, budget neutral
adjustments permitted.--Nothing in
subparagraph (H) or (I) or this
subparagraph shall be construed as
preventing the Secretary from providing
for adjustments in practice expense
relative value units under (and
consistent with) subparagraph (B) for
years after 2004, 2005, or 2006,
respectively.
(K) Potentially misvalued codes.--
(i) In general.--The Secretary
shall--
(I) periodically identify
services as being potentially
misvalued using criteria
specified in clause (ii); and
(II) review and make
appropriate adjustments to the
relative values established
under this paragraph for
services identified as being
potentially misvalued under
subclause (I).
(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.
(XVI) Codes as determined
appropriate by the Secretary.
(iii) Review and adjustments.--
(I) The Secretary may use
existing processes to receive
recommendations on the review
and appropriate adjustment of
potentially misvalued services
described in clause (i)(II).
(II) The Secretary may
conduct surveys, other data
collection activities, studies,
or other analyses as the
Secretary determines to be
appropriate to facilitate the
review and appropriate
adjustment described in clause
(i)(II).
(III) The Secretary may use
analytic contractors to
identify and analyze services
identified under clause (i)(I),
conduct surveys or collect
data, and make recommendations
on the review and appropriate
adjustment of services
described in clause (i)(II).
(IV) The Secretary may
coordinate the review and
appropriate adjustment
described in clause (i)(II)
with the periodic review
described in subparagraph (B).
(V) As part of the review and
adjustment described in clause
(i)(II), including with respect
to codes with low relative
values described in clause
(ii), the Secretary may make
appropriate coding revisions
(including using existing
processes for consideration of
coding changes) which may
include consolidation of
individual services into
bundled codes for payment under
the fee schedule under
subsection (b).
(VI) The provisions of
subparagraph (B)(ii)(II) and
paragraph (7) shall apply to
adjustments to relative value
units made pursuant to this
subparagraph in the same manner
as such provisions apply to
adjustments under subparagraph
(B)(ii)(I).
(iv) Treatment of certain radiation
therapy services.--Radiation treatment
delivery and related imaging services
identified under subsection (b)(11)
shall not be considered as potentially
misvalued services for purposes of this
subparagraph and subparagraph (O) for
2017 and 2018.
(L) Validating relative value units.--
(i) In general.--The Secretary shall
establish a process to validate
relative value units under the fee
schedule under subsection (b).
(ii) Components and elements of
work.--The process described in clause
(i) may include validation of work
elements (such as time, mental effort
and professional judgment, technical
skill and physical effort, and stress
due to risk) involved with furnishing a
service and may include validation of
the pre-, post-, and intra-service
components of work.
(iii) Scope of codes.--The validation
of work relative value units shall
include a sampling of codes for
services that is the same as the codes
listed under subparagraph (K)(ii).
(iv) Methods.--The Secretary may
conduct the validation under this
subparagraph using methods described in
subclauses (I) through (V) of
subparagraph (K)(iii) as the Secretary
determines to be appropriate.
(v) Adjustments.--The Secretary shall
make appropriate adjustments to the
work relative value units under the fee
schedule under subsection (b). The
provisions of subparagraph (B)(ii)(II)
shall apply to adjustments to relative
value units made pursuant to this
subparagraph in the same manner as such
provisions apply to adjustments under
subparagraph (B)(ii)(II).
(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.
(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.
(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).
(O) Target for relative value adjustments for
misvalued services.--With respect to fee
schedules established for each of 2016 through
2018, 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
2016.
(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
(or, for 2016, 1.0 percent) of the
estimated amount of expenditures under
the fee schedule under this section for
the year.
(3) Component percentages.--For purposes of paragraph
(2), the Secretary shall determine a work percentage, a
practice expense percentage, and a malpractice
percentage for each physician's service as follows:
(A) Division of services by specialty.--For
each physician's service or class of
physicians' services, the Secretary shall
determine the average percentage of each such
service or class of services that is performed,
nationwide, under this part by physicians in
each of the different physician specialties (as
identified by the Secretary).
(B) Division of specialty by component.--The
Secretary shall determine the average
percentage division of resources, among the
work component, the practice expense component,
and the malpractice component, used by
physicians in each of such specialties in
furnishing physicians' services. Such
percentages shall be based on national data
that describe the elements of physician
practice costs and revenues, by physician
specialty. The Secretary may use extrapolation
and other techniques to determine practice
costs and revenues for specialties for which
adequate data are not available.
(C) Determination of component percentages.--
(i) Work percentage.--The work
percentage for a service (or class of
services) is equal to the sum (for all
physician specialties) of--
(I) the average percentage
division for the work component
for each physician specialty
(determined under subparagraph
(B)), multiplied by
(II) the proportion
(determined under subparagraph
(A)) of such service (or
services) performed by
physicians in that specialty.
(ii) Practice expense percentage.--
For years before 2002, the practice
expense percentage for a service (or
class of services) is equal to the sum
(for all physician specialties) of--
(I) the average percentage
division for the practice
expense component for each
physician specialty (determined
under subparagraph (B)),
multiplied by
(II) the proportion
(determined under subparagraph
(A)) of such service (or
services) performed by
physicians in that specialty.
(iii) Malpractice percentage.--For
years before 1999, the malpractice
percentage for a service (or class of
services) is equal to the sum (for all
physician specialties) of--
(I) the average percentage
division for the malpractice
component for each physician
specialty (determined under
subparagraph (B)), multiplied
by
(II) the proportion
(determined under subparagraph
(A)) of such service (or
services) performed by
physicians in that specialty.
(D) Periodic recomputation.--The Secretary
may, from time to time, provide for the
recomputation of work percentages, practice
expense percentages, and malpractice
percentages determined under this paragraph.
(4) Ancillary policies.--The Secretary may establish
ancillary policies (with respect to the use of
modifiers, local codes, and other matters) as may be
necessary to implement this section.
(5) Coding.--The Secretary shall establish a uniform
procedure coding system for the coding of all
physicians' services. The Secretary shall provide for
an appropriate coding structure for visits and
consultations. The Secretary may incorporate the use of
time in the coding for visits and consultations. The
Secretary, in establishing such coding system, shall
consult with the Physician Payment Review Commission
and other organizations representing physicians.
(6) No variation for specialists.--The Secretary may
not vary the conversion factor or the number of
relative value units for a physicians' service based on
whether the physician furnishing the service is a
specialist or based on the type of specialty of the
physician.
(7) Phase-in of significant relative value unit (rvu)
reductions.--Effective for fee schedules established
beginning with 2016, 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.
(8) Global surgical packages.--
(A) Prohibition of implementation of rule
regarding global surgical packages.--
(i) In general.--The Secretary shall
not implement the policy established in
the final rule published on November
13, 2014 (79 Fed. Reg. 67548 et seq.),
that requires the transition of all 10-
day and 90-day global surgery packages
to 0-day global periods.
(ii) Construction.--Nothing in clause
(i) shall be construed to prevent the
Secretary from revaluing misvalued
codes for specific surgical services or
assigning values to new or revised
codes for surgical services.
(B) Collection of data on services included
in global surgical packages.--
(i) In general.--Subject to clause
(ii), the Secretary shall through
rulemaking develop and implement a
process to gather, from a
representative sample of physicians,
beginning not later than January 1,
2017, information needed to value
surgical services. Such information
shall include the number and level of
medical visits furnished during the
global period and other items and
services related to the surgery and
furnished during the global period, as
appropriate. Such information shall be
reported on claims at the end of the
global period or in another manner
specified by the Secretary. For
purposes of carrying out this paragraph
(other than clause (iii)), the
Secretary shall transfer from the
Federal Supplemental Medical Insurance
Trust Fund under section 1841
$2,000,000 to the Center for Medicare &
Medicaid Services Program Management
Account for fiscal year 2015. Amounts
transferred under the previous sentence
shall remain available until expended.
(ii) Reassessment and potential
sunset.--Every 4 years, the Secretary
shall reassess the value of the
information collected pursuant to
clause (i). Based on such a
reassessment and by regulation, the
Secretary may discontinue the
requirement for collection of
information under such clause if the
Secretary determines that the Secretary
has adequate information from other
sources, such as qualified clinical
data registries, surgical logs, billing
systems or other practice or facility
records, and electronic health records,
in order to accurately value global
surgical services under this section.
(iii) Inspector general audit.--The
Inspector General of the Department of
Health and Human Services shall audit a
sample of the information reported
under clause (i) to verify the accuracy
of the information so reported.
(C) Improving accuracy of pricing for
surgical services.--For years beginning with
2019, the Secretary shall use the information
reported under subparagraph (B)(i) as
appropriate and other available data for the
purpose of improving the accuracy of valuation
of surgical services under the physician fee
schedule under this section.
(d) Conversion Factors.--
(1) Establishment.--
(A) In general.--The conversion factor for
each year shall be the conversion factor
established under this subsection for the
previous year (or, in the case of 1992,
specified in subparagraph (B)) adjusted by the
update (established under paragraph (3)) for
the year involved (for years before 2001) and,
for years beginning with 2001 and ending with
2025, multiplied by the update (established
under paragraph (4) or a subsequent paragraph)
for the year involved. There shall be two
separate conversion factors for each year
beginning with 2026, one for items and services
furnished by a qualifying APM participant (as
defined in section 1833(z)(2)) (referred to in
this subsection as the ``qualifying APM
conversion factor'') and the other for other
items and services (referred to in this
subsection as the ``nonqualifying APM
conversion factor''), equal to the respective
conversion factor for the previous year (or, in
the case of 2026, equal to the single
conversion factor for 2025) multiplied by the
update established under paragraph (20) for
such respective conversion factor for such
year.
(B) Special provision for 1992.--For purposes
of subparagraph (A), the conversion factor
specified in this subparagraph is a conversion
factor (determined by the Secretary) which, if
this section were to apply during 1991 using
such conversion factor, would result in the
same aggregate amount of payments under this
part for physicians' services as the estimated
aggregate amount of the payments under this
part for such services in 1991.
(C) Special rules for 1998.--Except as
provided in subparagraph (D), the single
conversion factor for 1998 under this
subsection shall be the conversion factor for
primary care services for 1997, increased by
the Secretary's estimate of the weighted
average of the three separate updates that
would otherwise occur were it not for the
enactment of chapter 1 of subtitle F of title
IV of the Balanced Budget Act of 1997.
(D) Special rules for anesthesia services.--
The separate conversion factor for anesthesia
services for a year shall be equal to 46
percent of the single conversion factor (or,
beginning with 2026, applicable conversion
factor) established for other physicians'
services, except as adjusted for changes in
work, practice expense, or malpractice relative
value units.
(E) Publication and dissemination of
information.--The Secretary shall--
(i) cause to have published in the
Federal Register not later than
November 1 of each year (beginning with
2000) the conversion factor which will
apply to physicians' services for the
succeeding year, the update determined
under paragraph (4) for such succeeding
year, and the allowed expenditures
under such paragraph for such
succeeding year; and
(ii) make available to the Medicare
Payment Advisory Commission and the
public by March 1 of each year
(beginning with 2000) an estimate of
the sustainable growth rate and of the
conversion factor which will apply to
physicians' services for the succeeding
year and data used in making such
estimate.
(3) Update for 1999 and 2000.--
(A) In general.--Unless otherwise provided by
law, subject to subparagraph (D) and the
budget-neutrality factor determined by the
Secretary under subsection (c)(2)(B)(ii), the
update to the single conversion factor
established in paragraph (1)(C) for 1999 and
2000 is equal to the product of--
(i) 1 plus the Secretary's estimate
of the percentage increase in the MEI
(as defined in section 1842(i)(3)) for
the year (divided by 100), and
(ii) 1 plus the Secretary's estimate
of the update adjustment factor for the
year (divided by 100),
minus 1 and multiplied by 100.
(B) Update adjustment factor.--For purposes
of subparagraph (A)(ii), the ``update
adjustment factor'' for a year is equal (as
estimated by the Secretary) to--
(i) the difference between (I) the
sum of the allowed expenditures for
physicians' services (as determined
under subparagraph (C)) for the period
beginning April 1, 1997, and ending on
March 31 of the year involved, and (II)
the amount of actual expenditures for
physicians' services furnished during
the period beginning April 1, 1997, and
ending on March 31 of the preceding
year; divided by
(ii) the actual expenditures for
physicians' services for the 12-month
period ending on March 31 of the
preceding year, increased by the
sustainable growth rate under
subsection (f) for the fiscal year
which begins during such 12-month
period.
(C) Determination of allowed expenditures.--
For purposes of this paragraph and paragraph
(4), the allowed expenditures for physicians'
services for the 12-month period ending with
March 31 of--
(i) 1997 is equal to the actual
expenditures for physicians' services
furnished during such 12-month period,
as estimated by the Secretary; or
(ii) a subsequent year is equal to
the allowed expenditures for
physicians' services for the previous
year, increased by the sustainable
growth rate under subsection (f) for
the fiscal year which begins during
such 12-month period.
(D) Restriction on variation from medicare
economic index.--Notwithstanding the amount of
the update adjustment factor determined under
subparagraph (B) for a year, the update in the
conversion factor under this paragraph for the
year may not be--
(i) greater than 100 times the
following amount: (1.03 + (MEI
percentage/100)) -1; or
(ii) less than 100 times the
following amount: (0.93 + (MEI
percentage/100)) -1,
where ``MEI percentage'' means the Secretary's
estimate of the percentage increase in the MEI
(as defined in section 1842(i)(3)) for the year
involved.
(4) Update for years beginning with 2001 and ending
with 2014.--
(A) In general.--Unless otherwise provided by
law, subject to the budget-neutrality factor
determined by the Secretary under subsection
(c)(2)(B)(ii) and subject to adjustment under
subparagraph (F), the update to the single
conversion factor established in paragraph
(1)(C) for a year beginning with 2001 and
ending with 2014 is equal to the product of--
(i) 1 plus the Secretary's estimate
of the percentage increase in the MEI
(as defined in section 1842(i)(3)) for
the year (divided by 100); and
(ii) 1 plus the Secretary's estimate
of the update adjustment factor under
subparagraph (B) for the year.
(B) Update adjustment factor.--For purposes
of subparagraph (A)(ii), subject to
subparagraph (D) and the succeeding paragraphs
of this subsection, the ``update adjustment
factor'' for a year is equal (as estimated by
the Secretary) to the sum of the following:
(i) Prior year adjustment
component.--An amount determined by--
(I) computing the difference
(which may be positive or
negative) between the amount of
the allowed expenditures for
physicians' services for the
prior year (as determined under
subparagraph (C)) and the
amount of the actual
expenditures for such services
for that year;
(II) dividing that difference
by the amount of the actual
expenditures for such services
for that year; and
(III) multiplying that
quotient by 0.75.
(ii) Cumulative adjustment
component.--An amount determined by--
(I) computing the difference
(which may be positive or
negative) between the amount of
the allowed expenditures for
physicians' services (as
determined under subparagraph
(C)) from April 1, 1996,
through the end of the prior
year and the amount of the
actual expenditures for such
services during that period;
(II) dividing that difference
by actual expenditures for such
services for the prior year as
increased by the sustainable
growth rate under subsection
(f) for the year for which the
update adjustment factor is to
be determined; and
(III) multiplying that
quotient by 0.33.
(C) Determination of allowed expenditures.--
For purposes of this paragraph:
(i) Period up to april 1, 1999.--The
allowed expenditures for physicians'
services for a period before April 1,
1999, shall be the amount of the
allowed expenditures for such period as
determined under paragraph (3)(C).
(ii) Transition to calendar year
allowed expenditures.--Subject to
subparagraph (E), the allowed
expenditures for--
(I) the 9-month period
beginning April 1, 1999, shall
be the Secretary's estimate of
the amount of the allowed
expenditures that would be
permitted under paragraph
(3)(C) for such period; and
(II) the year of 1999, shall
be the Secretary's estimate of
the amount of the allowed
expenditures that would be
permitted under paragraph
(3)(C) for such year.
(iii) Years beginning with 2000.--The
allowed expenditures for a year
(beginning with 2000) is equal to the
allowed expenditures for physicians'
services for the previous year,
increased by the sustainable growth
rate under subsection (f) for the year
involved.
(D) Restriction on update adjustment
factor.--The update adjustment factor
determined under subparagraph (B) for a year
may not be less than -0.07 or greater than
0.03.
(E) Recalculation of allowed expenditures for
updates beginning with 2001.--For purposes of
determining the update adjustment factor for a
year beginning with 2001, the Secretary shall
recompute the allowed expenditures for previous
periods beginning on or after April 1, 1999,
consistent with subsection (f)(3).
(F) Transitional adjustment designed to
provide for budget neutrality.--Under this
subparagraph the Secretary shall provide for an
adjustment to the update under subparagraph
(A)--
(i) for each of 2001, 2002, 2003, and
2004, of -0.2 percent; and
(ii) for 2005 of +0.8 percent.
(5) Update for 2004 and 2005.--The update to the
single conversion factor established in paragraph
(1)(C) for each of 2004 and 2005 shall be not less than
1.5 percent.
(6) Update for 2006.--The update to the single
conversion factor established in paragraph (1)(C) for
2006 shall be 0 percent.
(7) Conversion factor for 2007.--
(A) In general.--The conversion factor that
would otherwise be applicable under this
subsection for 2007 shall be the amount of such
conversion factor divided by the product of--
(i) 1 plus the Secretary's estimate
of the percentage increase in the MEI
(as defined in section 1842(i)(3)) for
2007 (divided by 100); and
(ii) 1 plus the Secretary's estimate
of the update adjustment factor under
paragraph (4)(B) for 2007.
(B) No effect on computation of conversion
factor for 2008.--The conversion factor under
this subsection shall be computed under
paragraph (1)(A) for 2008 as if subparagraph
(A) had never applied.
(8) Update for 2008.--
(A) In general.--Subject to paragraph (7)(B),
in lieu of the update to the single conversion
factor established in paragraph (1)(C) that
would otherwise apply for 2008, the update to
the single conversion factor shall be 0.5
percent.
(B) No effect on computation of conversion
factor for 2009.--The conversion factor under
this subsection shall be computed under
paragraph (1)(A) for 2009 and subsequent years
as if subparagraph (A) had never applied.
(9) Update for 2009.--
(A) In general.--Subject to paragraphs (7)(B)
and (8)(B), in lieu of the update to the single
conversion factor established in paragraph
(1)(C) that would otherwise apply for 2009, the
update to the single conversion factor shall be
1.1 percent.
(B) No effect on computation of conversion
factor for 2010 and subsequent years.--The
conversion factor under this subsection shall
be computed under paragraph (1)(A) for 2010 and
subsequent years as if subparagraph (A) had
never applied.
(10) Update for January through may of 2010.--
(A) In general.--Subject to paragraphs
(7)(B), (8)(B), and (9)(B), in lieu of the
update to the single conversion factor
established in paragraph (1)(C) that would
otherwise apply for 2010 for the period
beginning on January 1, 2010, and ending on May
31, 2010, the update to the single conversion
factor shall be 0 percent for 2010.
(B) No effect on computation of conversion
factor for remaining portion of 2010 and
subsequent years.--The conversion factor under
this subsection shall be computed under
paragraph (1)(A) for the period beginning on
June 1, 2010, and ending on December 31, 2010,
and for 2011 and subsequent years as if
subparagraph (A) had never applied.
(11) Update for june through december of 2010.--
(A) In general.--Subject to paragraphs
(7)(B), (8)(B), (9)(B), and (10)(B), in lieu of
the update to the single conversion factor
established in paragraph (1)(C) that would
otherwise apply for 2010 for the period
beginning on June 1, 2010, and ending on
December 31, 2010, the update to the single
conversion factor shall be 2.2 percent.
(B) No effect on computation of conversion
factor for 2011 and subsequent years.--The
conversion factor under this subsection shall
be computed under paragraph (1)(A) for 2011 and
subsequent years as if subparagraph (A) had
never applied.
(12) Update for 2011.--
(A) In general.--Subject to paragraphs
(7)(B), (8)(B), (9)(B), (10)(B), and (11)(B),
in lieu of the update to the single conversion
factor established in paragraph (1)(C) that
would otherwise apply for 2011, the update to
the single conversion factor shall be 0
percent.
(B) No effect on computation of conversion
factor for 2012 and subsequent years.--The
conversion factor under this subsection shall
be computed under paragraph (1)(A) for 2012 and
subsequent years as if subparagraph (A) had
never applied.
(13) Update for 2012.--
(A) In general.--Subject to paragraphs
(7)(B), (8)(B), (9)(B), (10)(B), (11)(B), and
(12)(B), in lieu of the update to the single
conversion factor established in paragraph
(1)(C) that would otherwise apply for 2012, the
update to the single conversion factor shall be
zero percent.
(B) No effect on computation of conversion
factor for 2013 and subsequent years.--The
conversion factor under this subsection shall
be computed under paragraph (1)(A) for 2013 and
subsequent years as if subparagraph (A) had
never applied.
(14) Update for 2013.--
(A) In general.--Subject to paragraphs
(7)(B), (8)(B), (9)(B), (10)(B), (11)(B),
(12)(B), and (13)(B), in lieu of the update to
the single conversion factor established in
paragraph (1)(C) that would otherwise apply for
2013, the update to the single conversion
factor for such year shall be zero percent.
(B) No effect on computation of conversion
factor for 2014 and subsequent years.--The
conversion factor under this subsection shall
be computed under paragraph (1)(A) for 2014 and
subsequent years as if subparagraph (A) had
never applied.
(15) Update for 2014.--
(A) In general.--Subject to paragraphs
(7)(B), (8)(B), (9)(B), (10)(B), (11)(B),
(12)(B), (13)(B), and (14)(B), in lieu of the
update to the single conversion factor
established in paragraph (1)(C) that would
otherwise apply for 2014, the update to the
single conversion factor shall be 0.5 percent.
(B) No effect on computation of conversion
factor for subsequent years.--The conversion
factor under this subsection shall be computed
under paragraph (1)(A) for 2015 and subsequent
years as if subparagraph (A) had never applied.
(16) Update for january through june of 2015.--
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 June 30, 2015, the update to the
single conversion factor shall be 0.0 percent.
(17) Update for july through december of 2015.--The
update to the single conversion factor established in
paragraph (1)(C) for the period beginning on July 1,
2015, and ending on December 31, 2015, shall be 0.5
percent.
(18) Update for 2016 through 2019.--The update to the
single conversion factor established in paragraph
(1)(C) for 2016 and each subsequent year through 2019
shall be 0.5 percent.
(19) Update for 2020 through 2025.--The update to the
single conversion factor established in paragraph
(1)(C) for 2020 and each subsequent year through 2025
shall be 0.0 percent.
(20) Update for 2026 and subsequent years.--For 2026
and each subsequent year, the update to the qualifying
APM conversion factor established under paragraph
(1)(A) is 0.75 percent, and the update to the
nonqualifying APM conversion factor established under
such paragraph is 0.25 percent.
(e) Geographic Adjustment Factors.--
(1) Establishment of geographic indices.--
(A) In general.--Subject to subparagraphs
(B), (C), (E), (G), (H), and (I), the Secretary
shall establish--
(i) an index which reflects the
relative costs of the mix of goods and
services comprising practice expenses
(other than malpractice expenses) in
the different fee schedule areas
compared to the national average of
such costs,
(ii) an index which reflects the
relative costs of malpractice expenses
in the different fee schedule areas
compared to the national average of
such costs, and
(iii) an index which reflects \1/4\
of the difference between the relative
value of physicians' work effort in
each of the different fee schedule
areas and the national average of such
work effort.
(B) Class-specific geographic cost-of-
practice indices.--The Secretary may establish
more than one index under subparagraph (A)(i)
in the case of classes of physicians' services,
if, because of differences in the mix of goods
and services comprising practice expenses for
the different classes of services, the
application of a single index under such clause
to different classes of such services would be
substantially inequitable.
(C) Periodic review and adjustments in
geographic adjustment factors.--The Secretary,
not less often than every 3 years, shall, in
consultation with appropriate representatives
of physicians, review the indices established
under subparagraph (A) and the geographic index
values applied under this subsection for all
fee schedule areas. Based on such review, the
Secretary may revise such index and adjust such
index values, except that, if more than 1 year
has elapsed since the date of the last previous
adjustment, the adjustment to be applied in the
first year of the next adjustment shall be \1/
2\ of the adjustment that otherwise would be
made.
(D) Use of recent data.--In establishing
indices and index values under this paragraph,
the Secretary shall use the most recent data
available relating to practice expenses,
malpractice expenses, and physician work effort
in different fee schedule areas.
(E) Floor at 1.0 on work geographic index.--
After calculating the work geographic index in
subparagraph (A)(iii), for purposes of payment
for services furnished on or after January 1,
2004, and before January 1, 2018, the Secretary
shall increase the work geographic index to
1.00 for any locality for which such work
geographic index is less than 1.00.
(G) Floor for practice expense, malpractice,
and work geographic indices for services
furnished in alaska.--For purposes of payment
for services furnished in Alaska on or after
January 1, 2004, and before January 1, 2006,
after calculating the practice expense,
malpractice, and work geographic indices in
clauses (i), (ii), and (iii) of subparagraph
(A) and in subparagraph (B), the Secretary
shall increase any such index to 1.67 if such
index would otherwise be less than 1.67. For
purposes of payment for services furnished in
the State described in the preceding sentence
on or after January 1, 2009, after calculating
the work geographic index in subparagraph
(A)(iii), the Secretary shall increase the work
geographic index to 1.5 if such index would
otherwise be less than 1.5
(H) Practice expense geographic adjustment
for 2010 and subsequent years.--
(i) For 2010.--Subject to clause
(iii), for services furnished during
2010, the employee wage and rent
portions of the practice expense
geographic index described in
subparagraph (A)(i) shall reflect \1/2\
of the difference between the relative
costs of employee wages and rents in
each of the different fee schedule
areas and the national average of such
employee wages and rents.
(ii) For 2011.--Subject to clause
(iii), for services furnished during
2011, the employee wage and rent
portions of the practice expense
geographic index described in
subparagraph (A)(i) shall reflect \1/2\
of the difference between the relative
costs of employee wages and rents in
each of the different fee schedule
areas and the national average of such
employee wages and rents.
(iii) Hold harmless.--The practice
expense portion of the geographic
adjustment factor applied in a fee
schedule area for services furnished in
2010 or 2011 shall not, as a result of
the application of clause (i) or (ii),
be reduced below the practice expense
portion of the geographic adjustment
factor under subparagraph (A)(i) (as
calculated prior to the application of
such clause (i) or (ii), respectively)
for such area for such year.
(iv) Analysis.--The Secretary shall
analyze current methods of establishing
practice expense geographic adjustments
under subparagraph (A)(i) and evaluate
data that fairly and reliably
establishes distinctions in the costs
of operating a medical practice in the
different fee schedule areas. Such
analysis shall include an evaluation of
the following:
(I) The feasibility of using
actual data or reliable survey
data developed by medical
organizations on the costs of
operating a medical practice,
including office rents and non-
physician staff wages, in
different fee schedule areas.
(II) The office expense
portion of the practice expense
geographic adjustment described
in subparagraph (A)(i),
including the extent to which
types of office expenses are
determined in local markets
instead of national markets.
(III) The weights assigned to
each of the categories within
the practice expense geographic
adjustment described in
subparagraph (A)(i).
(v) Revision for 2012 and subsequent
years.--As a result of the analysis
described in clause (iv), the Secretary
shall, not later than January 1, 2012,
make appropriate adjustments to the
practice expense geographic adjustment
described in subparagraph (A)(i) to
ensure accurate geographic adjustments
across fee schedule areas, including--
(I) basing the office rents
component and its weight on
office expenses that vary among
fee schedule areas; and
(II) considering a
representative range of
professional and non-
professional personnel employed
in a medical office based on
the use of the American
Community Survey data or other
reliable data for wage
adjustments.
Such adjustments shall be made without
regard to adjustments made pursuant to
clauses (i) and (ii) and shall be made
in a budget neutral manner.
(I) Floor for practice expense index for
services furnished in frontier states.--
(i) In general.--Subject to clause
(ii), for purposes of payment for
services furnished in a frontier State
(as defined in section
1886(d)(3)(E)(iii)(II)) on or after
January 1, 2011, after calculating the
practice expense index in subparagraph
(A)(i), the Secretary shall increase
any such index to 1.00 if such index
would otherwise be less that 1.00. The
preceding sentence shall not be applied
in a budget neutral manner.
(ii) Limitation.--This subparagraph
shall not apply to services furnished
in a State that receives a non-labor
related share adjustment under section
1886(d)(5)(H).
(2) Computation of geographic adjustment factor.--For
purposes of subsection (b)(1)(C), for all physicians'
services for each fee schedule area the Secretary shall
establish a geographic adjustment factor equal to the
sum of the geographic cost-of-practice adjustment
factor (specified in paragraph (3)), the geographic
malpractice adjustment factor (specified in paragraph
(4)), and the geographic physician work adjustment
factor (specified in paragraph (5)) for the service and
the area.
(3) Geographic cost-of-practice adjustment factor.--
For purposes of paragraph (2), the ``geographic cost-
of-practice adjustment factor'', for a service for a
fee schedule area, is the product of--
(A) the proportion of the total relative
value for the service that reflects the
relative value units for the practice expense
component, and
(B) the geographic cost-of-practice index
value for the area for the service, based on
the index established under paragraph (1)(A)(i)
or (1)(B) (as the case may be).
(4) Geographic malpractice adjustment factor.--For
purposes of paragraph (2), the ``geographic malpractice
adjustment factor'', for a service for a fee schedule
area, is the product of--
(A) the proportion of the total relative
value for the service that reflects the
relative value units for the malpractice
component, and
(B) the geographic malpractice index value
for the area, based on the index established
under paragraph (1)(A)(ii).
(5) Geographic physician work adjustment factor.--For
purposes of paragraph (2), the ``geographic physician
work adjustment factor'', for a service for a fee
schedule area, is the product of--
(A) the proportion of the total relative
value for the service that reflects the
relative value units for the work component,
and
(B) the geographic physician work index value
for the area, based on the index established
under paragraph (1)(A)(iii).
(6) Use of msas as fee schedule areas in
california.--
(A) In general.--Subject to the succeeding
provisions of this paragraph and
notwithstanding the previous provisions of this
subsection, for services furnished on or after
January 1, 2017, the fee schedule areas used
for payment under this section applicable to
California shall be the following:
(i) Each Metropolitan Statistical
Area (each in this paragraph referred
to as an ``MSA''), as defined by the
Director of the Office of Management
and Budget as of December 31 of the
previous year, shall be a fee schedule
area.
(ii) All areas not included in an MSA
shall be treated as a single rest-of-
State fee schedule area.
(B) Transition for msas previously in rest-
of-state payment locality or in locality 3.--
(i) In general.--For services
furnished in California during a year
beginning with 2017 and ending with
2021 in an MSA in a transition area (as
defined in subparagraph (D)), subject
to subparagraph (C), the geographic
index values to be applied under this
subsection for such year shall be equal
to the sum of the following:
(I) Current law component.--
The old weighting factor
(described in clause (ii)) for
such year multiplied by the
geographic index values under
this subsection for the fee
schedule area that included
such MSA that would have
applied in such area (as
estimated by the Secretary) if
this paragraph did not apply.
(II) MSA-based component.--
The MSA-based weighting factor
(described in clause (iii)) for
such year multiplied by the
geographic index values
computed for the fee schedule
area under subparagraph (A) for
the year (determined without
regard to this subparagraph).
(ii) Old weighting factor.--The old
weighting factor described in this
clause--
(I) for 2017, is \5/6\; and
(II) for each succeeding
year, is the old weighting
factor described in this clause
for the previous year minus \1/
6\.
(iii) MSA-based weighting factor.--
The MSA-based weighting factor
described in this clause for a year is
1 minus the old weighting factor under
clause (ii) for that year.
(C) Hold harmless.--For services furnished in
a transition area in California during a year
beginning with 2017, the geographic index
values to be applied under this subsection for
such year shall not be less than the
corresponding geographic index values that
would have applied in such transition area (as
estimated by the Secretary) if this paragraph
did not apply.
(D) Transition area defined.--In this
paragraph, the term ``transition area'' means
each of the following fee schedule areas for
2013:
(i) The rest-of-State payment
locality.
(ii) Payment locality 3.
(E) References to fee schedule areas.--
Effective for services furnished on or after
January 1, 2017, for California, any reference
in this section to a fee schedule area shall be
deemed a reference to a fee schedule area
established in accordance with this paragraph.
(f) Sustainable Growth Rate.--
(1) Publication.--The Secretary shall cause to have
published in the Federal Register not later than--
(A) November 1, 2000, the sustainable growth
rate for 2000 and 2001; and
(B) November 1 of each succeeding year
through 2014 the sustainable growth rate for
such succeeding year and each of the preceding
2 years.
(2) Specification of growth rate.--The sustainable
growth rate for all physicians' services for a fiscal
year (beginning with fiscal year 1998 and ending with
fiscal year 2000) and a year beginning with 2000 and
ending with 2014 shall be equal to the product of--
(A) 1 plus the Secretary's estimate of the
weighted average percentage increase (divided
by 100) in the fees for all physicians'
services in the applicable period involved,
(B) 1 plus the Secretary's estimate of the
percentage change (divided by 100) in the
average number of individuals enrolled under
this part (other than Medicare+Choice plan
enrollees) from the previous applicable period
to the applicable period involved,
(C) 1 plus the Secretary's estimate of the
annual average percentage growth in real gross
domestic product per capita (divided by 100)
during the 10-year period ending with the
applicable period involved, and
(D) 1 plus the Secretary's estimate of the
percentage change (divided by 100) in
expenditures for all physicians' services in
the applicable period (compared with the
previous applicable period) which will result
from changes in law and regulations, determined
without taking into account estimated changes
in expenditures resulting from the update
adjustment factor determined under subsection
(d)(3)(B) or (d)(4)(B), as the case may be,
minus 1 and multiplied by 100.
(3) Data to be used.--For purposes of determining the
update adjustment factor under subsection (d)(4)(B) for
a year beginning with 2001, the sustainable growth
rates taken into consideration in the determination
under paragraph (2) shall be determined as follows:
(A) For 2001.--For purposes of such
calculations for 2001, the sustainable growth
rates for fiscal year 2000 and the years 2000
and 2001 shall be determined on the basis of
the best data available to the Secretary as of
September 1, 2000.
(B) For 2002.--For purposes of such
calculations for 2002, the sustainable growth
rates for fiscal year 2000 and for years 2000,
2001, and 2002 shall be determined on the basis
of the best data available to the Secretary as
of September 1, 2001.
(C) For 2003 and succeeding years.--For
purposes of such calculations for a year after
2002--
(i) the sustainable growth rates for
that year and the preceding 2 years
shall be determined on the basis of the
best data available to the Secretary as
of September 1 of the year preceding
the year for which the calculation is
made; and
(ii) the sustainable growth rate for
any year before a year described in
clause (i) shall be the rate as most
recently determined for that year under
this subsection.
Nothing in this paragraph shall be construed as
affecting the sustainable growth rates established for
fiscal year 1998 or fiscal year 1999.
(4) Definitions.--In this subsection:
(A) Services included in physicians'
services.--The term ``physicians' services''
includes other items and services (such as
clinical diagnostic laboratory tests and
radiology services), specified by the
Secretary, that are commonly performed or
furnished by a physician or in a physician's
office, but does not include services furnished
to a Medicare+Choice plan enrollee.
(B) Medicare+choice plan enrollee.--The term
``Medicare+Choice plan enrollee'' means, with
respect to a fiscal year, an individual
enrolled under this part who has elected to
receive benefits under this title for the
fiscal year through a Medicare+Choice plan
offered under part C, and also includes an
individual who is receiving benefits under this
part through enrollment with an eligible
organization with a risk-sharing contract under
section 1876.
(C) Applicable period.--The term ``applicable
period'' means--
(i) a fiscal year, in the case of
fiscal year 1998, fiscal year 1999, and
fiscal year 2000; or
(ii) a calendar year with respect to
a year beginning with 2000;
as the case may be.
(g) Limitation on Beneficiary Liability.--
(1) Limitation on actual charges.--
(A) In general.--In the case of a
nonparticipating physician or nonparticipating
supplier or other person (as defined in section
1842(i)(2)) who does not accept payment on an
assignment-related basis for a physician's
service furnished with respect to an individual
enrolled under this part, the following rules
apply:
(i) Application of limiting charge.--
No person may bill or collect an actual
charge for the service in excess of the
limiting charge described in paragraph
(2) for such service.
(ii) No liability for excess
charges.--No person is liable for
payment of any amounts billed for the
service in excess of such limiting
charge.
(iii) Correction of excess charges.--
If such a physician, supplier, or other
person bills, but does not collect, an
actual charge for a service in
violation of clause (i), the physician,
supplier, or other person shall reduce
on a timely basis the actual charge
billed for the service to an amount not
to exceed the limiting charge for the
service.
(iv) Refund of excess collections.--
If such a physician, supplier, or other
person collects an actual charge for a
service in violation of clause (i), the
physician, supplier, or other person
shall provide on a timely basis a
refund to the individual charged in the
amount by which the amount collected
exceeded the limiting charge for the
service. The amount of such a refund
shall be reduced to the extent the
individual has an outstanding balance
owed by the individual to the
physician.
(B) Sanctions.--If a physician, supplier, or
other person--
(i) knowingly and willfully bills or
collects for services in violation of
subparagraph (A)(i) on a repeated
basis, or
(ii) fails to comply with clause
(iii) or (iv) of subparagraph (A) on a
timely basis,
the Secretary may apply sanctions against the
physician, supplier, or other person in
accordance with paragraph (2) of section
1842(j). In applying this subparagraph,
paragraph (4) of such section applies in the
same manner as such paragraph applies to such
section and any reference in such section to a
physician is deemed also to include a reference
to a supplier or other person under this
subparagraph.
(C) Timely basis.--For purposes of this
paragraph, a correction of a bill for an excess
charge or refund of an amount with respect to a
violation of subparagraph (A)(i) in the case of
a service is considered to be provided ``on a
timely basis'', if the reduction or refund is
made not later than 30 days after the date the
physician, supplier, or other person is
notified by the carrier under this part of such
violation and of the requirements of
subparagraph (A).
(2) Limiting charge defined.--
(A) For 1991.--For physicians' services of a
physician furnished during 1991, other than
radiologist services subject to section
1834(b), the ``limiting charge'' shall be the
same percentage (or, if less, 25 percent) above
the recognized payment amount under this part
with respect to the physician (as a
nonparticipating physician) as the percentage
by which--
(i) the maximum allowable actual
charge (as determined under section
1842(j)(1)(C) as of December 31, 1990,
or, if less, the maximum actual charge
otherwise permitted for the service
under this part as of such date) for
the service of the physician, exceeds
(ii) the recognized payment amount
for the service of the physician (as a
nonparticipating physician) as of such
date.
In the case of evaluation and management services (as specified
in section 1842(b)(16)(B)(ii)), the preceding sentence shall be
applied by substituting ``40 percent'' for ``25 percent''.
(B) For 1992.--For physicians' services
furnished during 1992, other than radiologist
services subject to section 1834(b), the
``limiting charge'' shall be the same
percentage (or, if less, 20 percent) above the
recognized payment amount under this part for
nonparticipating physicians as the percentage
by which--
(i) the limiting charge (as
determined under subparagraph (A) as of
December 31, 1991) for the service,
exceeds
(ii) the recognized payment amount
for the service for nonparticipating
physicians as of such date.
(C) After 1992.--For physicians' services
furnished in a year after 1992, the ``limiting
charge'' shall be 115 percent of the recognized
payment amount under this part for
nonparticipating physicians or for
nonparticipating suppliers or other persons.
(D) Recognized payment amount.--In this
section, the term ``recognized payment amount''
means, for services furnished on or after
January 1, 1992, the fee schedule amount
determined under subsection (a) (or, if payment
under this part is made on a basis other than
the fee schedule under this section, 95 percent
of the other payment basis), and, for services
furnished during 1991, the applicable
percentage (as defined in section
1842(b)(4)(A)(iv)) of the prevailing charge (or
fee schedule amount) for nonparticipating
physicians for that year.
(3) Limitation on charges for medicare beneficiaries
eligible for medicaid benefits.--
(A) In general.--Payment for physicians'
services furnished on or after April 1, 1990,
to an individual who is enrolled under this
part and eligible for any medical assistance
(including as a qualified medicare beneficiary,
as defined in section 1905(p)(1)) with respect
to such services under a State plan approved
under title XIX may only be made on an
assignment-related basis and the provisions of
section 1902(n)(3)(A) apply to further limit
permissible charges under this section.
(B) Penalty.--A person may not bill for
physicians' services subject to subparagraph
(A) other than on an assignment-related basis.
No person is liable for payment of any amounts
billed for such a service in violation of the
previous sentence. If a person knowingly and
willfully bills for physicians' services in
violation of the first sentence, the Secretary
may apply sanctions against the person in
accordance with section 1842(j)(2).
(4) Physician submission of claims.--
(A) In general.--For services furnished on or
after September 1, 1990, within 1 year after
the date of providing a service for which
payment is made under this part on a reasonable
charge or fee schedule basis, a physician,
supplier, or other person (or an employer or
facility in the cases described in section
1842(b)(6)(A))--
(i) shall complete and submit a claim
for such service on a standard claim
form specified by the Secretary to the
carrier on behalf of a beneficiary, and
(ii) may not impose any charge
relating to completing and submitting
such a form.
(B) Penalty.--(i) With respect to an assigned
claim wherever a physician, provider, supplier
or other person (or an employer or facility in
the cases described in section 1842(b)(6)(A))
fails to submit such a claim as required in
subparagraph (A), the Secretary shall reduce by
10 percent the amount that would otherwise be
paid for such claim under this part.
(ii) If a physician, supplier, or other
person (or an employer or facility in the cases
described in section 1842(b)(6)(A)) fails to
submit a claim required to be submitted under
subparagraph (A) or imposes a charge in
violation of such subparagraph, the Secretary
shall apply the sanction with respect to such a
violation in the same manner as a sanction may
be imposed under section 1842(p)(3) for a
violation of section 1842(p)(1).
(5) Electronic billing; direct deposit.--The
Secretary shall encourage and develop a system
providing for expedited payment for claims submitted
electronically. The Secretary shall also encourage and
provide incentives allowing for direct deposit as
payments for services furnished by participating
physicians. The Secretary shall provide physicians with
such technical information as necessary to enable such
physicians to submit claims electronically. The
Secretary shall submit a plan to Congress on this
paragraph by May 1, 1990.
(6) Monitoring of charges.--
(A) In general.--The Secretary shall
monitor--
(i) the actual charges of
nonparticipating physicians for
physicians' services furnished on or
after January 1, 1991, to individuals
enrolled under this part, and
(ii) changes (by specialty, type of
service, and geographic area) in (I)
the proportion of expenditures for
physicians' services provided under
this part by participating physicians,
(II) the proportion of expenditures for
such services for which payment is made
under this part on an assignment-
related basis, and (III) the amounts
charged above the recognized payment
amounts under this part.
(B) Report.--The Secretary shall, by not
later than April 15 of each year (beginning in
1992), report to the Congress information on
the extent to which actual charges exceed
limiting charges, the number and types of
services involved, and the average amount of
excess charges and information regarding the
changes described in subparagraph (A)(ii).
(C) Plan.--If the Secretary finds that there
has been a significant decrease in the
proportions described in subclauses (I) and
(II) of subparagraph (A)(ii) or an increase in
the amounts described in subclause (III) of
that subparagraph, the Secretary shall develop
a plan to address such a problem and transmit
to Congress recommendations regarding the plan.
The Medicare Payment Advisory Commission shall
review the Secretary's plan and recommendations
and transmit to Congress its comments regarding
such plan and recommendations.
(7) Monitoring of utilization and access.--
(A) In general.--The Secretary shall
monitor--
(i) changes in the utilization of and
access to services furnished under this
part within geographic, population, and
service related categories,
(ii) possible sources of
inappropriate utilization of services
furnished under this part which
contribute to the overall level of
expenditures under this part, and
(iii) factors underlying these
changes and their interrelationships.
(B) Report.--The Secretary shall by not later
than April 15, of each year (beginning with
1991) report to the Congress on the changes
described in subparagraph (A)(i) and shall
include in the report an examination of the
factors (including factors relating to
different services and specific categories and
groups of services and geographic and
demographic variations in utilization) which
may contribute to such changes.
(C) Recommendations.--The Secretary shall
include in each annual report under
subparagraph (B) recommendations--
(i) addressing any identified
patterns of inappropriate utilization,
(ii) on utilization review,
(iii) on physician education or
patient education,
(iv) addressing any problems of
beneficiary access to care made evident
by the monitoring process, and
(v) on such other matters as the
Secretary deems appropriate.
The Medicare Payment Advisory Commission shall
comment on the Secretary's recommendations and
in developing its comments, the Commission
shall convene and consult a panel of physician
experts to evaluate the implications of medical
utilization patterns for the quality of and
access to patient care.
(h) Sending Information to Physicians.--Before the beginning
of each year (beginning with 1992), the Secretary shall send to
each physician or nonparticipating supplier or other person
furnishing physicians' services (as defined in section
1848(j)(3)) furnishing physicians' services under this part,
for services commonly performed by the physician, supplier, or
other person, information on fee schedule amounts that apply
for the year in the fee schedule area for participating and
non-participating physicians, and the maximum amount that may
be charged consistent with subsection (g)(2). Such information
shall be transmitted in conjunction with notices to physicians,
suppliers, and other persons under section 1842(h) (relating to
the participating physician program) for a year.
(i) Miscellaneous Provisions.--
(1) Restriction on administrative and judicial
review.--There shall be no administrative or judicial
review under section 1869 or otherwise of--
(A) the determination of the adjusted
historical payment basis (as defined in
subsection (a)(2)(D)(i)),
(B) the determination of relative values and
relative value units under subsection (c),
including adjustments under subsections
(c)(2)(F), (c)(2)(H), and (c)(2)(I) and section
13515(b) of the Omnibus Budget Reconciliation
Act of 1993,
(C) the determination of conversion factors
under subsection (d), including without
limitation a prospective redetermination of the
sustainable growth rates for any or all
previous fiscal years,
(D) the establishment of geographic
adjustment factors under subsection (e),
(E) the establishment of the system for the
coding of physicians' services under this
section, and
(F) the collection and use of information in
the determination of relative values under
subsection (c)(2)(M).
(2) Assistants-at-surgery.--
(A) In general.--Subject to subparagraph (B),
in the case of a surgical service furnished by
a physician, if payment is made separately
under this part for the services of a physician
serving as an assistant-at-surgery, the fee
schedule amount shall not exceed 16 percent of
the fee schedule amount otherwise determined
under this section for the global surgical
service involved.
(B) Denial of payment in certain cases.--If
the Secretary determines, based on the most
recent data available, that for a surgical
procedure (or class of surgical procedures) the
national average percentage of such procedure
performed under this part which involve the use
of a physician as an assistant at surgery is
less than 5 percent, no payment may be made
under this part for services of an assistant at
surgery involved in the procedure.
(3) No comparability adjustment.--For physicians'
services for which payment under this part is
determined under this section--
(A) a carrier may not make any adjustment in
the payment amount under section 1842(b)(3)(B)
on the basis that the payment amount is higher
than the charge applicable, for comparable
services and under comparable circumstances, to
the policyholders and subscribers of the
carrier,
(B) no payment adjustment may be made under
section 1842(b)(8), and
(C) section 1842(b)(9) shall not apply.
(j) Definitions.--In this section:
(1) Category.--For services furnished before January
1, 1998, the term ``category'' means, with respect to
physicians' services, surgical services (as defined by
the Secretary and including anesthesia services),
primary care services (as defined in section
1842(i)(4)), and all other physicians' services. The
Secretary shall define surgical services and publish
such definitions in the Federal Register no later than
May 1, 1990, after consultation with organizations
representing physicians.
(2) Fee schedule area.--Except as provided in
subsection (e)(6)(D), the term ``fee schedule area''
means a locality used under section 1842(b) for
purposes of computing payment amounts for physicians'
services.
(3) Physicians' services.--The term ``physicians'
services'' includes items and services described in
paragraphs (1), (2)(A), (2)(D), (2)(G), (2)(P) (with
respect to services described in subparagraphs (A) and
(C) of section 1861(oo)(2)), (2)(R) (with respect to
services described in suparagraphs (B), (C), and (D) of
section 1861(pp)(1)), (2)(S), (2)(W), (2)(AA), (2)(DD),
(2)(EE), (2)(FF) (including administration of the
health risk assessment), (3), (4), (13), (14) (with
respect to services described in section 1861(nn)(2)),
and (15) of section 1861(s) (other than clinical
diagnostic laboratory tests and, except for purposes of
subsection (a)(3), (g), and (h) such other items and
services as the Secretary may specify).
(4) Practice expenses.--The term ``practice
expenses'' includes all expenses for furnishing
physicians' services, excluding malpractice expenses,
physician compensation, and other physician fringe
benefits.
(k) Quality Reporting System.--
(1) In general.--The Secretary shall implement a
system for the reporting by eligible professionals of
data on quality measures specified under paragraph (2).
Such data shall be submitted in a form and manner
specified by the Secretary (by program instruction or
otherwise), which may include submission of such data
on claims under this part.
(2) Use of consensus-based quality measures.--
(A) For 2007.--
(i) In general.--For purposes of
applying this subsection for the
reporting of data on quality measures
for covered professional services
furnished during the period beginning
July 1, 2007, and ending December 31,
2007, the quality measures specified
under this paragraph are the measures
identified as 2007 physician quality
measures under the Physician Voluntary
Reporting Program as published on the
public website of the Centers for
Medicare & Medicaid Services as of the
date of the enactment of this
subsection, except as may be changed by
the Secretary based on the results of a
consensus-based process in January of
2007, if such change is published on
such website by not later than April 1,
2007.
(ii) Subsequent refinements in
application permitted.--The Secretary
may, from time to time (but not later
than July 1, 2007), publish on such
website (without notice or opportunity
for public comment) modifications or
refinements (such as code additions,
corrections, or revisions) for the
application of quality measures
previously published under clause (i),
but may not, under this clause, change
the quality measures under the
reporting system.
(iii) Implementation.--
Notwithstanding any other provision of
law, the Secretary may implement by
program instruction or otherwise this
subsection for 2007.
(B) For 2008 and 2009.--
(i) In general.--For purposes of
reporting data on quality measures for
covered professional services furnished
during 2008 and 2009, the quality
measures specified under this paragraph
for covered professional services shall
be measures that have been adopted or
endorsed by a consensus organization
(such as the National Quality Forum or
AQA), that include measures that have
been submitted by a physician
specialty, and that the Secretary
identifies as having used a consensus-
based process for developing such
measures. Such measures shall include
structural measures, such as the use of
electronic health records and
electronic prescribing technology.
(ii) Proposed set of measures.--Not
later than August 15 of each of 2007
and 2008, the Secretary shall publish
in the Federal Register a proposed set
of quality measures that the Secretary
determines are described in clause (i)
and would be appropriate for eligible
professionals to use to submit data to
the Secretary in 2008 or 2009, as
applicable. The Secretary shall provide
for a period of public comment on such
set of measures.
(iii) Final set of measures.--Not
later than November 15 of each of 2007
and 2008, the Secretary shall publish
in the Federal Register a final set of
quality measures that the Secretary
determines are described in clause (i)
and would be appropriate for eligible
professionals to use to submit data to
the Secretary in 2008 or 2009, as
applicable.
(C) For 2010 and subsequent years.--
(i) In general.--Subject to clause
(ii), for purposes of reporting data on
quality measures for covered
professional services furnished during
2010 and each subsequent year, subject
to subsection (m)(3)(C), the quality
measures (including electronic
prescribing quality measures) specified
under this paragraph shall be such
measures selected by the Secretary from
measures that have been endorsed by the
entity with a contract with the
Secretary under section 1890(a).
(ii) Exception.--In the case of a
specified area or medical topic
determined appropriate by the Secretary
for which a feasible and practical
measure has not been endorsed by the
entity with a contract under section
1890(a), the Secretary may specify a
measure that is not so endorsed as long
as due consideration is given to
measures that have been endorsed or
adopted by a consensus organization
identified by the Secretary, such as
the AQA alliance.
(D) Opportunity to provide input on measures
for 2009 and subsequent years.--For each
quality measure (including an electronic
prescribing quality measure) adopted by the
Secretary under subparagraph (B) (with respect
to 2009) or subparagraph (C), the Secretary
shall ensure that eligible professionals have
the opportunity to provide input during the
development, endorsement, or selection of
measures applicable to services they furnish.
(3) Covered professional services and eligible
professionals defined.--For purposes of this
subsection:
(A) Covered professional services.--The term
``covered professional services'' means
services for which payment is made under, or is
based on, the fee schedule established under
this section and which are furnished by an
eligible professional.
(B) Eligible professional.--The term
``eligible professional'' means any of the
following:
(i) A physician.
(ii) A practitioner described in
section 1842(b)(18)(C).
(iii) A physical or occupational
therapist or a qualified speech-
language pathologist.
(iv) Beginning with 2009, a qualified
audiologist (as defined in section
1861(ll)(3)(B)).
(4) Use of registry-based reporting.--As part of the
publication of proposed and final quality measures for
2008 under clauses (ii) and (iii) of paragraph (2)(B),
the Secretary shall address a mechanism whereby an
eligible professional may provide data on quality
measures through an appropriate medical registry (such
as the Society of Thoracic Surgeons National Database)
or through a Maintenance of Certification program
operated by a specialty body of the American Board of
Medical Specialties that meets the criteria for such a
registry, as identified by the Secretary.
(5) Identification units.--For purposes of applying
this subsection, the Secretary may identify eligible
professionals through billing units, which may include
the use of the Provider Identification Number, the
unique physician identification number (described in
section 1833(q)(1)), the taxpayer identification
number, or the National Provider Identifier. For
purposes of applying this subsection for 2007, the
Secretary shall use the taxpayer identification number
as the billing unit.
(6) Education and outreach.--The Secretary shall
provide for education and outreach to eligible
professionals on the operation of this subsection.
(7) Limitations on review.--There shall be no
administrative or judicial review under section 1869,
section 1878, or otherwise, of the development and
implementation of the reporting system under paragraph
(1), including identification of quality measures under
paragraph (2) and the application of paragraphs (4) and
(5).
(8) Implementation.--The Secretary shall carry out
this subsection acting through the Administrator of the
Centers for Medicare & Medicaid Services.
(9) Continued application for purposes of mips and
for certain professionals volunteering to report.--The
Secretary shall, in accordance with subsection
(q)(1)(F), carry out the provisions of this
subsection--
(A) for purposes of subsection (q); and
(B) for eligible professionals who are not
MIPS eligible professionals (as defined in
subsection (q)(1)(C)) for the year involved.
(l) Physician Assistance and Quality Initiative Fund.--
(1) Establishment.--The Secretary shall establish
under this subsection a Physician Assistance and
Quality Initiative Fund (in this subsection referred to
as the ``Fund'') which shall be available to the
Secretary for physician payment and quality improvement
initiatives, which may include application of an
adjustment to the update of the conversion factor under
subsection (d).
(2) Funding.--
(A) Amount available.--
(i) In general.--Subject to clause
(ii), there shall be available to the
Fund the following amounts:
(I) For expenditures during
2008, an amount equal to
$150,500,000.
(II) For expenditures during
2009, an amount equal to
$24,500,000.
(ii) Limitations on expenditures.--
(I) 2008.--The amount
available for expenditures
during 2008 shall be reduced as
provided by subparagraph (A) of
section 225(c)(1) and section
524 of the Departments of
Labor, Health and Human
Services, and Education, and
Related Agencies Appropriations
Act, 2008 (division G of the
Consolidated Appropriations
Act, 2008).
(II) 2009.--The amount
available for expenditures
during 2009 shall be reduced as
provided by subparagraph (B) of
such section 225(c)(1).
(B) Timely obligation of all available funds
for services.--The Secretary shall provide for
expenditures from the Fund in a manner designed
to provide (to the maximum extent feasible) for
the obligation of the entire amount available
for expenditures, after application of
subparagraph (A)(ii), during--
(i) 2008 for payment with respect to
physicians' services furnished during
2008; and
(ii) 2009 for payment with respect to
physicians' services furnished during
2009.
(C) Payment from trust fund.--The amount
specified in subparagraph (A) shall be
available to the Fund, as expenditures are made
from the Fund, from the Federal Supplementary
Medical Insurance Trust Fund under section
1841.
(D) Funding limitation.--Amounts in the Fund
shall be available in advance of appropriations
in accordance with subparagraph (B) but only if
the total amount obligated from the Fund does
not exceed the amount available to the Fund
under subparagraph (A). The Secretary may
obligate funds from the Fund only if the
Secretary determines (and the Chief Actuary of
the Centers for Medicare & Medicaid Services
and the appropriate budget officer certify)
that there are available in the Fund sufficient
amounts to cover all such obligations incurred
consistent with the previous sentence.
(E) Construction.--In the case that
expenditures from the Fund are applied to, or
otherwise affect, a conversion factor under
subsection (d) for a year, the conversion
factor under such subsection shall be computed
for a subsequent year as if such application or
effect had never occurred.
(m) Incentive Payments for Quality Reporting.--
(1) Incentive payments.--
(A) In general.--For 2007 through 2014, with
respect to covered professional services
furnished during a reporting period by an
eligible professional, if--
(i) there are any quality measures
that have been established under the
physician reporting system that are
applicable to any such services
furnished by such professional for such
reporting period;
(ii) the eligible professional
satisfactorily submits (as determined
under this subsection) to the Secretary
data on such quality measures in
accordance with such reporting system
for such reporting period,
in addition to the amount otherwise paid under
this part, there also shall be paid to the
eligible professional (or to an employer or
facility in the cases described in clause (A)
of section 1842(b)(6)) or, in the case of a
group practice under paragraph (3)(C), to the
group practice, from the Federal Supplementary
Medical Insurance Trust Fund established under
section 1841 an amount equal to the applicable
quality percent of the Secretary's estimate
(based on claims submitted not later than 2
months after the end of the reporting period)
of the allowed charges under this part for all
such covered professional services furnished by
the eligible professional (or, in the case of a
group practice under paragraph (3)(C), by the
group practice) during the reporting period.
(B) Applicable quality percent.--For purposes
of subparagraph (A), the term ``applicable
quality percent'' means--
(i) for 2007 and 2008, 1.5 percent;
and
(ii) for 2009 and 2010, 2.0 percent;
(iii) for 2011, 1.0 percent; and
(iv) for 2012, 2013, and 2014, 0.5
percent.
(2) Incentive payments for electronic prescribing.--
(A) In general.--Subject to subparagraph (D),
for 2009 through 2013, with respect to covered
professional services furnished during a
reporting period by an eligible professional,
if the eligible professional is a successful
electronic prescriber for such reporting
period, in addition to the amount otherwise
paid under this part, there also shall be paid
to the eligible professional (or to an employer
or facility in the cases described in clause
(A) of section 1842(b)(6)) or, in the case of a
group practice under paragraph (3)(C), to the
group practice, from the Federal Supplementary
Medical Insurance Trust Fund established under
section 1841 an amount equal to the applicable
electronic prescribing percent of the
Secretary's estimate (based on claims submitted
not later than 2 months after the end of the
reporting period) of the allowed charges under
this part for all such covered professional
services furnished by the eligible professional
(or, in the case of a group practice under
paragraph (3)(C), by the group practice) during
the reporting period.
(B) Limitation with respect to electronic
prescribing quality measures.--The provisions
of this paragraph and subsection (a)(5) shall
not apply to an eligible professional (or, in
the case of a group practice under paragraph
(3)(C), to the group practice) if, for the
reporting period (or, for purposes of
subsection (a)(5), for the reporting period for
a year)--
(i) the allowed charges under this
part for all covered professional
services furnished by the eligible
professional (or group, as applicable)
for the codes to which the electronic
prescribing quality measure applies (as
identified by the Secretary and
published on the Internet website of
the Centers for Medicare & Medicaid
Services as of January 1, 2008, and as
subsequently modified by the Secretary)
are less than 10 percent of the total
of the allowed charges under this part
for all such covered professional
services furnished by the eligible
professional (or the group, as
applicable); or
(ii) if determined appropriate by the
Secretary, the eligible professional
does not submit (including both
electronically and nonelectronically) a
sufficient number (as determined by the
Secretary) of prescriptions under part
D.
If the Secretary makes the determination to
apply clause (ii) for a period, then clause (i)
shall not apply for such period.
(C) Applicable electronic prescribing
percent.--For purposes of subparagraph (A), the
term ``applicable electronic prescribing
percent'' means--
(i) for 2009 and 2010, 2.0 percent;
(ii) for 2011 and 2012, 1.0 percent;
and
(iii) for 2013, 0.5 percent.
(D) Limitation with respect to ehr incentive
payments.--The provisions of this paragraph
shall not apply to an eligible professional
(or, in the case of a group practice under
paragraph (3)(C), to the group practice) if,
for the EHR reporting period the eligible
professional (or group practice) receives an
incentive payment under subsection (o)(1)(A)
with respect to a certified EHR technology (as
defined in subsection (o)(4)) that has the
capability of electronic prescribing.
(3) Satisfactory reporting and successful electronic
prescriber and described.--
(A) In general.--For purposes of paragraph
(1), an eligible professional shall be treated
as satisfactorily submitting data on quality
measures for covered professional services for
a reporting period (or, for purposes of
subsection (a)(8), for the quality reporting
period for the year) if quality measures have
been reported as follows:
(i) Three or fewer quality measures
applicable.--If there are no more than
3 quality measures that are provided
under the physician reporting system
and that are applicable to such
services of such professional furnished
during the period, each such quality
measure has been reported under such
system in at least 80 percent of the
cases in which such measure is
reportable under the system.
(ii) Four or more quality measures
applicable.--If there are 4 or more
quality measures that are provided
under the physician reporting system
and that are applicable to such
services of such professional
furnishedduring the period, at least 3
such quality measures have been
reported under such system in at least
80 percent of the cases in which the
respective measure is reportable under
the system.
For years after 2008, quality measures for
purposes of this subparagraph shall not include
electronic prescribing quality measures.
(B) Successful electronic prescriber.--
(i) In general.--For purposes of
paragraph (2) and subsection (a)(5), an
eligible professional shall be treated
as a successful electronic prescriber
for a reporting period (or, for
purposes of subsection (a)(5), for the
reporting period for a year) if the
eligible professional meets the
requirement described in clause (ii),
or, if the Secretary determines
appropriate, the requirement described
in clause (iii). If the Secretary makes
the determination under the preceding
sentence to apply the requirement
described in clause (iii) for a period,
then the requirement described in
clause (ii) shall not apply for such
period.
(ii) Requirement for submitting data
on electronic prescribing quality
measures.--The requirement described in
this clause is that, with respect to
covered professional services furnished
by an eligible professional during a
reporting period (or, for purposes of
subsection (a)(5), for the reporting
period for a year), if there are any
electronic prescribing quality measures
that have been established under the
physician reporting system and are
applicable to any such services
furnished by such professional for the
period, such professional reported each
such measure under such system in at
least 50 percent of the cases in which
such measure is reportable by such
professional under such system.
(iii) Requirement for electronically
prescribing under part d.--The
requirement described in this clause is
that the eligible professional
electronically submitted a sufficient
number (as determined by the Secretary)
of prescriptions under part D during
the reporting period (or, for purposes
of subsection (a)(5), for the reporting
period for a year).
(iv) Use of part d data.--
Notwithstanding sections 1860D-
15(d)(2)(B) and 1860D-15(f)(2), the
Secretary may use data regarding drug
claims submitted for purposes of
section 1860D-15 that are necessary for
purposes of clause (iii), paragraph
(2)(B)(ii), and paragraph (5)(G).
(v) Standards for electronic
prescribing.--To the extent
practicable, in determining whether
eligible professionals meet the
requirements under clauses (ii) and
(iii) for purposes of clause (i), the
Secretary shall ensure that eligible
professionals utilize electronic
prescribing systems in compliance with
standards established for such systems
pursuant to the Part D Electronic
Prescribing Program under section
1860D-4(e).
(C) Satisfactory reporting measures for group
practices.--
(i) In general.--By January 1, 2010,
the Secretary shall establish and have
in place a process under which eligible
professionals in a group practice (as
defined by the Secretary) shall be
treated as satisfactorily submitting
data on quality measures under
subparagraph (A) and as meeting the
requirement described in subparagraph
(B)(ii) for covered professional
services for a reporting period (or,
for purposes of subsection (a)(5), for
a reporting period for a year, or, for
purposes of subsection (a)(8), for a
quality reporting period for the year)
if, in lieu of reporting measures under
subsection (k)(2)(C), the group
practice reports measures determined
appropriate by the Secretary, such as
measures that target high-cost chronic
conditions and preventive care, in a
form and manner, and at a time,
specified by the Secretary.
(ii) Statistical sampling model.--The
process under clause (i) shall provide
and, for 2016 and subsequent years, may
provide for the use of a statistical
sampling model to submit data on
measures, such as the model used under
the Physician Group Practice
demonstration project under section
1866A.
(iii) No double payments.--Payments
to a group practice under this
subsection by reason of the process
under clause (i) shall be in lieu of
the payments that would otherwise be
made under this subsection to eligible
professionals in the group practice for
satisfactorily submitting data on
quality measures.
(D) Satisfactory reporting measures through
participation in a qualified clinical data
registry.--For 2014 and subsequent years, the
Secretary shall treat an eligible professional
as satisfactorily submitting data on quality
measures under subparagraph (A) and, for 2016
and subsequent years, subparagraph (A) or (C)
if, in lieu of reporting measures under
subsection (k)(2)(C), the eligible professional
is satisfactorily participating, as determined
by the Secretary, in a qualified clinical data
registry (as described in subparagraph (E)) for
the year.
(E) Qualified clinical data registry.--
(i) In general.--The Secretary shall
establish requirements for an entity to
be considered a qualified clinical data
registry. Such requirements shall
include a requirement that the entity
provide the Secretary with such
information, at such times, and in such
manner, as the Secretary determines
necessary to carry out this subsection.
(ii) Considerations.--In establishing
the requirements under clause (i), the
Secretary shall consider whether an
entity--
(I) has in place mechanisms
for the transparency of data
elements and specifications,
risk models, and measures;
(II) requires the submission
of data from participants with
respect to multiple payers;
(III) provides timely
performance reports to
participants at the individual
participant level; and
(IV) supports quality
improvement initiatives for
participants.
(iii) Measures.--With respect to
measures used by a qualified clinical
data registry--
(I) sections 1890(b)(7) and
1890A(a) shall not apply; and
(II) measures endorsed by the
entity with a contract with the
Secretary under section 1890(a)
may be used.
(iv) Consultation.--In carrying out
this subparagraph, the Secretary shall
consult with interested parties.
(v) Determination.--The Secretary
shall establish a process to determine
whether or not an entity meets the
requirements established under clause
(i). Such process may involve one or
both of the following:
(I) A determination by the
Secretary.
(II) A designation by the
Secretary of one or more
independent organizations to
make such determination.
(F) Authority to revise satisfactorily
reporting data.--For years after 2009, the
Secretary, in consultation with stakeholders
and experts, may revise the criteria under this
subsection for satisfactorily submitting data
on quality measures under subparagraph (A) and
the criteria for submitting data on electronic
prescribing quality measures under subparagraph
(B)(ii).
(4) Form of payment.--The payment under this
subsection shall be in the form of a single
consolidated payment.
(5) Application.--
(A) Physician reporting system rules.--
Paragraphs (5), (6),and (8) of subsection (k)
shall apply for purposes of this subsection in
the same manner as they apply for purposes of
such subsection.
(B) Coordination with other bonus payments.--
The provisions of this subsection shall not be
taken into account in applying subsections (m)
and (u) of section 1833 and any payment under
such subsections shall not be taken into
account in computing allowable charges under
this subsection.
(C) Implementation.--Notwithstanding any
other provision of law, for 2007, 2008, and
2009, the Secretary may implement by program
instruction or otherwise this subsection.
(D) Validation.--
(i) In general.--Subject to the
succeeding provisions of this
subparagraph, for purposes of
determining whether a measure is
applicable to the covered professional
services of an eligible professional
under this subsection for 2007 and 288,
the Secretary shall presume that if an
eligible professional submits data for
a measure, such measure is applicable
to such professional.
(ii) Method.--The Secretary may
establish procedures to validate (by
sampling or other means as the
Secretary determines to be appropriate)
whether measures applicable to covered
professional services of an eligible
professional have been reported.
(iii) Denial of payment authority.--
If the Secretary determines that an
eligible professional (or, in the case
of a group practice under paragraph
(3)(C), the group practice) has not
reported measures applicable to covered
professional services of such
professional, the Secretary shall not
pay the incentive payment under this
subsection. If such payments for such
period have already been made, the
Secretary shall recoup such payments
from the eligible professional (or the
group practice).
(E) Limitations on review.--
Except as provided in subparagraph
(I), there shall be no administrative
or judicial review under 1869, section
1878, or otherwise of
(i) the determination of measures
applicable to services furnished by
eligible professionals under this
subsection;
(ii) the determination of
satisfactory reporting under this
subsection;
(iii) the determination of a
successful electronic prescriber under
paragraph (3), the limitation under
paragraph (2)(B), and the exception
under subsection (a)(5)(B); and
(iv) the determination of any
incentive payment under this subsection
and the payment adjustment under
paragraphs (5)(A) and (8)(A) of
subsection (a).
(F) Extension.--For 2008 through reporting
periods occurring in 2015, the Secretary shall
establish and, for reporting periods occurring
in 2016 and subsequent years, the Secretary may
establish alternative criteria for
satisfactorily reporting under this subsection
and alternative reporting periods under
paragraph (6)(C) for reporting groups of
measures under subsection (k)(2)(B) and for
reporting using the method specified in
subsection (k)(4).
(G) Posting on website.--The Secretary shall
post on the Internet website of the Centers for
Medicare & Medicaid Services, in an easily
understandable format, a list of the names of
the following:
(i) The eligible professionals (or,
in the case of reporting under
paragraph (3)(C), the group practices)
who satisfactorily submitted data on
quality measures under this subsection.
(ii) The eligible professionals (or,
in the case of reporting under
paragraph (3)(C), the group practices)
who are successful electronic
prescribers.
(H) Feedback.--The Secretary shall provide
timely feedback to eligible professionals on
the performance of the eligible professional
with respect to satisfactorily submitting data
on quality measures under this subsection.
(I) Informal appeals process.--The Secretary
shall, by not later than January 1, 2011,
establish and have in place an informal process
for eligible professionals to seek a review of
the determination that an eligible professional
did not satisfactorily submit data on quality
measures under this subsection.
(6) Definitions.--For purposes of this subsection:
(A) Eligible professional; covered
professional services.--The terms ``eligible
professional'' and ``covered professional
services'' have the meanings given such termsin
subsection (k)(3).
(B) Physician reporting system.--The term
``physician reporting system'' means the system
established under subsection (k).
(C) Reporting period.--
(i) In general.--Subject to clauses
(ii) and (iii), the term ``reporting
period'' means--
(I) for 2007, the period
beginning on July 1, 2007, and
ending on December 31, 2007;
and
(II) for 2008 and subsequent
years, the entire year.
(ii) Authority to revise reporting
period.--For years after 2009, the
Secretary may revise the reporting
period under clause (i) if the
Secretary determines such revision is
appropriate, produces valid results on
measures reported, and is consistent
with the goals of maximizing scientific
validity and reducing administrative
burden. If the Secretary revises such
period pursuant to the preceding
sentence, the term ``reporting period''
shall mean such revised period.
(iii) Reference.--Any reference in
this subsection to a reporting period
with respect to the application of
subsection (a)(5) (a)(8) shall be
deemed a reference to the reporting
period under subsection (a)(5)(D)(iii)
or the quality reporting period under
subsection (a)(8)(D)(iii),
respectively.
(7) Integration of physician quality reporting and
ehr reporting.--Not later than January 1, 2012, the
Secretary shall develop a plan to integrate reporting
on quality measures under this subsection with
reporting requirements under subsection (o) relating to
the meaningful use of electronic health records. Such
integration shall consist of the following:
(A) The selection of measures, the reporting
of which would both demonstrate--
(i) meaningful use of an electronic
health record for purposes of
subsection (o); and
(ii) quality of care furnished to an
individual.
(B) Such other activities as specified by the
Secretary.
(8) Additional incentive payment.--
(A) In general.--For 2011 through 2014, if an
eligible professional meets the requirements
described in subparagraph (B), the applicable
quality percent for such year, as described in
clauses (iii) and (iv) of paragraph (1)(B),
shall be increased by 0.5 percentage points.
(B) Requirements described.--In order to
qualify for the additional incentive payment
described in subparagraph (A), an eligible
professional shall meet the following
requirements:
(i) The eligible professional shall--
(I) satisfactorily submit
data on quality measures for
purposes of paragraph (1) for a
year; and
(II) have such data submitted
on their behalf through a
Maintenance of Certification
Program (as defined in
subparagraph (C)(i)) that
meets--
(aa) the criteria for
a registry (as
described in subsection
(k)(4)); or
(bb) an alternative
form and manner
determined appropriate
by the Secretary.
(ii) The eligible professional, more
frequently than is required to qualify
for or maintain board certification
status--
(I) participates in such a
Maintenance of Certification
program for a year; and
(II) successfully completes a
qualified Maintenance of
Certification Program practice
assessment (as defined in
subparagraph (C)(ii)) for such
year.
(iii) A Maintenance of Certification
program submits to the Secretary, on
behalf of the eligible professional,
information--
(I) in a form and manner
specified by the Secretary,
that the eligible professional
has successfully met the
requirements of clause (ii)
(which may be in the form of a
structural measure);
(II) if requested by the
Secretary, on the survey of
patient experience with care
(as described in subparagraph
(C)(ii)(II)); and
(III) as the Secretary may
require, on the methods,
measures, and data used under
the Maintenance of
Certification Program and the
qualified Maintenance of
Certification Program practice
assessment.
(C) Definitions.--For purposes of this
paragraph:
(i) The term ``Maintenance of
Certification Program'' means a
continuous assessment program, such as
qualified American Board of Medical
Specialties Maintenance of
Certification program or an equivalent
program (as determined by the
Secretary), that advances quality and
the lifelong learning and self-
assessment of board certified specialty
physicians by focusing on the
competencies of patient care, medical
knowledge, practice-based learning,
interpersonal and communication skills
and professionalism. Such a program
shall include the following:
(I) The program requires the
physician to maintain a valid,
unrestricted medical license in
the United States.
(II) The program requires a
physician to participate in
educational and self-assessment
programs that require an
assessment of what was learned.
(III) The program requires a
physician to demonstrate,
through a formalized, secure
examination, that the physician
has the fundamental diagnostic
skills, medical knowledge, and
clinical judgment to provide
quality care in their
respective specialty.
(IV) The program requires
successful completion of a
qualified Maintenance of
Certification Program practice
assessment as described in
clause (ii).
(ii) The term ``qualified Maintenance
of Certification Program practice
assessment'' means an assessment of a
physician's practice that--
(I) includes an initial
assessment of an eligible
professional's practice that is
designed to demonstrate the
physician's use of evidence-
based medicine;
(II) includes a survey of
patient experience with care;
and
(III) requires a physician to
implement a quality improvement
intervention to address a
practice weakness identified in
the initial assessment under
subclause (I) and then to
remeasure to assess performance
improvement after such
intervention.
(9) Continued application for purposes of mips and
for certain professionals volunteering to report.--The
Secretary shall, in accordance with subsection
(q)(1)(F), carry out the processes under this
subsection--
(A) for purposes of subsection (q); and
(B) for eligible professionals who are not
MIPS eligible professionals (as defined in
subsection (q)(1)(C)) for the year involved.
(n) Physician Feedback Program.--
(1) Establishment.--
(A) In general.--
(i) Establishment.--The Secretary
shall establish a Physician Feedback
Program (in this subsection referred to
as the ``Program'').
(ii) Reports on resources.--The
Secretary shall use claims data under
this title (and may use other data) to
provide confidential reports to
physicians (and, as determined
appropriate by the Secretary, to groups
of physicians) that measure the
resources involved in furnishing care
to individuals under this title.
(iii) Inclusion of certain
information.--If determined appropriate
by the Secretary, the Secretary may
include information on the quality of
care furnished to individuals under
this title by the physician (or group
of physicians) in such reports.
(B) Resource use.--The resources described in
subparagraph (A)(ii) may be measured--
(i) on an episode basis;
(ii) on a per capita basis; or
(iii) on both an episode and a per
capita basis.
(2) Implementation.--The Secretary shall implement
the Program by not later than January 1, 2009.
(3) Data for reports.--To the extent practicable,
reports under the Program shall be based on the most
recent data available.
(4) Authority to focus initial application.--The
Secretary may focus the initial application of the
Program as appropriate, such as focusing the Program
on--
(A) physician specialties that account for a
certain percentage of all spending for
physicians' services under this title;
(B) physicians who treat conditions that have
a high cost or a high volume, or both, under
this title;
(C) physicians who use a high amount of
resources compared to other physicians;
(D) physicians practicing in certain
geographic areas; or
(E) physicians who treat a minimum number of
individuals under this title.
(5) Authority to exclude certain information if
insufficient information.--The Secretary may exclude
certain information regarding a service from a report
under the Program with respect to a physician (or group
of physicians) if the Secretary determines that there
is insufficient information relating to that service to
provide a valid report on that service.
(6) Adjustment of data.--To the extent practicable,
the Secretary shall make appropriate adjustments to the
data used in preparing reports under the Program, such
as adjustments to take into account variations in
health status and other patient characteristics. For
adjustments for reports on utilization under paragraph
(9), see subparagraph (D) of such paragraph.
(7) Education and outreach.--The Secretary shall
provide for education and outreach activities to
physicians on the operation of, and methodologies
employed under, the Program.
(8) Disclosure exemption.--Reports under the Program
shall be exempt from disclosure under section 552 of
title 5, United States Code.
(9) Reports on utilization.--
(A) Development of episode grouper.--
(i) In general.--The Secretary shall
develop an episode grouper that
combines separate but clinically
related items and services into an
episode of care for an individual, as
appropriate.
(ii) Timeline for development.--The
episode grouper described in
subparagraph (A) shall be developed by
not later than January 1, 2012.
(iii) Public availability.--The
Secretary shall make the details of the
episode grouper described in
subparagraph (A) available to the
public.
(iv) Endorsement.--The Secretary
shall seek endorsement of the episode
grouper described in subparagraph (A)
by the entity with a contract under
section 1890(a).
(B) Reports on utilization.--Effective
beginning with 2012, the Secretary shall
provide reports to physicians that compare, as
determined appropriate by the Secretary,
patterns of resource use of the individual
physician to such patterns of other physicians.
(C) Analysis of data.--The Secretary shall,
for purposes of preparing reports under this
paragraph, establish methodologies as
appropriate, such as to--
(i) attribute episodes of care, in
whole or in part, to physicians;
(ii) identify appropriate physicians
for purposes of comparison under
subparagraph (B); and
(iii) aggregate episodes of care
attributed to a physician under clause
(i) into a composite measure per
individual.
(D) Data adjustment.--In preparing reports
under this paragraph, the Secretary shall make
appropriate adjustments, including
adjustments--
(i) to account for differences in
socioeconomic and demographic
characteristics, ethnicity, and health
status of individuals (such as to
recognize that less healthy individuals
may require more intensive
interventions); and
(ii) to eliminate the effect of
geographic adjustments in payment rates
(as described in subsection (e)).
(E) Public availability of methodology.--The
Secretary shall make available to the public--
(i) the methodologies established
under subparagraph (C);
(ii) information regarding any
adjustments made to data under
subparagraph (D); and
(iii) aggregate reports with respect
to physicians.
(F) Definition of physician.--In this
paragraph:
(i) In general.--The term
``physician'' has the meaning given
that term in section 1861(r)(1).
(ii) Treatment of groups.--Such term
includes, as the Secretary determines
appropriate, a group of physicians.
(G) Limitations on review.--There shall be no
administrative or judicial review under section
1869, section 1878, or otherwise of the
establishment of the methodology under
subparagraph (C), including the determination
of an episode of care under such methodology.
(10) Coordination with other value-based purchasing
reforms.--The Secretary shall coordinate the Program
with the value-based payment modifier established under
subsection (p) and, as the Secretary determines
appropriate, other similar provisions of this title.
(11) Reports ending with 2017.--Reports under the
Program shall not be provided after December 31, 2017.
See subsection (q)(12) for reports under the eligible
professionals Merit-based Incentive Payment System.
(o) Incentives for Adoption and Meaningful Use of Certified
EHR Technology.--
(1) Incentive payments.--
(A) In general.--
(i) In general.--Subject to the
succeeding subparagraphs of this
paragraph, with respect to covered
professional services furnished by an
eligible professional during a payment
year (as defined in subparagraph (E)),
if the eligible professional is a
meaningful EHR user (as determined
under paragraph (2)) for the EHR
reporting period with respect to such
year, in addition to the amount
otherwise paid under this part, there
also shall be paid to the eligible
professional (or to an employer or
facility in the cases described in
clause (A) of section 1842(b)(6)), from
the Federal Supplementary Medical
Insurance Trust Fund established under
section 1841 an amount equal to 75
percent of the Secretary's estimate
(based on claims submitted not later
than 2 months after the end of the
payment year) of the allowed charges
under this part for all such covered
professional services furnished by the
eligible professional during such year.
(ii) No incentive payments with
respect to years after 2016.--No
incentive payments may be made under
this subsection with respect to a year
after 2016.
(B) Limitations on amounts of incentive
payments.--
(i) In general.--In no case shall the
amount of the incentive payment
provided under this paragraph for an
eligible professional for a payment
year exceed the applicable amount
specified under this subparagraph with
respect to such eligible professional
and such year.
(ii) Amount.--Subject to clauses
(iii) through (v), the applicable
amount specified in this subparagraph
for an eligible professional is as
follows:
(I) For the first payment
year for such professional,
$15,000 (or, if the first
payment year for such eligible
professional is 2011 or 2012,
$18,000).
(II) For the second payment
year for such professional,
$12,000.
(III) For the third payment
year for such professional,
$8,000.
(IV) For the fourth payment
year for such professional,
$4,000.
(V) For the fifth payment
year for such professional,
$2,000.
(VI) For any succeeding
payment year for such
professional, $0.
(iii) Phase down for eligible
professionals first adopting ehr after
2013.--If the first payment year for an
eligible professional is after 2013,
then the amount specified in this
subparagraph for a payment year for
such professional is the same as the
amount specified in clause (ii) for
such payment year for an eligible
professional whose first payment year
is 2013.
(iv) Increase for certain eligible
professionals.--In the case of an
eligible professional who predominantly
furnishes services under this part in
an area that is designated by the
Secretary (under section 332(a)(1)(A)
of the Public Health Service Act) as a
health professional shortage area, the
amount that would otherwise apply for a
payment year for such professional
under subclauses (I) through (V) of
clause (ii) shall be increased by 10
percent. In implementing the preceding
sentence, the Secretary may, as
determined appropriate, apply
provisions of subsections (m) and (u)
of section 1833 in a similar manner as
such provisions apply under such
subsection.
(v) No incentive payment if first
adopting after 2014.--If the first
payment year for an eligible
professional is after 2014 then the
applicable amount specified in this
subparagraph for such professional for
such year and any subsequent year shall
be $0.
(C) Non-application to hospital-based
eligible professionals.--
(i) In general.--No incentive payment
may be made under this paragraph in the
case of a hospital-based eligible
professional.
(ii) Hospital-based eligible
professional.--For purposes of clause
(i), the term ``hospital-based eligible
professional'' means, with respect to
covered professional services furnished
by an eligible professional during the
EHR reporting period for a payment
year, an eligible professional, such as
a pathologist, anesthesiologist, or
emergency physician, who furnishes
substantially all of such services in a
hospital inpatient or emergency room
setting and through the use of the
facilities and equipment, including
qualified electronic health records, of
the hospital. The determination of
whether an eligible professional is a
hospital-based eligible professional
shall be made on the basis of the site
of service (as defined by the
Secretary) and without regard to any
employment or billing arrangement
between the eligible professional and
any other provider.
(D) Payment.--
(i) Form of payment.--The payment
under this paragraph may be in the form
of a single consolidated payment or in
the form of such periodic installments
as the Secretary may specify.
(ii) Coordination of application of
limitation for professionals in
different practices.--In the case of an
eligible professional furnishing
covered professional services in more
than one practice (as specified by the
Secretary), the Secretary shall
establish rules to coordinate the
incentive payments, including the
application of the limitation on
amounts of such incentive payments
under this paragraph, among such
practices.
(iii) Coordination with medicaid.--
The Secretary shall seek, to the
maximum extent practicable, to avoid
duplicative requirements from Federal
and State governments to demonstrate
meaningful use of certified EHR
technology under this title and title
XIX. The Secretary may also adjust the
reporting periods under such title and
such subsections in order to carry out
this clause.
(E) Payment year defined.--
(i) In general.--For purposes of this
subsection, the term ``payment year''
means a year beginning with 2011.
(ii) First, second, etc. payment
year.--The term ``first payment year''
means, with respect to covered
professional services furnished by an
eligible professional, the first year
for which an incentive payment is made
for such services under this
subsection. The terms ``second payment
year'', ``third payment year'',
``fourth payment year'', and ``fifth
payment year'' mean, with respect to
covered professional services furnished
by such eligible professional, each
successive year immediately following
the first payment year for such
professional.
(2) Meaningful ehr user.--
(A) In general.--An eligible professional
shall be treated as a meaningful EHR user for
an EHR reporting period for a payment year (or,
for purposes of subsection (a)(7), for an EHR
reporting period under such subsection for a
year, or pursuant to subparagraph (D) for
purposes of subsection (q), for a performance
period under such subsection for a year) if
each of the following requirements is met:
(i) Meaningful use of certified ehr
technology.--The eligible professional
demonstrates to the satisfaction of the
Secretary, in accordance with
subparagraph (C)(i), that during such
period the professional is using
certified EHR technology in a
meaningful manner, which shall include
the use of electronic prescribing as
determined to be appropriate by the
Secretary.
(ii) Information exchange.--The
eligible professional demonstrates to
the satisfaction of the Secretary, in
accordance with subparagraph (C)(i),
that during such period such certified
EHR technology is connected in a manner
that provides, in accordance with law
and standards applicable to the
exchange of information, for the
electronic exchange of health
information to improve the quality of
health care, such as promoting care
coordination, and the professional
demonstrates (through a process
specified by the Secretary, such as the
use of an attestation) that the
professional has not knowingly and
willfully taken action (such as to
disable functionality) to limit or
restrict the compatibility or
interoperability of the certified EHR
technology.
(iii) Reporting on measures using
ehr.--Subject to subparagraph (B)(ii)
and subsection (q)(5)(B)(ii)(II) and
using such certified EHR technology,
the eligible professional submits
information for such period, in a form
and manner specified by the Secretary,
on such clinical quality measures and
such other measures as selected by the
Secretary under subparagraph (B)(i).
The Secretary may provide for the use of
alternative means for meeting the requirements
of clauses (i), (ii), and (iii) in the case of
an eligible professional furnishing covered
professional services in a group practice (as
defined by the Secretary). The Secretary shall
seek to improve the use of electronic health
records and health care quality over time by
requiring more stringent measures of meaningful
use selected under this paragraph.
(B) Reporting on measures.--
(i) Selection.--The Secretary shall
select measures for purposes of
subparagraph (A)(iii) but only
consistent with the following:
(I) The Secretary shall
provide preference to clinical
quality measures that have been
endorsed by the entity with a
contract with the Secretary
under section 1890(a).
(II) Prior to any measure
being selected under this
subparagraph, the Secretary
shall publish in the Federal
Register such measure and
provide for a period of public
comment on such measure.
(ii) Limitation.--The Secretary may
not require the electronic reporting of
information on clinical quality
measures under subparagraph (A)(iii)
unless the Secretary has the capacity
to accept the information
electronically, which may be on a pilot
basis.
(iii) Coordination of reporting of
information.--In selecting such
measures, and in establishing the form
and manner for reporting measures under
subparagraph (A)(iii), the Secretary
shall seek to avoid redundant or
duplicative reporting otherwise
required, including reporting under
subsection (k)(2)(C).
(C) Demonstration of meaningful use of
certified ehr technology and information
exchange.--
(i) In general.--A professional may
satisfy the demonstration requirement
of clauses (i) and (ii) of subparagraph
(A) through means specified by the
Secretary, which may include--
(I) an attestation;
(II) the submission of claims
with appropriate coding (such
as a code indicating that a
patient encounter was
documented using certified EHR
technology);
(III) a survey response;
(IV) reporting under
subparagraph (A)(iii); and
(V) other means specified by
the Secretary.
(ii) Use of part d data.--
Notwithstanding sections 1860D-
15(d)(2)(B) and 1860D-15(f)(2), the
Secretary may use data regarding drug
claims submitted for purposes of
section 1860D-15 that are necessary for
purposes of subparagraph (A).
(D) Continued application for purposes of
mips.--With respect to 2019 and each subsequent
payment year, the Secretary shall, for purposes
of subsection (q) and in accordance with
paragraph (1)(F) of such subsection, determine
whether an eligible professional who is a MIPS
eligible professional (as defined in subsection
(q)(1)(C)) for such year is a meaningful EHR
user under this paragraph for the performance
period under subsection (q) for such year. The
provisions of subparagraphs (B) and (D) of
subsection (a)(7), shall apply to assessments
of MIPS eligible professionals under subsection
(q) with respect to the performance category
described in subsection (q)(2)(A)(iv) in an
appropriate manner which may be similar to the
manner in which such provisions apply with
respect to payment adjustments made under
subsection (a)(7)(A).
(3) Application.--
(A) Physician reporting system rules.--
Paragraphs (5), (6), and (8) of subsection (k)
shall apply for purposes of this subsection in
the same manner as they apply for purposes of
such subsection.
(B) Coordination with other payments.--The
provisions of this subsection shall not be
taken into account in applying the provisions
of subsection (m) of this section and of
section 1833(m) and any payment under such
provisions shall not be taken into account in
computing allowable charges under this
subsection.
(C) Limitations on review.--There shall be no
administrative or judicial review under section
1869, section 1878, or otherwise, of--
(i) the methodology and standards for
determining payment amounts under this
subsection and payment adjustments
under subsection (a)(7)(A), including
the limitation under paragraph (1)(B)
and coordination under clauses (ii) and
(iii) of paragraph (1)(D);
(ii) the methodology and standards
for determining a meaningful EHR user
under paragraph (2), including
selection of measures under paragraph
(2)(B), specification of the means of
demonstrating meaningful EHR use under
paragraph (2)(C), and the hardship
exception under subsection (a)(7)(B);
(iii) the methodology and standards
for determining a hospital-based
eligible professional under paragraph
(1)(C); and
(iv) the specification of reporting
periods under paragraph (5) and the
selection of the form of payment under
paragraph (1)(D)(i).
(D) Posting on website.--The Secretary shall
post on the Internet website of the Centers for
Medicare & Medicaid Services, in an easily
understandable format, a list of the names,
business addresses, and business phone numbers
of the eligible professionals who are
meaningful EHR users and, as determined
appropriate by the Secretary, of group
practices receiving incentive payments under
paragraph (1).
(4) Certified ehr technology defined.--For purposes
of this section, the term ``certified EHR technology''
means a qualified electronic health record (as defined
in section 3000(13) of the Public Health Service Act)
that is certified pursuant to section 3001(c)(5) of
such Act as meeting standards adopted under section
3004 of such Act that are applicable to the type of
record involved (as determined by the Secretary, such
as an ambulatory electronic health record for office-
based physicians or an inpatient hospital electronic
health record for hospitals).
(5) Definitions.--For purposes of this subsection:
(A) Covered professional services.--The term
``covered professional services'' has the
meaning given such term in subsection (k)(3).
(B) EHR reporting period.--The term ``EHR
reporting period'' means, with respect to a
payment year, any period (or periods) as
specified by the Secretary.
(C) Eligible professional.--The term
``eligible professional'' means a physician, as
defined in section 1861(r).
(p) Establishment of Value-based Payment Modifier.--
(1) In general.--The Secretary shall establish a
payment modifier that provides for differential payment
to a physician or a group of physicians under the fee
schedule established under subsection (b) based upon
the quality of care furnished compared to cost (as
determined under paragraphs (2) and (3), respectively)
during a performance period. Such payment modifier
shall be separate from the geographic adjustment
factors established under subsection (e).
(2) Quality.--
(A) In general.--For purposes of paragraph
(1), quality of care shall be evaluated, to the
extent practicable, based on a composite of
measures of the quality of care furnished (as
established by the Secretary under subparagraph
(B)).
(B) Measures.--
(i) The Secretary shall establish
appropriate measures of the quality of
care furnished by a physician or group
of physicians to individuals enrolled
under this part, such as measures that
reflect health outcomes. Such measures
shall be risk adjusted as determined
appropriate by the Secretary.
(ii) The Secretary shall seek
endorsement of the measures established
under this subparagraph by the entity
with a contract under section 1890(a).
(C) Continued application for purposes of
mips.--The Secretary shall, in accordance with
subsection (q)(1)(F), carry out subparagraph
(B) for purposes of subsection (q).
(3) Costs.--For purposes of paragraph (1), costs
shall be evaluated, to the extent practicable, based on
a composite of appropriate measures of costs
established by the Secretary (such as the composite
measure under the methodology established under
subsection (n)(9)(C)(iii)) that eliminate the effect of
geographic adjustments in payment rates (as described
in subsection (e)), and take into account risk factors
(such as socioeconomic and demographic characteristics,
ethnicity, and health status of individuals (such as to
recognize that less healthy individuals may require
more intensive interventions) and other factors
determined appropriate by the Secretary. With respect
to 2019 and each subsequent year, the Secretary shall,
in accordance with subsection (q)(1)(F), carry out this
paragraph for purposes of subsection (q).
(4) Implementation.--
(A) Publication of measures, dates of
implementation, performance period.--Not later
than January 1, 2012, the Secretary shall
publish the following:
(i) The measures of quality of care
and costs established under paragraphs
(2) and (3), respectively.
(ii) The dates for implementation of
the payment modifier (as determined
under subparagraph (B)).
(iii) The initial performance period
(as specified under subparagraph
(B)(ii)).
(B) Deadlines for implementation.--
(i) Initial implementation.--Subject
to the preceding provisions of this
subparagraph, the Secretary shall begin
implementing the payment modifier
established under this subsection
through the rulemaking process during
2013 for the physician fee schedule
established under subsection (b).
(ii) Initial performance period.--
(I) In general.--The
Secretary shall specify an
initial performance period for
application of the payment
modifier established under this
subsection with respect to
2015.
(II) Provision of information
during initial performance
period.--During the initial
performance period, the
Secretary shall, to the extent
practicable, provide
information to physicians and
groups of physicians about the
quality of care furnished by
the physician or group of
physicians to individuals
enrolled under this part
compared to cost (as determined
under paragraphs (2) and (3),
respectively) with respect to
the performance period.
(iii) Application.--The Secretary
shall apply the payment modifier
established under this subsection for
items and services furnished on or
after January 1, 2015, with respect to
specific physicians and groups of
physicians the Secretary determines
appropriate, and for services furnished
on or after January 1, 2017, with
respect to all physicians and groups of
physicians. Such payment modifier shall
not be applied for items and services
furnished on or after January 1, 2019.
(C) Budget neutrality.--The payment modifier
established under this subsection shall be
implemented in a budget neutral manner.
(5) Systems-based care.--The Secretary shall, as
appropriate, apply the payment modifier established
under this subsection in a manner that promotes
systems-based care.
(6) Consideration of special circumstances of certain
providers.--In applying the payment modifier under this
subsection, the Secretary shall, as appropriate, take
into account the special circumstances of physicians or
groups of physicians in rural areas and other
underserved communities.
(7) Application.--For purposes of the initial
application of the payment modifier established under
this subsection during the period beginning on January
1, 2015, and ending on December 31, 2016, the term
``physician'' has the meaning given such term in
section 1861(r). On or after January 1, 2017, the
Secretary may apply this subsection to eligible
professionals (as defined in subsection (k)(3)(B)) as
the Secretary determines appropriate.
(8) Definitions.--For purposes of this subsection:
(A) Costs.--The term ``costs'' means
expenditures per individual as determined
appropriate by the Secretary. In making the
determination under the preceding sentence, the
Secretary may take into account the amount of
growth in expenditures per individual for a
physician compared to the amount of such growth
for other physicians.
(B) Performance period.--The term
``performance period'' means a period specified
by the Secretary.
(9) Coordination with other value-based purchasing
reforms.--The Secretary shall coordinate the value-
based payment modifier established under this
subsection with the Physician Feedback Program under
subsection (n) and, as the Secretary determines
appropriate, other similar provisions of this title.
(10) Limitations on review.--There shall be no
administrative or judicial review under section 1869,
section 1878, or otherwise of--
(A) the establishment of the value-based
payment modifier under this subsection;
(B) the evaluation of quality of care under
paragraph (2), including the establishment of
appropriate measures of the quality of care
under paragraph (2)(B);
(C) the evaluation of costs under paragraph
(3), including the establishment of appropriate
measures of costs under such paragraph;
(D) the dates for implementation of the
value-based payment modifier;
(E) the specification of the initial
performance period and any other performance
period under paragraphs (4)(B)(ii) and (8)(B),
respectively;
(F) the application of the value-based
payment modifier under paragraph (7); and
(G) the determination of costs under
paragraph (8)(A).
(q) Merit-Based Incentive Payment System.--
(1) Establishment.--
(A) In general.--Subject to the succeeding
provisions of this subsection, the Secretary
shall establish an eligible professional Merit-
based Incentive Payment System (in this
subsection referred to as the ``MIPS'') under
which the Secretary shall--
(i) develop a methodology for
assessing the total performance of each
MIPS eligible professional according to
performance standards under paragraph
(3) for a performance period (as
established under paragraph (4)) for a
year;
(ii) using such methodology, provide
for a composite performance score in
accordance with paragraph (5) for each
such professional for each performance
period; and
(iii) use such composite performance
score of the MIPS eligible professional
for a performance period for a year to
determine and apply a MIPS adjustment
factor (and, as applicable, an
additional MIPS adjustment factor)
under paragraph (6) to the professional
for the year.
Notwithstanding subparagraph (C)(ii), under the
MIPS, the Secretary shall permit any eligible
professional (as defined in subsection
(k)(3)(B)) to report on applicable measures and
activities described in paragraph (2)(B).
(B) Program implementation.--The MIPS shall
apply to payments for items and services
furnished on or after January 1, 2019.
(C) MIPS eligible professional defined.--
(i) In general.--For purposes of this
subsection, subject to clauses (ii) and
(iv), the term ``MIPS eligible
professional'' means--
(I) for the first and second
years for which the MIPS
applies to payments (and for
the performance period for such
first and second year), a
physician (as defined in
section 1861(r)), a physician
assistant, nurse practitioner,
and clinical nurse specialist
(as such terms are defined in
section 1861(aa)(5)), a
certified registered nurse
anesthetist (as defined in
section 1861(bb)(2)), and a
group that includes such
professionals; and
(II) for the third year for
which the MIPS applies to
payments (and for the
performance period for such
third year) and for each
succeeding year (and for the
performance period for each
such year), the professionals
described in subclause (I),
such other eligible
professionals (as defined in
subsection (k)(3)(B)) as
specified by the Secretary, and
a group that includes such
professionals.
(ii) Exclusions.--For purposes of
clause (i), the term ``MIPS eligible
professional'' does not include, with
respect to a year, an eligible
professional (as defined in subsection
(k)(3)(B)) who--
(I) is a qualifying APM
participant (as defined in
section 1833(z)(2));
(II) subject to clause (vii),
is a partial qualifying APM
participant (as defined in
clause (iii)) for the most
recent period for which data
are available and who, for the
performance period with respect
to such year, does not report
on applicable measures and
activities described in
paragraph (2)(B) that are
required to be reported by such
a professional under the MIPS;
or
(III) for the performance
period with respect to such
year, does not exceed the low-
volume threshold measurement
selected under clause (iv).
(iii) Partial qualifying apm
participant.--For purposes of this
subparagraph, the term ``partial
qualifying APM participant'' means,
with respect to a year, an eligible
professional for whom the Secretary
determines the minimum payment
percentage (or percentages), as
applicable, described in paragraph (2)
of section 1833(z) for such year have
not been satisfied, but who would be
considered a qualifying APM participant
(as defined in such paragraph) for such
year if--
(I) with respect to 2019 and
2020, the reference in
subparagraph (A) of such
paragraph to 25 percent was
instead a reference to 20
percent;
(II) with respect to 2021 and
2022--
(aa) the reference in
subparagraph (B)(i) of
such paragraph to 50
percent was instead a
reference to 40
percent; and
(bb) the references
in subparagraph (B)(ii)
of such paragraph to 50
percent and 25 percent
of such paragraph were
instead references to
40 percent and 20
percent, respectively;
and
(III) with respect to 2023
and subsequent years--
(aa) the reference in
subparagraph (C)(i) of
such paragraph to 75
percent was instead a
reference to 50
percent; and
(bb) the references
in subparagraph (C)(ii)
of such paragraph to 75
percent and 25 percent
of such paragraph were
instead references to
50 percent and 20
percent, respectively.
(iv) Selection of low-volume
threshold measurement.--The Secretary
shall select a low-volume threshold to
apply for purposes of clause (ii)(III),
which may include one or more or a
combination of the following:
(I) The minimum number (as
determined by the Secretary) of
individuals enrolled under this
part who are treated by the
eligible professional for the
performance period involved.
(II) The minimum number (as
determined by the Secretary) of
items and services furnished to
individuals enrolled under this
part by such professional for
such performance period.
(III) The minimum amount (as
determined by the Secretary) of
allowed charges billed by such
professional under this part
for such performance period.
(v) Treatment of new medicare
enrolled eligible professionals.--In
the case of a professional who first
becomes a Medicare enrolled eligible
professional during the performance
period for a year (and had not
previously submitted claims under this
title such as a person, an entity, or a
part of a physician group or under a
different billing number or tax
identifier), such professional shall
not be treated under this subsection as
a MIPS eligible professional until the
subsequent year and performance period
for such subsequent year.
(vi) Clarification.--In the case of
items and services furnished during a
year by an individual who is not a MIPS
eligible professional (including
pursuant to clauses (ii) and (v)) with
respect to a year, in no case shall a
MIPS adjustment factor (or additional
MIPS adjustment factor) under paragraph
(6) apply to such individual for such
year.
(vii) Partial qualifying apm
participant clarifications.--
(I) Treatment as mips
eligible professional.--In the
case of an eligible
professional who is a partial
qualifying APM participant,
with respect to a year, and
who, for the performance period
for such year, reports on
applicable measures and
activities described in
paragraph (2)(B) that are
required to be reported by such
a professional under the MIPS,
such eligible professional is
considered to be a MIPS
eligible professional with
respect to such year.
(II) Not eligible for
qualifying apm participant
payments.--In no case shall an
eligible professional who is a
partial qualifying APM
participant, with respect to a
year, be considered a
qualifying APM participant (as
defined in paragraph (2) of
section 1833(z)) for such year
or be eligible for the
additional payment under
paragraph (1) of such section
for such year.
(D) Application to group practices.--
(i) In general.--Under the MIPS:
(I) Quality performance
category.--The Secretary shall
establish and apply a process
that includes features of the
provisions of subsection
(m)(3)(C) for MIPS eligible
professionals in a group
practice with respect to
assessing performance of such
group with respect to the
performance category described
in clause (i) of paragraph
(2)(A).
(II) Other performance
categories.--The Secretary may
establish and apply a process
that includes features of the
provisions of subsection
(m)(3)(C) for MIPS eligible
professionals in a group
practice with respect to
assessing the performance of
such group with respect to the
performance categories
described in clauses (ii)
through (iv) of such paragraph.
(ii) Ensuring comprehensiveness of
group practice assessment.--The process
established under clause (i) shall to
the extent practicable reflect the
range of items and services furnished
by the MIPS eligible professionals in
the group practice involved.
(E) Use of registries.--Under the MIPS, the
Secretary shall encourage the use of qualified
clinical data registries pursuant to subsection
(m)(3)(E) in carrying out this subsection.
(F) Application of certain provisions.--In
applying a provision of subsection (k), (m),
(o), or (p) for purposes of this subsection,
the Secretary shall--
(i) adjust the application of such
provision to ensure the provision is
consistent with the provisions of this
subsection; and
(ii) not apply such provision to the
extent that the provision is
duplicative with a provision of this
subsection.
(G) Accounting for risk factors.--
(i) Risk factors.--Taking into
account the relevant studies conducted
and recommendations made in reports
under section 2(d) of the Improving
Medicare Post-Acute Care Transformation
Act of 2014, and, as appropriate, other
information, including information
collected before completion of such
studies and recommendations, the
Secretary, on an ongoing basis, shall,
as the Secretary determines appropriate
and based on an individual's health
status and other risk factors--
(I) assess appropriate
adjustments to quality
measures, resource use
measures, and other measures
used under the MIPS; and
(II) assess and implement
appropriate adjustments to
payment adjustments, composite
performance scores, scores for
performance categories, or
scores for measures or
activities under the MIPS.
(2) Measures and activities under performance
categories.--
(A) Performance categories.--Under the MIPS,
the Secretary shall use the following
performance categories (each of which is
referred to in this subsection as a performance
category) in determining the composite
performance score under paragraph (5):
(i) Quality.
(ii) Resource use.
(iii) Clinical practice improvement
activities.
(iv) Meaningful use of certified EHR
technology.
(B) Measures and activities specified for
each category.--For purposes of paragraph
(3)(A) and subject to subparagraph (C),
measures and activities specified for a
performance period (as established under
paragraph (4)) for a year are as follows:
(i) Quality.--For the performance
category described in subparagraph
(A)(i), the quality measures included
in the final measures list published
under subparagraph (D)(i) for such year
and the list of quality measures
described in subparagraph (D)(vi) used
by qualified clinical data registries
under subsection (m)(3)(E).
(ii) Resource use.--For the
performance category described in
subparagraph (A)(ii), the measurement
of resource use for such period under
subsection (p)(3), using the
methodology under subsection (r) as
appropriate, and, as feasible and
applicable, accounting for the cost of
drugs under part D.
(iii) Clinical practice improvement
activities.--For the performance
category described in subparagraph
(A)(iii), clinical practice improvement
activities (as defined in subparagraph
(C)(v)(III)) under subcategories
specified by the Secretary for such
period, which shall include at least
the following:
(I) The subcategory of
expanded practice access, such
as same day appointments for
urgent needs and after hours
access to clinician advice.
(II) The subcategory of
population management, such as
monitoring health conditions of
individuals to provide timely
health care interventions or
participation in a qualified
clinical data registry.
(III) The subcategory of care
coordination, such as timely
communication of test results,
timely exchange of clinical
information to patients and
other providers, and use of
remote monitoring or
telehealth.
(IV) The subcategory of
beneficiary engagement, such as
the establishment of care plans
for individuals with complex
care needs, beneficiary self-
management assessment and
training, and using shared
decision-making mechanisms.
(V) The subcategory of
patient safety and practice
assessment, such as through use
of clinical or surgical
checklists and practice
assessments related to
maintaining certification.
(VI) The subcategory of
participation in an alternative
payment model (as defined in
section 1833(z)(3)(C)).
In establishing activities under this
clause, the Secretary shall give
consideration to the circumstances of
small practices (consisting of 15 or
fewer professionals) and practices
located in rural areas and in health
professional shortage areas (as
designated under section 332(a)(1)(A)
of the Public Health Service Act).
(iv) Meaningful ehr use.--For the
performance category described in
subparagraph (A)(iv), the requirements
established for such period under
subsection (o)(2) for determining
whether an eligible professional is a
meaningful EHR user.
(C) Additional provisions.--
(i) Emphasizing outcome measures
under the quality performance
category.--In applying subparagraph
(B)(i), the Secretary shall, as
feasible, emphasize the application of
outcome measures.
(ii) Application of additional system
measures.--The Secretary may use
measures used for a payment system
other than for physicians, such as
measures for inpatient hospitals, for
purposes of the performance categories
described in clauses (i) and (ii) of
subparagraph (A). For purposes of the
previous sentence, the Secretary may
not use measures for hospital
outpatient departments, except in the
case of items and services furnished by
emergency physicians, radiologists, and
anesthesiologists.
(iii) Global and population-based
measures.--The Secretary may use global
measures, such as global outcome
measures, and population-based measures
for purposes of the performance
category described in subparagraph
(A)(i).
(iv) Application of measures and
activities to non-patient-facing
professionals.--In carrying out this
paragraph, with respect to measures and
activities specified in subparagraph
(B) for performance categories
described in subparagraph (A), the
Secretary--
(I) shall give consideration
to the circumstances of
professional types (or
subcategories of those types
determined by practice
characteristics) who typically
furnish services that do not
involve face-to-face
interaction with a patient; and
(II) may, to the extent
feasible and appropriate, take
into account such circumstances
and apply under this subsection
with respect to MIPS eligible
professionals of such
professional types or
subcategories, alternative
measures or activities that
fulfill the goals of the
applicable performance
category.
In carrying out the previous sentence,
the Secretary shall consult with
professionals of such professional
types or subcategories.
(v) Clinical practice improvement
activities.--
(I) Request for
information.--In initially
applying subparagraph (B)(iii),
the Secretary shall use a
request for information to
solicit recommendations from
stakeholders to identify
activities described in such
subparagraph and specifying
criteria for such activities.
(II) Contract authority for
clinical practice improvement
activities performance
category.--In applying
subparagraph (B)(iii), the
Secretary may contract with
entities to assist the
Secretary in--
(aa) identifying
activities described in
subparagraph (B)(iii);
(bb) specifying
criteria for such
activities; and
(cc) determining
whether a MIPS eligible
professional meets such
criteria.
(III) Clinical practice
improvement activities
defined.--For purposes of this
subsection, the term ``clinical
practice improvement activity''
means an activity that relevant
eligible professional
organizations and other
relevant stakeholders identify
as improving clinical practice
or care delivery and that the
Secretary determines, when
effectively executed, is likely
to result in improved outcomes.
(D) Annual list of quality measures available
for mips assessment.--
(i) In general.--Under the MIPS, the
Secretary, through notice and comment
rulemaking and subject to the
succeeding clauses of this
subparagraph, shall, with respect to
the performance period for a year,
establish an annual final list of
quality measures from which MIPS
eligible professionals may choose for
purposes of assessment under this
subsection for such performance period.
Pursuant to the previous sentence, the
Secretary shall--
(I) not later than November 1
of the year prior to the first
day of the first performance
period under the MIPS,
establish and publish in the
Federal Register a final list
of quality measures; and
(II) not later than November
1 of the year prior to the
first day of each subsequent
performance period, update the
final list of quality measures
from the previous year (and
publish such updated final list
in the Federal Register), by--
(aa) removing from
such list, as
appropriate, quality
measures, which may
include the removal of
measures that are no
longer meaningful (such
as measures that are
topped out);
(bb) adding to such
list, as appropriate,
new quality measures;
and
(cc) determining
whether or not quality
measures on such list
that have undergone
substantive changes
should be included in
the updated list.
(ii) Call for quality measures.--
(I) In general.--Eligible
professional organizations and
other relevant stakeholders
shall be requested to identify
and submit quality measures to
be considered for selection
under this subparagraph in the
annual list of quality measures
published under clause (i) and
to identify and submit updates
to the measures on such list.
For purposes of the previous
sentence, measures may be
submitted regardless of whether
such measures were previously
published in a proposed rule or
endorsed by an entity with a
contract under section 1890(a).
(II) Eligible professional
organization defined.--In this
subparagraph, the term
``eligible professional
organization'' means a
professional organization as
defined by nationally
recognized specialty boards of
certification or equivalent
certification boards.
(iii) Requirements.--In selecting
quality measures for inclusion in the
annual final list under clause (i), the
Secretary shall--
(I) provide that, to the
extent practicable, all quality
domains (as defined in
subsection (s)(1)(B)) are
addressed by such measures; and
(II) ensure that such
selection is consistent with
the process for selection of
measures under subsections (k),
(m), and (p)(2).
(iv) Peer review.--Before including a
new measure in the final list of
measures published under clause (i) for
a year, the Secretary shall submit for
publication in applicable specialty-
appropriate, peer-reviewed journals
such measure and the method for
developing and selecting such measure,
including clinical and other data
supporting such measure.
(v) Measures for inclusion.--The
final list of quality measures
published under clause (i) shall
include, as applicable, measures under
subsections (k), (m), and (p)(2),
including quality measures from among--
(I) measures endorsed by a
consensus-based entity;
(II) measures developed under
subsection (s); and
(III) measures submitted
under clause (ii)(I).
Any measure selected for inclusion in
such list that is not endorsed by a
consensus-based entity shall have a
focus that is evidence-based.
(vi) Exception for qualified clinical
data registry measures.--Measures used
by a qualified clinical data registry
under subsection (m)(3)(E) shall not be
subject to the requirements under
clauses (i), (iv), and (v). The
Secretary shall publish the list of
measures used by such qualified
clinical data registries on the
Internet website of the Centers for
Medicare & Medicaid Services.
(vii) Exception for existing quality
measures.--Any quality measure
specified by the Secretary under
subsection (k) or (m), including under
subsection (m)(3)(E), and any measure
of quality of care established under
subsection (p)(2) for the reporting
period or performance period under the
respective subsection beginning before
the first performance period under the
MIPS--
(I) shall not be subject to
the requirements under clause
(i) (except under items (aa)
and (cc) of subclause (II) of
such clause) or to the
requirement under clause (iv);
and
(II) shall be included in the
final list of quality measures
published under clause (i)
unless removed under clause
(i)(II)(aa).
(viii) Consultation with relevant
eligible professional organizations and
other relevant stakeholders.--Relevant
eligible professional organizations and
other relevant stakeholders, including
State and national medical societies,
shall be consulted in carrying out this
subparagraph.
(ix) Optional application.--The
process under section 1890A is not
required to apply to the selection of
measures under this subparagraph.
(3) Performance standards.--
(A) Establishment.--Under the MIPS, the
Secretary shall establish performance standards
with respect to measures and activities
specified under paragraph (2)(B) for a
performance period (as established under
paragraph (4)) for a year.
(B) Considerations in establishing
standards.--In establishing such performance
standards with respect to measures and
activities specified under paragraph (2)(B),
the Secretary shall consider the following:
(i) Historical performance standards.
(ii) Improvement.
(iii) The opportunity for continued
improvement.
(4) Performance period.--The Secretary shall
establish a performance period (or periods) for a year
(beginning with 2019). Such performance period (or
periods) shall begin and end prior to the beginning of
such year and be as close as possible to such year. In
this subsection, such performance period (or periods)
for a year shall be referred to as the performance
period for the year.
(5) Composite performance score.--
(A) In general.--Subject to the succeeding
provisions of this paragraph and taking into
account, as available and applicable, paragraph
(1)(G), the Secretary shall develop a
methodology for assessing the total performance
of each MIPS eligible professional according to
performance standards under paragraph (3) with
respect to applicable measures and activities
specified in paragraph (2)(B) with respect to
each performance category applicable to such
professional for a performance period (as
established under paragraph (4)) for a year.
Using such methodology, the Secretary shall
provide for a composite assessment (using a
scoring scale of 0 to 100) for each such
professional for the performance period for
such year. In this subsection such a composite
assessment for such a professional with respect
to a performance period shall be referred to as
the ``composite performance score'' for such
professional for such performance period.
(B) Incentive to report; encouraging use of
certified ehr technology for reporting quality
measures.--
(i) Incentive to report.--Under the
methodology established under
subparagraph (A), the Secretary shall
provide that in the case of a MIPS
eligible professional who fails to
report on an applicable measure or
activity that is required to be
reported by the professional, the
professional shall be treated as
achieving the lowest potential score
applicable to such measure or activity.
(ii) Encouraging use of certified ehr
technology and qualified clinical data
registries for reporting quality
measures.--Under the methodology
established under subparagraph (A), the
Secretary shall--
(I) encourage MIPS eligible
professionals to report on
applicable measures with
respect to the performance
category described in paragraph
(2)(A)(i) through the use of
certified EHR technology and
qualified clinical data
registries; and
(II) with respect to a
performance period, with
respect to a year, for which a
MIPS eligible professional
reports such measures through
the use of such EHR technology,
treat such professional as
satisfying the clinical quality
measures reporting requirement
described in subsection
(o)(2)(A)(iii) for such year.
(C) Clinical practice improvement activities
performance score.--
(i) Rule for certification.--A MIPS
eligible professional who is in a
practice that is certified as a
patient-centered medical home or
comparable specialty practice, as
determined by the Secretary, with
respect to a performance period shall
be given the highest potential score
for the performance category described
in paragraph (2)(A)(iii) for such
period.
(ii) APM participation.--
Participation by a MIPS eligible
professional in an alternative payment
model (as defined in section
1833(z)(3)(C)) with respect to a
performance period shall earn such
eligible professional a minimum score
of one-half of the highest potential
score for the performance category
described in paragraph (2)(A)(iii) for
such performance period.
(iii) Subcategories.--A MIPS eligible
professional shall not be required to
perform activities in each subcategory
under paragraph (2)(B)(iii) or
participate in an alternative payment
model in order to achieve the highest
potential score for the performance
category described in paragraph
(2)(A)(iii).
(D) Achievement and improvement.--
(i) Taking into account
improvement.--Beginning with the second
year to which the MIPS applies, in
addition to the achievement of a MIPS
eligible professional, if data
sufficient to measure improvement is
available, the methodology developed
under subparagraph (A)--
(I) in the case of the
performance score for the
performance category described
in clauses (i) and (ii) of
paragraph (2)(A), shall take
into account the improvement of
the professional; and
(II) in the case of
performance scores for other
performance categories, may
take into account the
improvement of the
professional.
(ii) Assigning higher weight for
achievement.--Subject to clause (i),
under the methodology developed under
subparagraph (A), the Secretary may
assign a higher scoring weight under
subparagraph (F) with respect to the
achievement of a MIPS eligible
professional than with respect to any
improvement of such professional
applied under clause (i) with respect
to a measure, activity, or category
described in paragraph (2).
(E) Weights for the performance categories.--
(i) In general.--Under the
methodology developed under
subparagraph (A), subject to
subparagraph (F)(i) and clause (ii),
the composite performance score shall
be determined as follows:
(I) Quality.--
(aa) In general.--
Subject to item (bb),
thirty percent of such
score shall be based on
performance with
respect to the category
described in clause (i)
of paragraph (2)(A). In
applying the previous
sentence, the Secretary
shall, as feasible,
encourage the
application of outcome
measures within such
category.
(bb) First 2 years.--
For the first and
second years for which
the MIPS applies to
payments, the
percentage applicable
under item (aa) shall
be increased in a
manner such that the
total percentage points
of the increase under
this item for the
respective year equals
the total number of
percentage points by
which the percentage
applied under subclause
(II)(bb) for the
respective year is less
than 30 percent.
(II) Resource use.--
(aa) In general.--
Subject to item (bb),
thirty percent of such
score shall be based on
performance with
respect to the category
described in clause
(ii) of paragraph
(2)(A).
(bb) First 2 years.--
For the first year for
which the MIPS applies
to payments, not more
than 10 percent of such
score shall be based on
performance with
respect to the category
described in clause
(ii) of paragraph
(2)(A). For the second
year for which the MIPS
applies to payments,
not more than 15
percent of such score
shall be based on
performance with
respect to the category
described in clause
(ii) of paragraph
(2)(A).
(III) Clinical practice
improvement activities.--
Fifteen percent of such score
shall be based on performance
with respect to the category
described in clause (iii) of
paragraph (2)(A).
(IV) Meaningful use of
certified ehr technology.--
Twenty-five percent of such
score shall be based on
performance with respect to the
category described in clause
(iv) of paragraph (2)(A).
(ii) Authority to adjust percentages
in case of high ehr meaningful use
adoption.--In any year in which the
Secretary estimates that the proportion
of eligible professionals (as defined
in subsection (o)(5)) who are
meaningful EHR users (as determined
under subsection (o)(2)) is 75 percent
or greater, the Secretary may reduce
the percent applicable under clause
(i)(IV), but not below 15 percent. If
the Secretary makes such reduction for
a year, subject to subclauses (I)(bb)
and (II)(bb) of clause (i), the
percentages applicable under one or
more of subclauses (I), (II), and (III)
of clause (i) for such year shall be
increased in a manner such that the
total percentage points of the increase
under this clause for such year equals
the total number of percentage points
reduced under the preceding sentence
for such year.
(F) Certain flexibility for weighting
performance categories, measures, and
activities.--Under the methodology under
subparagraph (A), if there are not sufficient
measures and activities (described in paragraph
(2)(B)) applicable and available to each type
of eligible professional involved, the
Secretary shall assign different scoring
weights (including a weight of 0)--
(i) which may vary from the scoring
weights specified in subparagraph (E),
for each performance category based on
the extent to which the category is
applicable to the type of eligible
professional involved; and
(ii) for each measure and activity
specified under paragraph (2)(B) with
respect to each such category based on
the extent to which the measure or
activity is applicable and available to
the type of eligible professional
involved.
(G) Resource use.--Analysis of the
performance category described in paragraph
(2)(A)(ii) shall include results from the
methodology described in subsection (r)(5), as
appropriate.
(H) Inclusion of quality measure data from
other payers.--In applying subsections (k),
(m), and (p) with respect to measures described
in paragraph (2)(B)(i), analysis of the
performance category described in paragraph
(2)(A)(i) may include data submitted by MIPS
eligible professionals with respect to items
and services furnished to individuals who are
not individuals entitled to benefits under part
A or enrolled under part B.
(I) Use of voluntary virtual groups for
certain assessment purposes.--
(i) In general.--In the case of MIPS
eligible professionals electing to be a
virtual group under clause (ii) with
respect to a performance period for a
year, for purposes of applying the
methodology under subparagraph (A) with
respect to the performance categories
described in clauses (i) and (ii) of
paragraph (2)(A)--
(I) the assessment of
performance provided under such
methodology with respect to
such performance categories
that is to be applied to each
such professional in such group
for such performance period
shall be with respect to the
combined performance of all
such professionals in such
group for such period; and
(II) with respect to the
composite performance score
provided under this paragraph
for such performance period for
each such MIPS eligible
professional in such virtual
group, the components of the
composite performance score
that assess performance with
respect to such performance
categories shall be based on
the assessment of the combined
performance under subclause (I)
for such performance categories
and performance period.
(ii) Election of practices to be a
virtual group.--The Secretary shall, in
accordance with the requirements under
clause (iii), establish and have in
place a process to allow an individual
MIPS eligible professional or a group
practice consisting of not more than 10
MIPS eligible professionals to elect,
with respect to a performance period
for a year to be a virtual group under
this subparagraph with at least one
other such individual MIPS eligible
professional or group practice. Such a
virtual group may be based on
appropriate classifications of
providers, such as by geographic areas
or by provider specialties defined by
nationally recognized specialty boards
of certification or equivalent
certification boards.
(iii) Requirements.--The requirements
for the process under clause (ii)
shall--
(I) provide that an election
under such clause, with respect
to a performance period, shall
be made before the beginning of
such performance period and may
not be changed during such
performance period;
(II) provide that an
individual MIPS eligible
professional and a group
practice described in clause
(ii) may elect to be in no more
than one virtual group for a
performance period and that, in
the case of such a group
practice that elects to be in
such virtual group for such
performance period, such
election applies to all MIPS
eligible professionals in such
group practice;
(III) provide that a virtual
group be a combination of tax
identification numbers;
(IV) provide for formal
written agreements among MIPS
eligible professionals electing
to be a virtual group under
this subparagraph; and
(V) include such other
requirements as the Secretary
determines appropriate.
(6) MIPS payments.--
(A) MIPS adjustment factor.--Taking into
account paragraph (1)(G), the Secretary shall
specify a MIPS adjustment factor for each MIPS
eligible professional for a year. Such MIPS
adjustment factor for a MIPS eligible
professional for a year shall be in the form of
a percent and shall be determined--
(i) by comparing the composite
performance score of the eligible
professional for such year to the
performance threshold established under
subparagraph (D)(i) for such year;
(ii) in a manner such that the
adjustment factors specified under this
subparagraph for a year result in
differential payments under this
paragraph reflecting that--
(I) MIPS eligible
professionals with composite
performance scores for such
year at or above such
performance threshold for such
year receive zero or positive
payment adjustment factors for
such year in accordance with
clause (iii), with such
professionals having higher
composite performance scores
receiving higher adjustment
factors; and
(II) MIPS eligible
professionals with composite
performance scores for such
year below such performance
threshold for such year receive
negative payment adjustment
factors for such year in
accordance with clause (iv),
with such professionals having
lower composite performance
scores receiving lower
adjustment factors;
(iii) in a manner such that MIPS
eligible professionals with composite
scores described in clause (ii)(I) for
such year, subject to clauses (i) and
(ii) of subparagraph (F), receive a
zero or positive adjustment factor on a
linear sliding scale such that an
adjustment factor of 0 percent is
assigned for a score at the performance
threshold and an adjustment factor of
the applicable percent specified in
subparagraph (B) is assigned for a
score of 100; and
(iv) in a manner such that--
(I) subject to subclause
(II), MIPS eligible
professionals with composite
performance scores described in
clause (ii)(II) for such year
receive a negative payment
adjustment factor on a linear
sliding scale such that an
adjustment factor of 0 percent
is assigned for a score at the
performance threshold and an
adjustment factor of the
negative of the applicable
percent specified in
subparagraph (B) is assigned
for a score of 0; and
(II) MIPS eligible
professionals with composite
performance scores that are
equal to or greater than 0, but
not greater than \1/4\ of the
performance threshold specified
under subparagraph (D)(i) for
such year, receive a negative
payment adjustment factor that
is equal to the negative of the
applicable percent specified in
subparagraph (B) for such year.
(B) Applicable percent defined.--For purposes
of this paragraph, the term ``applicable
percent'' means--
(i) for 2019, 4 percent;
(ii) for 2020, 5 percent;
(iii) for 2021, 7 percent; and
(iv) for 2022 and subsequent years, 9
percent.
(C) Additional mips adjustment factors for
exceptional performance.--For 2019 and each
subsequent year through 2024, in the case of a
MIPS eligible professional with a composite
performance score for a year at or above the
additional performance threshold under
subparagraph (D)(ii) for such year, in addition
to the MIPS adjustment factor under
subparagraph (A) for the eligible professional
for such year, subject to subparagraph (F)(iv),
the Secretary shall specify an additional
positive MIPS adjustment factor for such
professional and year. Such additional MIPS
adjustment factors shall be in the form of a
percent and determined by the Secretary in a
manner such that professionals having higher
composite performance scores above the
additional performance threshold receive higher
additional MIPS adjustment factors.
(D) Establishment of performance
thresholds.--
(i) Performance threshold.--For each
year of the MIPS, the Secretary shall
compute a performance threshold with
respect to which the composite
performance score of MIPS eligible
professionals shall be compared for
purposes of determining adjustment
factors under subparagraph (A) that are
positive, negative, and zero. Such
performance threshold for a year shall
be the mean or median (as selected by
the Secretary) of the composite
performance scores for all MIPS
eligible professionals with respect to
a prior period specified by the
Secretary. The Secretary may reassess
the selection of the mean or median
under the previous sentence every 3
years.
(ii) Additional performance threshold
for exceptional performance.--In
addition to the performance threshold
under clause (i), for each year of the
MIPS, the Secretary shall compute an
additional performance threshold for
purposes of determining the additional
MIPS adjustment factors under
subparagraph (C). For each such year,
the Secretary shall apply either of the
following methods for computing such
additional performance threshold for
such a year:
(I) The threshold shall be
the score that is equal to the
25th percentile of the range of
possible composite performance
scores above the performance
threshold determined under
clause (i).
(II) The threshold shall be
the score that is equal to the
25th percentile of the actual
composite performance scores
for MIPS eligible professionals
with composite performance
scores at or above the
performance threshold with
respect to the prior period
described in clause (i).
(iii) Special rule for initial 2
years.--With respect to each of the
first two years to which the MIPS
applies, the Secretary shall, prior to
the performance period for such years,
establish a performance threshold for
purposes of determining MIPS adjustment
factors under subparagraph (A) and a
threshold for purposes of determining
additional MIPS adjustment factors
under subparagraph (C). Each such
performance threshold shall--
(I) be based on a period
prior to such performance
periods; and
(II) take into account--
(aa) data available
with respect to
performance on measures
and activities that may
be used under the
performance categories
under subparagraph
(2)(B); and
(bb) other factors
determined appropriate
by the Secretary.
(E) Application of mips adjustment factors.--
In the case of items and services furnished by
a MIPS eligible professional during a year
(beginning with 2019), the amount otherwise
paid under this part with respect to such items
and services and MIPS eligible professional for
such year, shall be multiplied by--
(i) 1, plus
(ii) the sum of--
(I) the MIPS adjustment
factor determined under
subparagraph (A) divided by
100, and
(II) as applicable, the
additional MIPS adjustment
factor determined under
subparagraph (C) divided by
100.
(F) Aggregate application of mips adjustment
factors.--
(i) Application of scaling factor.--
(I) In general.--With respect
to positive MIPS adjustment
factors under subparagraph
(A)(ii)(I) for eligible
professionals whose composite
performance score is above the
performance threshold under
subparagraph (D)(i) for such
year, subject to subclause
(II), the Secretary shall
increase or decrease such
adjustment factors by a scaling
factor in order to ensure that
the budget neutrality
requirement of clause (ii) is
met.
(II) Scaling factor limit.--
In no case may the scaling
factor applied under this
clause exceed 3.0.
(ii) Budget neutrality requirement.--
(I) In general.--Subject to
clause (iii), the Secretary
shall ensure that the estimated
amount described in subclause
(II) for a year is equal to the
estimated amount described in
subclause (III) for such year.
(II) Aggregate increases.--
The amount described in this
subclause is the estimated
increase in the aggregate
allowed charges resulting from
the application of positive
MIPS adjustment factors under
subparagraph (A) (after
application of the scaling
factor described in clause (i))
to MIPS eligible professionals
whose composite performance
score for a year is above the
performance threshold under
subparagraph (D)(i) for such
year.
(III) Aggregate decreases.--
The amount described in this
subclause is the estimated
decrease in the aggregate
allowed charges resulting from
the application of negative
MIPS adjustment factors under
subparagraph (A) to MIPS
eligible professionals whose
composite performance score for
a year is below the performance
threshold under subparagraph
(D)(i) for such year.
(iii) Exceptions.--
(I) In the case that all MIPS
eligible professionals receive
composite performance scores
for a year that are below the
performance threshold under
subparagraph (D)(i) for such
year, the negative MIPS
adjustment factors under
subparagraph (A) shall apply
with respect to such MIPS
eligible professionals and the
budget neutrality requirement
of clause (ii) and the
additional adjustment factors
under clause (iv) shall not
apply for such year.
(II) In the case that, with
respect to a year, the
application of clause (i)
results in a scaling factor
equal to the maximum scaling
factor specified in clause
(i)(II), such scaling factor
shall apply and the budget
neutrality requirement of
clause (ii) shall not apply for
such year.
(iv) Additional incentive payment
adjustments.--
(I) In general.--Subject to
subclause (II), in specifying
the MIPS additional adjustment
factors under subparagraph (C)
for each applicable MIPS
eligible professional for a
year, the Secretary shall
ensure that the estimated
aggregate increase in payments
under this part resulting from
the application of such
additional adjustment factors
for MIPS eligible professionals
in a year shall be equal (as
estimated by the Secretary) to
$500,000,000 for each year
beginning with 2019 and ending
with 2024.
(II) Limitation on additional
incentive payment
adjustments.--The MIPS
additional adjustment factor
under subparagraph (C) for a
year for an applicable MIPS
eligible professional whose
composite performance score is
above the additional
performance threshold under
subparagraph (D)(ii) for such
year shall not exceed 10
percent. The application of the
previous sentence may result in
an aggregate amount of
additional incentive payments
that are less than the amount
specified in subclause (I).
(7) Announcement of result of adjustments.--Under the
MIPS, the Secretary shall, not later than 30 days prior
to January 1 of the year involved, make available to
MIPS eligible professionals the MIPS adjustment factor
(and, as applicable, the additional MIPS adjustment
factor) under paragraph (6) applicable to the eligible
professional for items and services furnished by the
professional for such year. The Secretary may include
such information in the confidential feedback under
paragraph (12).
(8) No effect in subsequent years.--The MIPS
adjustment factors and additional MIPS adjustment
factors under paragraph (6) shall apply only with
respect to the year involved, and the Secretary shall
not take into account such adjustment factors in making
payments to a MIPS eligible professional under this
part in a subsequent year.
(9) Public reporting.--
(A) In general.--The Secretary shall, in an
easily understandable format, make available on
the Physician Compare Internet website of the
Centers for Medicare & Medicaid Services the
following:
(i) Information regarding the
performance of MIPS eligible
professionals under the MIPS, which--
(I) shall include the
composite score for each such
MIPS eligible professional and
the performance of each such
MIPS eligible professional with
respect to each performance
category; and
(II) may include the
performance of each such MIPS
eligible professional with
respect to each measure or
activity specified in paragraph
(2)(B).
(ii) The names of eligible
professionals in eligible alternative
payment models (as defined in section
1833(z)(3)(D)) and, to the extent
feasible, the names of such eligible
alternative payment models and
performance of such models.
(B) Disclosure.--The information made
available under this paragraph shall indicate,
where appropriate, that publicized information
may not be representative of the eligible
professional's entire patient population, the
variety of services furnished by the eligible
professional, or the health conditions of
individuals treated.
(C) Opportunity to review and submit
corrections.--The Secretary shall provide for
an opportunity for a professional described in
subparagraph (A) to review, and submit
corrections for, the information to be made
public with respect to the professional under
such subparagraph prior to such information
being made public.
(D) Aggregate information.--The Secretary
shall periodically post on the Physician
Compare Internet website aggregate information
on the MIPS, including the range of composite
scores for all MIPS eligible professionals and
the range of the performance of all MIPS
eligible professionals with respect to each
performance category.
(10) Consultation.--The Secretary shall consult with
stakeholders in carrying out the MIPS, including for
the identification of measures and activities under
paragraph (2)(B) and the methodologies developed under
paragraphs (5)(A) and (6) and regarding the use of
qualified clinical data registries. Such consultation
shall include the use of a request for information or
other mechanisms determined appropriate.
(11) Technical assistance to small practices and
practices in health professional shortage areas.--
(A) In general.--The Secretary shall enter
into contracts or agreements with appropriate
entities (such as quality improvement
organizations, regional extension centers (as
described in section 3012(c) of the Public
Health Service Act), or regional health
collaboratives) to offer guidance and
assistance to MIPS eligible professionals in
practices of 15 or fewer professionals (with
priority given to such practices located in
rural areas, health professional shortage areas
(as designated under in section 332(a)(1)(A) of
such Act), and medically underserved areas, and
practices with low composite scores) with
respect to--
(i) the performance categories
described in clauses (i) through (iv)
of paragraph (2)(A); or
(ii) how to transition to the
implementation of and participation in
an alternative payment model as
described in section 1833(z)(3)(C).
(B) Funding for technical assistance.--For
purposes of implementing subparagraph (A), the
Secretary shall provide for the transfer from
the Federal Supplementary Medical Insurance
Trust Fund established under section 1841 to
the Centers for Medicare & Medicaid Services
Program Management Account of $20,000,000 for
each of fiscal years 2016 through 2020. Amounts
transferred under this subparagraph for a
fiscal year shall be available until expended.
(12) Feedback and information to improve
performance.--
(A) Performance feedback.--
(i) In general.--Beginning July 1,
2017, the Secretary--
(I) shall make available
timely (such as quarterly)
confidential feedback to MIPS
eligible professionals on the
performance of such
professionals with respect to
the performance categories
under clauses (i) and (ii) of
paragraph (2)(A); and
(II) may make available
confidential feedback to such
professionals on the
performance of such
professionals with respect to
the performance categories
under clauses (iii) and (iv) of
such paragraph.
(ii) Mechanisms.--The Secretary may
use one or more mechanisms to make
feedback available under clause (i),
which may include use of a web-based
portal or other mechanisms determined
appropriate by the Secretary. With
respect to the performance category
described in paragraph (2)(A)(i),
feedback under this subparagraph shall,
to the extent an eligible professional
chooses to participate in a data
registry for purposes of this
subsection (including registries under
subsections (k) and (m)), be provided
based on performance on quality
measures reported through the use of
such registries. With respect to any
other performance category described in
paragraph (2)(A), the Secretary shall
encourage provision of feedback through
qualified clinical data registries as
described in subsection (m)(3)(E)).
(iii) Use of data.--For purposes of
clause (i), the Secretary may use data,
with respect to a MIPS eligible
professional, from periods prior to the
current performance period and may use
rolling periods in order to make
illustrative calculations about the
performance of such professional.
(iv) Disclosure exemption.--Feedback
made available under this subparagraph
shall be exempt from disclosure under
section 552 of title 5, United States
Code.
(v) Receipt of information.--The
Secretary may use the mechanisms
established under clause (ii) to
receive information from professionals,
such as information with respect to
this subsection.
(B) Additional information.--
(i) In general.--Beginning July 1,
2018, the Secretary shall make
available to MIPS eligible
professionals information, with respect
to individuals who are patients of such
MIPS eligible professionals, about
items and services for which payment is
made under this title that are
furnished to such individuals by other
suppliers and providers of services,
which may include information described
in clause (ii). Such information may be
made available under the previous
sentence to such MIPS eligible
professionals by mechanisms determined
appropriate by the Secretary, which may
include use of a web-based portal. Such
information may be made available in
accordance with the same or similar
terms as data are made available to
accountable care organizations
participating in the shared savings
program under section 1899.
(ii) Type of information.--For
purposes of clause (i), the information
described in this clause, is the
following:
(I) With respect to selected
items and services (as
determined appropriate by the
Secretary) for which payment is
made under this title and that
are furnished to individuals,
who are patients of a MIPS
eligible professional, by
another supplier or provider of
services during the most recent
period for which data are
available (such as the most
recent three-month period),
such as the name of such
providers furnishing such items
and services to such patients
during such period, the types
of such items and services so
furnished, and the dates such
items and services were so
furnished.
(II) Historical data, such as
averages and other measures of
the distribution if
appropriate, of the total, and
components of, allowed charges
(and other figures as
determined appropriate by the
Secretary).
(13) Review.--
(A) Targeted review.--The Secretary shall
establish a process under which a MIPS eligible
professional may seek an informal review of the
calculation of the MIPS adjustment factor (or
factors) applicable to such eligible
professional under this subsection for a year.
The results of a review conducted pursuant to
the previous sentence shall not be taken into
account for purposes of paragraph (6) with
respect to a year (other than with respect to
the calculation of such eligible professional's
MIPS adjustment factor for such year or
additional MIPS adjustment factor for such
year) after the factors determined in
subparagraph (A) and subparagraph (C) of such
paragraph have been determined for such year.
(B) Limitation.--Except as provided for in
subparagraph (A), there shall be no
administrative or judicial review under section
1869, section 1878, or otherwise of the
following:
(i) The methodology used to determine
the amount of the MIPS adjustment
factor under paragraph (6)(A) and the
amount of the additional MIPS
adjustment factor under paragraph
(6)(C) and the determination of such
amounts.
(ii) The establishment of the
performance standards under paragraph
(3) and the performance period under
paragraph (4).
(iii) The identification of measures
and activities specified under
paragraph (2)(B) and information made
public or posted on the Physician
Compare Internet website of the Centers
for Medicare & Medicaid Services under
paragraph (9).
(iv) The methodology developed under
paragraph (5) that is used to calculate
performance scores and the calculation
of such scores, including the weighting
of measures and activities under such
methodology.
(r) Collaborating With the Physician, Practitioner, and Other
Stakeholder Communities To Improve Resource Use Measurement.--
(1) In general.--In order to involve the physician,
practitioner, and other stakeholder communities in
enhancing the infrastructure for resource use
measurement, including for purposes of the Merit-based
Incentive Payment System under subsection (q) and
alternative payment models under section 1833(z), the
Secretary shall undertake the steps described in the
succeeding provisions of this subsection.
(2) Development of care episode and patient condition
groups and classification codes.--
(A) In general.--In order to classify similar
patients into care episode groups and patient
condition groups, the Secretary shall undertake
the steps described in the succeeding
provisions of this paragraph.
(B) Public availability of existing efforts
to design an episode grouper.--Not later than
180 days after the date of the enactment of
this subsection, the Secretary shall post on
the Internet website of the Centers for
Medicare & Medicaid Services a list of the
episode groups developed pursuant to subsection
(n)(9)(A) and related descriptive information.
(C) Stakeholder input.--The Secretary shall
accept, through the date that is 120 days after
the day the Secretary posts the list pursuant
to subparagraph (B), suggestions from physician
specialty societies, applicable practitioner
organizations, and other stakeholders for
episode groups in addition to those posted
pursuant to such subparagraph, and specific
clinical criteria and patient characteristics
to classify patients into--
(i) care episode groups; and
(ii) patient condition groups.
(D) Development of proposed classification
codes.--
(i) In general.--Taking into account
the information described in
subparagraph (B) and the information
received under subparagraph (C), the
Secretary shall--
(I) establish care episode
groups and patient condition
groups, which account for a
target of an estimated \1/2\ of
expenditures under parts A and
B (with such target increasing
over time as appropriate); and
(II) assign codes to such
groups.
(ii) Care episode groups.--In
establishing the care episode groups
under clause (i), the Secretary shall
take into account--
(I) the patient's clinical
problems at the time items and
services are furnished during
an episode of care, such as the
clinical conditions or
diagnoses, whether or not
inpatient hospitalization
occurs, and the principal
procedures or services
furnished; and
(II) other factors determined
appropriate by the Secretary.
(iii) Patient condition groups.--In
establishing the patient condition
groups under clause (i), the Secretary
shall take into account--
(I) the patient's clinical
history at the time of a
medical visit, such as the
patient's combination of
chronic conditions, current
health status, and recent
significant history (such as
hospitalization and major
surgery during a previous
period, such as 3 months); and
(II) other factors determined
appropriate by the Secretary,
such as eligibility status
under this title (including
eligibility under section
226(a), 226(b), or 226A, and
dual eligibility under this
title and title XIX).
(E) Draft care episode and patient condition
groups and classification codes.--Not later
than 270 days after the end of the comment
period described in subparagraph (C), the
Secretary shall post on the Internet website of
the Centers for Medicare & Medicaid Services a
draft list of the care episode and patient
condition codes established under subparagraph
(D) (and the criteria and characteristics
assigned to such code).
(F) Solicitation of input.--The Secretary
shall seek, through the date that is 120 days
after the Secretary posts the list pursuant to
subparagraph (E), comments from physician
specialty societies, applicable practitioner
organizations, and other stakeholders,
including representatives of individuals
entitled to benefits under part A or enrolled
under this part, regarding the care episode and
patient condition groups (and codes) posted
under subparagraph (E). In seeking such
comments, the Secretary shall use one or more
mechanisms (other than notice and comment
rulemaking) that may include use of open door
forums, town hall meetings, or other
appropriate mechanisms.
(G) Operational list of care episode and
patient condition groups and codes.--Not later
than 270 days after the end of the comment
period described in subparagraph (F), taking
into account the comments received under such
subparagraph, the Secretary shall post on the
Internet website of the Centers for Medicare &
Medicaid Services an operational list of care
episode and patient condition codes (and the
criteria and characteristics assigned to such
code).
(H) Subsequent revisions.--Not later than
November 1 of each year (beginning with 2018),
the Secretary shall, through rulemaking, make
revisions to the operational lists of care
episode and patient condition codes as the
Secretary determines may be appropriate. Such
revisions may be based on experience, new
information developed pursuant to subsection
(n)(9)(A), and input from the physician
specialty societies, applicable practitioner
organizations, and other stakeholders,
including representatives of individuals
entitled to benefits under part A or enrolled
under this part.
(3) Attribution of patients to physicians or
practitioners.--
(A) In general.--In order to facilitate the
attribution of patients and episodes (in whole
or in part) to one or more physicians or
applicable practitioners furnishing items and
services, the Secretary shall undertake the
steps described in the succeeding provisions of
this paragraph.
(B) Development of patient relationship
categories and codes.--The Secretary shall
develop patient relationship categories and
codes that define and distinguish the
relationship and responsibility of a physician
or applicable practitioner with a patient at
the time of furnishing an item or service. Such
patient relationship categories shall include
different relationships of the physician or
applicable practitioner to the patient (and the
codes may reflect combinations of such
categories), such as a physician or applicable
practitioner who--
(i) considers themself to have the
primary responsibility for the general
and ongoing care for the patient over
extended periods of time;
(ii) considers themself to be the
lead physician or practitioner and who
furnishes items and services and
coordinates care furnished by other
physicians or practitioners for the
patient during an acute episode;
(iii) furnishes items and services to
the patient on a continuing basis
during an acute episode of care, but in
a supportive rather than a lead role;
(iv) furnishes items and services to
the patient on an occasional basis,
usually at the request of another
physician or practitioner; or
(v) furnishes items and services only
as ordered by another physician or
practitioner.
(C) Draft list of patient relationship
categories and codes.--Not later than one year
after the date of the enactment of this
subsection, the Secretary shall post on the
Internet website of the Centers for Medicare &
Medicaid Services a draft list of the patient
relationship categories and codes developed
under subparagraph (B).
(D) Stakeholder input.--The Secretary shall
seek, through the date that is 120 days after
the Secretary posts the list pursuant to
subparagraph (C), comments from physician
specialty societies, applicable practitioner
organizations, and other stakeholders,
including representatives of individuals
entitled to benefits under part A or enrolled
under this part, regarding the patient
relationship categories and codes posted under
subparagraph (C). In seeking such comments, the
Secretary shall use one or more mechanisms
(other than notice and comment rulemaking) that
may include open door forums, town hall
meetings, web-based forums, or other
appropriate mechanisms.
(E) Operational list of patient relationship
categories and codes.--Not later than 240 days
after the end of the comment period described
in subparagraph (D), taking into account the
comments received under such subparagraph, the
Secretary shall post on the Internet website of
the Centers for Medicare & Medicaid Services an
operational list of patient relationship
categories and codes.
(F) Subsequent revisions.--Not later than
November 1 of each year (beginning with 2018),
the Secretary shall, through rulemaking, make
revisions to the operational list of patient
relationship categories and codes as the
Secretary determines appropriate. Such
revisions may be based on experience, new
information developed pursuant to subsection
(n)(9)(A), and input from the physician
specialty societies, applicable practitioner
organizations, and other stakeholders,
including representatives of individuals
entitled to benefits under part A or enrolled
under this part.
(4) Reporting of information for resource use
measurement.--Claims submitted for items and services
furnished by a physician or applicable practitioner on
or after January 1, 2018, shall, as determined
appropriate by the Secretary, include--
(A) applicable codes established under
paragraphs (2) and (3); and
(B) the national provider identifier of the
ordering physician or applicable practitioner
(if different from the billing physician or
applicable practitioner).
(5) Methodology for resource use analysis.--
(A) In general.--In order to evaluate the
resources used to treat patients (with respect
to care episode and patient condition groups),
the Secretary shall, as the Secretary
determines appropriate--
(i) use the patient relationship
codes reported on claims pursuant to
paragraph (4) to attribute patients (in
whole or in part) to one or more
physicians and applicable
practitioners;
(ii) use the care episode and patient
condition codes reported on claims
pursuant to paragraph (4) as a basis to
compare similar patients and care
episodes and patient condition groups;
and
(iii) conduct an analysis of resource
use (with respect to care episodes and
patient condition groups of such
patients).
(B) Analysis of patients of physicians and
practitioners.--In conducting the analysis
described in subparagraph (A)(iii) with respect
to patients attributed to physicians and
applicable practitioners, the Secretary shall,
as feasible--
(i) use the claims data experience of
such patients by patient condition
codes during a common period, such as
12 months; and
(ii) use the claims data experience
of such patients by care episode
codes--
(I) in the case of episodes
without a hospitalization,
during periods of time (such as
the number of days) determined
appropriate by the Secretary;
and
(II) in the case of episodes
with a hospitalization, during
periods of time (such as the
number of days) before, during,
and after the hospitalization.
(C) Measurement of resource use.--In
measuring such resource use, the Secretary--
(i) shall use per patient total
allowed charges for all services under
part A and this part (and, if the
Secretary determines appropriate, part
D) for the analysis of patient resource
use, by care episode codes and by
patient condition codes; and
(ii) may, as determined appropriate,
use other measures of allowed charges
(such as subtotals for categories of
items and services) and measures of
utilization of items and services (such
as frequency of specific items and
services and the ratio of specific
items and services among attributed
patients or episodes).
(D) Stakeholder input.--The Secretary shall
seek comments from the physician specialty
societies, applicable practitioner
organizations, and other stakeholders,
including representatives of individuals
entitled to benefits under part A or enrolled
under this part, regarding the resource use
methodology established pursuant to this
paragraph. In seeking comments the Secretary
shall use one or more mechanisms (other than
notice and comment rulemaking) that may include
open door forums, town hall meetings, web-based
forums, or other appropriate mechanisms.
(6) Implementation.--To the extent that the Secretary
contracts with an entity to carry out any part of the
provisions of this subsection, the Secretary may not
contract with an entity or an entity with a subcontract
if the entity or subcontracting entity currently makes
recommendations to the Secretary on relative values for
services under the fee schedule for physicians'
services under this section.
(7) Limitation.--There shall be no administrative or
judicial review under section 1869, section 1878, or
otherwise of--
(A) care episode and patient condition groups
and codes established under paragraph (2);
(B) patient relationship categories and codes
established under paragraph (3); and
(C) measurement of, and analyses of resource
use with respect to, care episode and patient
condition codes and patient relationship codes
pursuant to paragraph (5).
(8) Administration.--Chapter 35 of title 44, United
States Code, shall not apply to this section.
(9) Definitions.--In this subsection:
(A) Physician.--The term ``physician'' has
the meaning given such term in section
1861(r)(1).
(B) Applicable practitioner.--The term
``applicable practitioner'' means--
(i) a physician assistant, nurse
practitioner, and clinical nurse
specialist (as such terms are defined
in section 1861(aa)(5)), and a
certified registered nurse anesthetist
(as defined in section 1861(bb)(2));
and
(ii) beginning January 1, 2019, such
other eligible professionals (as
defined in subsection (k)(3)(B)) as
specified by the Secretary.
(10) Clarification.--The provisions of sections
1890(b)(7) and 1890A shall not apply to this
subsection.
(s) Priorities and Funding for Measure Development.--
(1) Plan identifying measure development priorities
and timelines.--
(A) Draft measure development plan.--Not
later than January 1, 2016, the Secretary shall
develop, and post on the Internet website of
the Centers for Medicare & Medicaid Services, a
draft plan for the development of quality
measures for application under the applicable
provisions (as defined in paragraph (5)). Under
such plan the Secretary shall--
(i) address how measures used by
private payers and integrated delivery
systems could be incorporated under
title XVIII;
(ii) describe how coordination, to
the extent possible, will occur across
organizations developing such measures;
and
(iii) take into account how clinical
best practices and clinical practice
guidelines should be used in the
development of quality measures.
(B) Quality domains.--For purposes of this
subsection, the term ``quality domains'' means
at least the following domains:
(i) Clinical care.
(ii) Safety.
(iii) Care coordination.
(iv) Patient and caregiver
experience.
(v) Population health and prevention.
(C) Consideration.--In developing the draft
plan under this paragraph, the Secretary shall
consider--
(i) gap analyses conducted by the
entity with a contract under section
1890(a) or other contractors or
entities;
(ii) whether measures are applicable
across health care settings;
(iii) clinical practice improvement
activities submitted under subsection
(q)(2)(C)(iv) for identifying possible
areas for future measure development
and identifying existing gaps with
respect to such measures; and
(iv) the quality domains applied
under this subsection.
(D) Priorities.--In developing the draft plan
under this paragraph, the Secretary shall give
priority to the following types of measures:
(i) Outcome measures, including
patient reported outcome and functional
status measures.
(ii) Patient experience measures.
(iii) Care coordination measures.
(iv) Measures of appropriate use of
services, including measures of over
use.
(E) Stakeholder input.--The Secretary shall
accept through March 1, 2016, comments on the
draft plan posted under paragraph (1)(A) from
the public, including health care providers,
payers, consumers, and other stakeholders.
(F) Final measure development plan.--Not
later than May 1, 2016, taking into account the
comments received under this subparagraph, the
Secretary shall finalize the plan and post on
the Internet website of the Centers for
Medicare & Medicaid Services an operational
plan for the development of quality measures
for use under the applicable provisions. Such
plan shall be updated as appropriate.
(2) Contracts and other arrangements for quality
measure development.--
(A) In general.--The Secretary shall enter
into contracts or other arrangements with
entities for the purpose of developing,
improving, updating, or expanding in accordance
with the plan under paragraph (1) quality
measures for application under the applicable
provisions. Such entities shall include
organizations with quality measure development
expertise.
(B) Prioritization.--
(i) In general.--In entering into
contracts or other arrangements under
subparagraph (A), the Secretary shall
give priority to the development of the
types of measures described in
paragraph (1)(D).
(ii) Consideration.--In selecting
measures for development under this
subsection, the Secretary shall
consider--
(I) whether such measures
would be electronically
specified; and
(II) clinical practice
guidelines to the extent that
such guidelines exist.
(3) Annual report by the secretary.--
(A) In general.--Not later than May 1, 2017,
and annually thereafter, the Secretary shall
post on the Internet website of the Centers for
Medicare & Medicaid Services a report on the
progress made in developing quality measures
for application under the applicable
provisions.
(B) Requirements.--Each report submitted
pursuant to subparagraph (A) shall include the
following:
(i) A description of the Secretary's
efforts to implement this paragraph.
(ii) With respect to the measures
developed during the previous year--
(I) a description of the
total number of quality
measures developed and the
types of such measures, such as
an outcome or patient
experience measure;
(II) the name of each measure
developed;
(III) the name of the
developer and steward of each
measure;
(IV) with respect to each
type of measure, an estimate of
the total amount expended under
this title to develop all
measures of such type; and
(V) whether the measure would
be electronically specified.
(iii) With respect to measures in
development at the time of the report--
(I) the information described
in clause (ii), if available;
and
(II) a timeline for
completion of the development
of such measures.
(iv) A description of any updates to
the plan under paragraph (1) (including
newly identified gaps and the status of
previously identified gaps) and the
inventory of measures applicable under
the applicable provisions.
(v) Other information the Secretary
determines to be appropriate.
(4) Stakeholder input.--With respect to paragraph
(1), the Secretary shall seek stakeholder input with
respect to--
(A) the identification of gaps where no
quality measures exist, particularly with
respect to the types of measures described in
paragraph (1)(D);
(B) prioritizing quality measure development
to address such gaps; and
(C) other areas related to quality measure
development determined appropriate by the
Secretary.
(5) Definition of applicable provisions.--In this
subsection, the term ``applicable provisions'' means
the following provisions:
(A) Subsection (q)(2)(B)(i).
(B) Section 1833(z)(2)(C).
(6) Funding.--For purposes of carrying out this
subsection, the Secretary shall provide for the
transfer, from the Federal Supplementary Medical
Insurance Trust Fund under section 1841, of $15,000,000
to the Centers for Medicare & Medicaid Services Program
Management Account for each of fiscal years 2015
through 2019. Amounts transferred under this paragraph
shall remain available through the end of fiscal year
2022.
(7) Administration.--Chapter 35 of title 44, United
States Code, shall not apply to the collection of
information for the development of quality measures.
* * * * * * *
Part C--Medicare+Choice Program
* * * * * * *
benefits and beneficiary protections
Sec. 1852. (a) Basic Benefits.--
(1) Requirement.--
(A) In general.--Except as provided in
section 1859(b)(3) for MSA plans and except as
provided in paragraph (6) for MA regional
plans, each Medicare+Choice plan shall provide
to members enrolled under this part, through
providers and other persons that meet the
applicable requirements of this title and part
A of title XI, benefits under the original
medicare fee-for-service program option (and,
for plan years before 2006, additional benefits
required under section 1854(f)(1)(A)).
(B) Benefits under the original medicare fee-
for-service program option defined.--
(i) In general.--For purposes of this
part, the term ``benefits under the
original medicare fee-for-service
program option'' means those items and
services (other than hospice care or
coverage for organ acquisitions for
kidney transplants, including as
covered under section 1881(d)) for
which benefits are available under
parts A and B to individuals entitled
to benefits under part A and enrolled
under part B, with cost-sharing for
those services as required under parts
A and B or, subject to clause (iii), an
actuarially equivalent level of cost-
sharing as determined in this part. For
plan year 2020 and each subsequent plan
year, for purposes of subsection (m)
and section 1854, in the case that an
MA plan makes an election described in
subsection (m)(1) with respect to such
plan year, additional telehealth
services shall be treated as a benefit
under the original medicare fee-for-
service program option with respect to
such plan and plan year.
(ii) Special rule for regional
plans.--In the case of an MA regional
plan in determining an actuarially
equivalent level of cost-sharing with
respect to benefits under the original
medicare fee-for-service program
option, there shall only be taken into
account, with respect to the
application of section 1858(b)(2), such
expenses only with respect to
subparagraph (A) of such section.
(iii) Limitation on variation of cost
sharing for certain benefits.--Subject
to clause (v), cost-sharing for
services described in clause (iv) shall
not exceed the cost-sharing required
for those services under parts A and B.
(iv) Services described.--The
following services are described in
this clause:
(I) Chemotherapy
administration services.
(II) Renal dialysis services
(as defined in section
1881(b)(14)(B)).
(III) Skilled nursing care.
(IV) Such other services that
the Secretary determines
appropriate (including services
that the Secretary determines
require a high level of
predictability and transparency
for beneficiaries).
(v) Exception.--In the case of
services described in clause (iv) for
which there is no cost-sharing required
under parts A and B, cost-sharing may
be required for those services in
accordance with clause (i).
(2) Satisfaction of requirement.--
(A) In general.--A Medicare+Choice plan
(other than an MSA plan) offered by a
Medicare+Choice organization satisfies
paragraph (1)(A), with respect to benefits for
items and services furnished other than through
a provider or other person that has a contract
with the organization offering the plan, if the
plan provides payment in an amount so that--
(i) the sum of such payment amount
and any cost sharing provided for under
the plan, is equal to at least
(ii) the total dollar amount of
payment for such items and services as
would otherwise be authorized under
parts A and B (including any balance
billing permitted under such parts).
(B) Reference to related provisions.--For
provision relating to--
(i) limitations on balance billing
against Medicare+Choice organizations
for non-contract providers, see
sections 1852(k) and 1866(a)(1)(O), and
(ii) limiting actuarial value of
enrollee liability for covered
benefits, see section 1854(e).
(C) Election of uniform coverage
determination.--In the case of a
Medicare+Choice organization that offers a
Medicare+Choice plan in an area in which more
than one local coverage determination is
applied with respect to different parts of the
area, the organization may elect to have the
local coverage determination for the part of
the area that is most beneficial to
Medicare+Choice enrollees (as identified by the
Secretary) apply with respect to all
Medicare+Choice enrollees enrolled in the plan.
(3) Supplemental benefits.--
(A) Benefits included subject to secretary's
approval.--Each Medicare+Choice organization
may provide to individuals enrolled under this
part, other than under an MSA plan (without
affording those individuals an option to
decline the coverage), supplemental health care
benefits that the Secretary may approve. The
Secretary shall approve any such supplemental
benefits unless the Secretary determines that
including such supplemental benefits would
substantially discourage enrollment by
Medicare+Choice eligible individuals with the
organization.
(B) At enrollees' option.--
(i) In general.--Subject to clause
(ii), a Medicare+Choice organization
may provide to individuals enrolled
under this part supplemental health
care benefits that the individuals may
elect, at their option, to have
covered.
(ii) Special rule for msa plans.--A
Medicare+Choice organization may not
provide, under an MSA plan,
supplemental health care benefits that
cover the deductible described in
section 1859(b)(2)(B). In applying the
previous sentence, health benefits
described in section 1882(u)(2)(B)
shall not be treated as covering such
deductible.
(C) Application to Medicare+Choice private
fee-for-service plans.--Nothing in this
paragraph shall be construed as preventing a
Medicare+Choice private fee-for-service plan
from offering supplemental benefits that
include payment for some or all of the balance
billing amounts permitted consistent with
section 1852(k) and coverage of additional
services that the plan finds to be medically
necessary. Such benefits may include reductions
in cost-sharing below the actuarial value
specified in section 1854(e)(4)(B).
(4) Organization as secondary payer.--Notwithstanding
any other provision of law, a Medicare+Choice
organization may (in the case of the provision of items
and services to an individual under a Medicare+Choice
plan under circumstances in which payment under this
title is made secondary pursuant to section 1862(b)(2))
charge or authorize the provider of such services to
charge, in accordance with the charges allowed under a
law, plan, or policy described in such section--
(A) the insurance carrier, employer, or other
entity which under such law, plan, or policy is
to pay for the provision of such services, or
(B) such individual to the extent that the
individual has been paid under such law, plan,
or policy for such services.
(5) National coverage determinations and legislative
changes in benefits.--If there is a national coverage
determination or legislative change in benefits
required to be provided under this part made in the
period beginning on the date of an announcement under
section 1853(b) and ending on the date of the next
announcement under such section and the Secretary
projects that the determination will result in a
significant change in the costs to a Medicare+Choice
organization of providing the benefits that are the
subject of such national coverage determination and
that such change in costs was not incorporated in the
determination of the annual Medicare+Choice capitation
rate under section 1853 included in the announcement
made at the beginning of such period, then, unless
otherwise required by law--
(A) such determination or legislative change
in benefits shall not apply to contracts under
this part until the first contract year that
begins after the end of such period, and
(B) if such coverage determination or
legislative change provides for coverage of
additional benefits or coverage under
additional circumstances, section 1851(i)(1)
shall not apply to payment for such additional
benefits or benefits provided under such
additional circumstances until the first
contract year that begins after the end of such
period.
The projection under the previous sentence shall be
based on an analysis by the Chief Actuary of the
Centers for Medicare & Medicaid Services of the
actuarial costs associated with the coverage
determination or legislative change in benefits.
(6) Special benefit rules for regional plans.--In the
case of an MA plan that is an MA regional plan,
benefits under the plan shall include the benefits
described in paragraphs (1) and (2) of section 1858(b).
(7) Limitation on cost-sharing for dual eligibles and
qualified medicare beneficiaries.--In the case of an
individual who is a full-benefit dual eligible
individual (as defined in section 1935(c)(6)) or a
qualified medicare beneficiary (as defined in section
1905(p)(1)) and who is enrolled in a specialized
Medicare Advantage plan for special needs individuals
described in section 1859(b)(6)(B)(ii), the plan may
not impose cost-sharing that exceeds the amount of
cost-sharing that would be permitted with respect to
the individual under title XIX if the individual were
not enrolled in such plan.
(b) Antidiscrimination.--
(1) Beneficiaries.--A Medicare Advantage organization
may not deny, limit, or condition the coverage or
provision of benefits under this part, for individuals
permitted to be enrolled with the organization under
this part, based on any health status-related factor
described in section 2702(a)(1) of the Public Health
Service Act. The Secretary shall not approve a plan of
an organization if the Secretary determines that the
design of the plan and its benefits are likely to
substantially discourage enrollment by certain MA
eligible individuals with the organization.
(2) Providers.--A Medicare+Choice organization shall
not discriminate with respect to participation,
reimbursement, or indemnification as to any provider
who is acting within the scope of the provider's
license or certification under applicable State law,
solely on the basis of such license or certification.
This paragraph shall not be construed to prohibit a
plan from including providers only to the extent
necessary to meet the needs of the plan's enrollees or
from establishing any measure designed to maintain
quality and control costs consistent with the
responsibilities of the plan.
(c) Disclosure Requirements.--
(1) Detailed description of plan provisions.--A
Medicare+Choice organization shall disclose, in clear,
accurate, and standardized form to each enrollee with a
Medicare+Choice plan offered by the organization under
this part at the time of enrollment and at least
annually thereafter, the following information
regarding such plan:
(A) Service area.--The plan's service area.
(B) Benefits.--Benefits offered under the
plan, including information described in
section 1851(d)(3)(A) and exclusions from
coverage and, if it is an MSA plan, a
comparison of benefits under such a plan with
benefits under other Medicare+Choice plans.
(C) Access.--The number, mix, and
distribution of plan providers, out-of-network
coverage (if any) provided by the plan, and any
point-of-service option (including the
supplemental premium for such option).
(D) Out-of-area coverage.--Out-of-area
coverage provided by the plan.
(E) Emergency coverage.--Coverage of
emergency services, including--
(i) the appropriate use of emergency
services, including use of the 911
telephone system or its local
equivalent in emergency situations and
an explanation of what constitutes an
emergency situation;
(ii) the process and procedures of
the plan for obtaining emergency
services; and
(iii) the locations of (I) emergency
departments, and (II) other settings,
in which plan physicians and hospitals
provide emergency services and post-
stabilization care.
(F) Supplemental benefits.--Supplemental
benefits available from the organization
offering the plan, including--
(i) whether the supplemental benefits
are optional,
(ii) the supplemental benefits
covered, and
(iii) the Medicare+Choice monthly
supplemental beneficiary premium for
the supplemental benefits.
(G) Prior authorization rules.--Rules
regarding prior authorization or other review
requirements that could result in nonpayment.
(H) Plan grievance and appeals procedures.--
All plan appeal or grievance rights and
procedures.
(I) Quality improvement program.--A
description of the organization's quality
improvement program under subsection (e).
(2) Disclosure upon request.--Upon request of a
Medicare+Choice eligible individual, a Medicare+Choice
organization must provide the following information to
such individual:
(A) The general coverage information and
general comparative plan information made
available under clauses (i) and (ii) of section
1851(d)(2)(A).
(B) Information on procedures used by the
organization to control utilization of services
and expenditures.
(C) Information on the number of grievances,
redeterminations, and appeals and on the
disposition in the aggregate of such matters.
(D) An overall summary description as to the
method of compensation of participating
physicians.
(d) Access to Services.--
(1) In general.--A Medicare+Choice organization
offering a Medicare+Choice plan may select the
providers from whom the benefits under the plan are
provided so long as--
(A) the organization makes such benefits
available and accessible to each individual
electing the plan within the plan service area
with reasonable promptness and in a manner
which assures continuity in the provision of
benefits;
(B) when medically necessary the organization
makes such benefits available and accessible 24
hours a day and 7 days a week;
(C) the plan provides for reimbursement with
respect to services which are covered under
subparagraphs (A) and (B) and which are
provided to such an individual other than
through the organization, if--
(i) the services were not emergency
services (as defined in paragraph (3)),
but (I) the services were medically
necessary and immediately required
because of an unforeseen illness,
injury, or condition, and (II) it was
not reasonable given the circumstances
to obtain the services through the
organization,
(ii) the services were renal dialysis
services and were provided other than
through the organization because the
individual was temporarily out of the
plan's service area, or
(iii) the services are maintenance
care or post-stabilization care covered
under the guidelines established under
paragraph (2);
(D) the organization provides access to
appropriate providers, including credentialed
specialists, for medically necessary treatment
and services; and
(E) coverage is provided for emergency
services (as defined in paragraph (3)) without
regard to prior authorization or the emergency
care provider's contractual relationship with
the organization.
(2) Guidelines respecting coordination of post-
stabilization care.--A Medicare+Choice plan shall
comply with such guidelines as the Secretary may
prescribe relating to promoting efficient and timely
coordination of appropriate maintenance and post-
stabilization care of an enrollee after the enrollee
has been determined to be stable under section 1867.
(3) Definition of emergency services.--In this
subsection--
(A) In general.--The term ``emergency
services'' means, with respect to an individual
enrolled with an organization, covered
inpatient and outpatient services that--
(i) are furnished by a provider that
is qualified to furnish such services
under this title, and
(ii) are needed to evaluate or
stabilize an emergency medical
condition (as defined in subparagraph
(B)).
(B) Emergency medical condition based on
prudent layperson.--The term ``emergency
medical condition'' means a medical condition
manifesting itself by acute symptoms of
sufficient severity (including severe pain)
such that a prudent layperson, who possesses an
average knowledge of health and medicine, could
reasonably expect the absence of immediate
medical attention to result in--
(i) placing the health of the
individual (or, with respect to a
pregnant woman, the health of the woman
or her unborn child) in serious
jeopardy,
(ii) serious impairment to bodily
functions, or
(iii) serious dysfunction of any
bodily organ or part.
(4) Assuring access to services in
medicare+choice private fee-for-service
plans.--In addition to any other requirements
under this part, in the case of a
Medicare+Choice private fee-for-service plan,
the organization offering the plan must
demonstrate to the Secretary that the
organization has sufficient number and range of
health care professionals and providers willing
to provide services under the terms of the
plan. Subject to paragraphs (5) and (6), the
Secretary shall find that an organization has
met such requirement with respect to any
category of health care professional or
provider if, with respect to that category of
provider--
(A) the plan has established payment
rates for covered services furnished by
that category of provider that are not
less than the payment rates provided
for under part A, part B, or both, for
such services, or
(B) the plan has contracts or
agreements (other than deemed contracts
or agreements under subsection (j)(6))
with a sufficient number and range of
providers within such category to meet
the access standards in subparagraphs
(A) through (E) of paragraph (1),
or a combination of both. The previous sentence
shall not be construed as restricting the
persons from whom enrollees under such a plan
may obtain covered benefits, except that, if a
plan entirely meets such requirement with
respect to a category of health care
professional or provider on the basis of
subparagraph (B), it may provide for a higher
beneficiary copayment in the case of health
care professionals and providers of that
category who do not have contracts or
agreements (other than deemed contracts or
agreements under subsection (j)(6)) to provide
covered services under the terms of the plan.
(5) Requirement of certain nonemployer medicare
advantage private fee-for-service plans to use
contracts with providers.--
(A) In general.--For plan year 2011 and
subsequent plan years, in the case of a
Medicare Advantage private fee-for-service plan
not described in paragraph (1) or (2) of
section 1857(i) operating in a network area (as
defined in subparagraph (B)), the plan shall
meet the access standards under paragraph (4)
in that area only through entering into written
contracts as provided for under subparagraph
(B) of such paragraph and not, in whole or in
part, through the establishment of payment
rates meeting the requirements under
subparagraph (A) of such paragraph.
(B) Network area defined.--For purposes of
subparagraph (A), the term ``network area''
means, for a plan year, an area which the
Secretary identifies (in the Secretary's
announcement of the proposed payment rates for
the previous plan year under section
1853(b)(1)(B)) as having at least 2 network-
based plans (as defined in subparagraph (C))
with enrollment under this part as of the first
day of the year in which such announcement is
made.
(C) Network-based plan defined.--
(i) In general.--For purposes of
subparagraph (B), the term ``network-
based plan'' means--
(I) except as provided in
clause (ii), a Medicare
Advantage plan that is a
coordinated care plan described
in section 1851(a)(2)(A)(i);
(II) a network-based MSA
plan; and
(III) a reasonable cost
reimbursement plan under
section 1876.
(ii) Exclusion of non-network
regional ppos.--The term ``network-
based plan'' shall not include an MA
regional plan that, with respect to the
area, meets access adequacy standards
under this part substantially through
the authority of section
422.112(a)(1)(ii) of title 42, Code of
Federal Regulations, rather than
through written contracts.
(6) Requirement of all employer medicare advantage
private fee-for-service plans to use contracts with
providers.--For plan year 2011 and subsequent plan
years, in the case of a Medicare Advantage private fee-
for-service plan that is described in paragraph (1) or
(2) of section 1857(i), the plan shall meet the access
standards under paragraph (4) only through entering
into written contracts as provided for under
subparagraph (B) of such paragraph and not, in whole or
in part, through the establishment of payment rates
meeting the requirements under subparagraph (A) of such
paragraph.
(e) Quality Improvement Program.--
(1) In general.--Each MA organization shall have an
ongoing quality improvement program for the purpose of
improving the quality of care provided to enrollees in
each MA plan offered by such organization.
(2) Chronic care improvement programs.--As part of
the quality improvement program under paragraph (1),
each MA organization shall have a chronic care
improvement program. Each chronic care improvement
program shall have a method for monitoring and
identifying enrollees with multiple or sufficiently
severe chronic conditions that meet criteria
established by the organization for participation under
the program.
(3) Data.--
(A) Collection, analysis, and reporting.--
(i) In general.--Except as provided
in clauses (ii) and (iii) with respect
to plans described in such clauses and
subject to subparagraph (B), as part of
the quality improvement program under
paragraph (1), each MA organization
shall provide for the collection,
analysis, and reporting of data that
permits the measurement of health
outcomes and other indices of quality.
With respect to MA private fee-for-
service plans and MSA plans, the
requirements under the preceding
sentence may not exceed the
requirements under this subparagraph
with respect to MA local plans that are
preferred provider organization plans,
except that, for plan year 2010, the
limitation under clause (iii) shall not
apply and such requirements shall apply
only with respect to administrative
claims data.
(ii) Special requirements for
specialized ma plans for special needs
individuals.--In addition to the data
required to be collected, analyzed, and
reported under clause (i) and
notwithstanding the limitations under
subparagraph (B), as part of the
quality improvement program under
paragraph (1), each MA organization
offering a specialized Medicare
Advantage plan for special needs
individuals shall provide for the
collection, analysis, and reporting of
data that permits the measurement of
health outcomes and other indices of
quality with respect to the
requirements described in paragraphs
(2) through (5) of subsection (f). Such
data may be based on claims data and
shall be at the plan level.
(iii) Application to local preferred
provider organizations and MA regional
plans.--Clause (i) shall apply to MA
organizations with respect to MA local
plans that are preferred provider
organization plans and to MA regional
plans only insofar as services are
furnished by providers or services,
physicians, and other health care
practitioners and suppliers that have
contracts with such organization to
furnish services under such plans.
(iv) Definition of preferred provider
organization plan.--In this
subparagraph, the term ``preferred
provider organization plan'' means an
MA plan that--
(I) has a network of
providers that have agreed to a
contractually specified
reimbursement for covered
benefits with the organization
offering the plan;
(II) provides for
reimbursement for all covered
benefits regardless of whether
such benefits are provided
within such network of
providers; and
(III) is offered by an
organization that is not
licensed or organized under
State law as a health
maintenance organization.
(B) Limitations.--
(i) Types of data.--The Secretary
shall not collect under subparagraph
(A) data on quality, outcomes, and
beneficiary satisfaction to facilitate
consumer choice and program
administration other than the types of
data that were collected by the
Secretary as of November 1, 2003.
(ii) Changes in types of data.--
Subject to subclause (iii), the
Secretary may only change the types of
data that are required to be submitted
under subparagraph (A) after submitting
to Congress a report on the reasons for
such changes that was prepared in
consultation with MA organizations and
private accrediting bodies.
(iii) Construction.--Nothing in the
subsection shall be construed as
restricting the ability of the
Secretary to carry out the duties under
section 1851(d)(4)(D).
(4) Treatment of accreditation.--
(A) In general.--The Secretary shall provide
that a Medicare+Choice organization is deemed
to meet all the requirements described in any
specific clause of subparagraph (B) if the
organization is accredited (and periodically
reaccredited) by a private accrediting
organization under a process that the Secretary
has determined assures that the accrediting
organization applies and enforces standards
that meet or exceed the standards established
under section 1856 to carry out the
requirements in such clause.
(B) Requirements described.--The provisions
described in this subparagraph are the
following:
(i) Paragraphs (1) through (3) of
this subsection (relating to quality
improvement programs).
(ii) Subsection (b) (relating to
antidiscrimination).
(iii) Subsection (d) (relating to
access to services).
(iv) Subsection (h) (relating to
confidentiality and accuracy of
enrollee records).
(v) Subsection (i) (relating to
information on advance directives).
(vi) Subsection (j) (relating to
provider participation rules).
(vii) The requirements described in
section 1860D-4(j), to the extent such
requirements apply under section 1860D-
21(c).
(C) Timely action on applications.--The
Secretary shall determine, within 210 days
after the date the Secretary receives an
application by a private accrediting
organization and using the criteria specified
in section 1865(a)(2), whether the process of
the private accrediting organization meets the
requirements with respect to any specific
clause in subparagraph (B) with respect to
which the application is made. The Secretary
may not deny such an application on the basis
that it seeks to meet the requirements with
respect to only one, or more than one, such
specific clause.
(D) Construction.--Nothing in this paragraph
shall be construed as limiting the authority of
the Secretary under section 1857, including the
authority to terminate contracts with
Medicare+Choice organizations under subsection
(c)(2) of such section.
(f) Grievance Mechanism.--Each Medicare+Choice organization
must provide meaningful procedures for hearing and resolving
grievances between the organization (including any entity or
individual through which the organization provides health care
services) and enrollees with Medicare+Choice plans of the
organization under this part.
(g) Coverage Determinations, Reconsiderations, and Appeals.--
(1) Determinations by organization.--
(A) In general.--A Medicare+Choice
organization shall have a procedure for making
determinations regarding whether an individual
enrolled with the plan of the organization
under this part is entitled to receive a health
service under this section and the amount (if
any) that the individual is required to pay
with respect to such service. Subject to
paragraph (3), such procedures shall provide
for such determination to be made on a timely
basis.
(B) Explanation of determination.--Such a
determination that denies coverage, in whole or
in part, shall be in writing and shall include
a statement in understandable language of the
reasons for the denial and a description of the
reconsideration and appeals processes.
(2) Reconsiderations.--
(A) In general.--The organization shall
provide for reconsideration of a determination
described in paragraph (1)(B) upon request by
the enrollee involved. The reconsideration
shall be within a time period specified by the
Secretary, but shall be made, subject to
paragraph (3), not later than 60 days after the
date of the receipt of the request for
reconsideration.
(B) Physician decision on certain
reconsiderations.--A reconsideration relating
to a determination to deny coverage based on a
lack of medical necessity shall be made only by
a physician with appropriate expertise in the
field of medicine which necessitates treatment
who is other than a physician involved in the
initial determination.
(3) Expedited determinations and reconsiderations.--
(A) Receipt of requests.--
(i) Enrollee requests.--An enrollee
in a Medicare+Choice plan may request,
either in writing or orally, an
expedited determination under paragraph
(1) or an expedited reconsideration
under paragraph (2) by the
Medicare+Choice organization.
(ii) Physician requests.--A
physician, regardless whether the
physician is affiliated with the
organization or not, may request,
either in writing or orally, such an
expedited determination or
reconsideration.
(B) Organization procedures.--
(i) In general.--The Medicare+Choice
organization shall maintain procedures
for expediting organization
determinations and reconsiderations
when, upon request of an enrollee, the
organization determines that the
application of the normal time frame
for making a determination (or a
reconsideration involving a
determination) could seriously
jeopardize the life or health of the
enrollee or the enrollee's ability to
regain maximum function.
(ii) Expedition required for
physician requests.--In the case of a
request for an expedited determination
or reconsideration made under
subparagraph (A)(ii), the organization
shall expedite the determination or
reconsideration if the request
indicates that the application of the
normal time frame for making a
determination (or a reconsideration
involving a determination) could
seriously jeopardize the life or health
of the enrollee or the enrollee's
ability to regain maximum function.
(iii) Timely response.--In cases
described in clauses (i) and (ii), the
organization shall notify the enrollee
(and the physician involved, as
appropriate) of the determination or
reconsideration under time limitations
established by the Secretary, but not
later than 72 hours of the time of
receipt of the request for the
determination or reconsideration (or
receipt of the information necessary to
make the determination or
reconsideration), or such longer period
as the Secretary may permit in
specified cases.
(4) Independent review of certain coverage denials.--
The Secretary shall contract with an independent,
outside entity to review and resolve in a timely manner
reconsiderations that affirm denial of coverage, in
whole or in part. The provisions of section 1869(c)(5)
shall apply to independent outside entities under
contract with the Secretary under this paragraph.
(5) Appeals.--An enrollee with a Medicare+Choice plan
of a Medicare+Choice organization under this part who
is dissatisfied by reason of the enrollee's failure to
receive any health service to which the enrollee
believes the enrollee is entitled and at no greater
charge than the enrollee believes the enrollee is
required to pay is entitled, if the amount in
controversy is $100 or more, to a hearing before the
Secretary to the same extent as is provided in section
205(b), and in any such hearing the Secretary shall
make the organization a party. If the amount in
controversy is $1,000 or more, the individual or
organization shall, upon notifying the other party, be
entitled to judicial review of the Secretary's final
decision as provided in section 205(g), and both the
individual and the organization shall be entitled to be
parties to that judicial review. In applying
subsections (b) and (g) of section 205 as provided in
this paragraph, and in applying section 205(l) thereto,
any reference therein to the Commissioner of Social
Security or the Social Security Administration shall be
considered a reference to the Secretary or the
Department of Health and Human Services, respectively.
The provisions of section 1869(b)(1)(E)(iii) shall
apply with respect to dollar amounts specified in the
first 2 sentences of this paragraph in the same manner
as they apply to the dollar amounts specified in
section 1869(b)(1)(E)(i).
(h) Confidentiality and Accuracy of Enrollee Records.--
Insofar as a Medicare+Choice organization maintains medical
records or other health information regarding enrollees under
this part, the Medicare+Choice organization shall establish
procedures--
(1) to safeguard the privacy of any individually
identifiable enrollee information;
(2) to maintain such records and information in a
manner that is accurate and timely; and
(3) to assure timely access of enrollees to such
records and information.
(i) Information on Advance Directives.--Each Medicare+Choice
organization shall meet the requirement of section 1866(f)
(relating to maintaining written policies and procedures
respecting advance directives).
(j) Rules Regarding Provider Participation.--
(1) Procedures.--Insofar as a Medicare+Choice
organization offers benefits under a Medicare+Choice
plan through agreements with physicians, the
organization shall establish reasonable procedures
relating to the participation (under an agreement
between a physician and the organization) of physicians
under such a plan. Such procedures shall include--
(A) providing notice of the rules regarding
participation,
(B) providing written notice of participation
decisions that are adverse to physicians, and
(C) providing a process within the
organization for appealing such adverse
decisions, including the presentation of
information and views of the physician
regarding such decision.
(2) Consultation in medical policies.--A
Medicare+Choice organization shall consult with
physicians who have entered into participation
agreements with the organization regarding the
organization's medical policy, quality, and medical
management procedures.
(3) Prohibiting interference with provider advice to
enrollees.--
(A) In general.--Subject to subparagraphs (B)
and (C), a Medicare+Choice organization (in
relation to an individual enrolled under a
Medicare+Choice plan offered by the
organization under this part) shall not
prohibit or otherwise restrict a covered health
care professional (as defined in subparagraph
(D)) from advising such an individual who is a
patient of the professional about the health
status of the individual or medical care or
treatment for the individual's condition or
disease, regardless of whether benefits for
such care or treatment are provided under the
plan, if the professional is acting within the
lawful scope of practice.
(B) Conscience protection.--Subparagraph (A)
shall not be construed as requiring a
Medicare+Choice plan to provide, reimburse for,
or provide coverage of a counseling or referral
service if the Medicare+Choice organization
offering the plan--
(i) objects to the provision of such
service on moral or religious grounds;
and
(ii) in the manner and through the
written instrumentalities such
Medicare+Choice organization deems
appropriate, makes available
information on its policies regarding
such service to prospective enrollees
before or during enrollment and to
enrollees within 90 days after the date
that the organization or plan adopts a
change in policy regarding such a
counseling or referral service.
(C) Construction.--Nothing in subparagraph
(B) shall be construed to affect disclosure
requirements under State law or under the
Employee Retirement Income Security Act of
1974.
(D) Health care professional defined.--For
purposes of this paragraph, the term ``health
care professional'' means a physician (as
defined in section 1861(r)) or other health
care professional if coverage for the
professional's services is provided under the
Medicare+Choice plan for the services of the
professional. Such term includes a podiatrist,
optometrist, chiropractor, psychologist,
dentist, physician assistant, physical or
occupational therapist and therapy assistant,
speech-language pathologist, audiologist,
registered or licensed practical nurse
(including nurse practitioner, clinical nurse
specialist, certified registered nurse
anesthetist, and certified nurse-midwife),
licensed certified social worker, registered
respiratory therapist, and certified
respiratory therapy technician.
(4) Limitations on physician incentive plans.--
(A) In general.--No Medicare+Choice
organization may operate any physician
incentive plan (as defined in subparagraph (B))
unless the organization provides assurances
satisfactory to the Secretary that the
following requirements are met:
(i) No specific payment is made
directly or indirectly under the plan
to a physician or physician group as an
inducement to reduce or limit medically
necessary services provided with
respect to a specific individual
enrolled with the organization.
(ii) If the plan places a physician
or physician group at substantial
financial risk (as determined by the
Secretary) for services not provided by
the physician or physician group, the
organization provides stop-loss
protection for the physician or group
that is adequate and appropriate, based
on standards developed by the Secretary
that take into account the number of
physicians placed at such substantial
financial risk in the group or under
the plan and the number of individuals
enrolled with the organization who
receive services from the physician or
group.
(B) Physician incentive plan defined.--In
this paragraph, the term ``physician incentive
plan'' means any compensation arrangement
between a Medicare+Choice organization and a
physician or physician group that may directly
or indirectly have the effect of reducing or
limiting services provided with respect to
individuals enrolled with the organization
under this part.
(5) Limitation on provider indemnification.--A
Medicare+Choice organization may not provide (directly
or indirectly) for a health care professional, provider
of services, or other entity providing health care
services (or group of such professionals, providers, or
entities) to indemnify the organization against any
liability resulting from a civil action brought for any
damage caused to an enrollee with a Medicare+Choice
plan of the organization under this part by the
organization's denial of medically necessary care.
(6) Special rules for medicare+choice private fee-
for-service plans.--For purposes of applying this part
(including subsection (k)(1)) and section
1866(a)(1)(O), a hospital (or other provider of
services), a physician or other health care
professional, or other entity furnishing health care
services is treated as having an agreement or contract
in effect with a Medicare+Choice organization (with
respect to an individual enrolled in a Medicare+Choice
private fee-for-service plan it offers), if--
(A) the provider, professional, or other
entity furnishes services that are covered
under the plan to such an enrollee; and
(B) before providing such services, the
provider, professional, or other entity --
(i) has been informed of the
individual's enrollment under the plan,
and
(ii) either--
(I) has been informed of the
terms and conditions of payment
for such services under the
plan, or
(II) is given a reasonable
opportunity to obtain
information concerning such
terms and conditions,
in a manner reasonably designed to
effect informed agreement by a
provider.
The previous sentence shall only apply in the absence
of an explicit agreement between such a provider,
professional, or other entity and the Medicare+Choice
organization.
(7) Promotion of E-Prescribing by MA Plans.--
(A) In general.--An MA-PD plan may provide
for a separate payment or otherwise provide for
a differential payment for a participating
physician that prescribes covered part D drugs
in accordance with an electronic prescription
drug program that meets standards established
under section 1860D-4(e).
(B) Considerations.--Such payment may take
into consideration the costs of the physician
in implementing such a program and may also be
increased for those participating physicians
who significantly increase--
(i) formulary compliance;
(ii) lower cost, therapeutically
equivalent alternatives;
(iii) reductions in adverse drug
interactions; and
(iv) efficiencies in filing
prescriptions through reduced
administrative costs.
(C) Structure.--Additional or increased
payments under this subsection may be
structured in the same manner as medication
therapy management fees are structured under
section 1860D-4(c)(2)(E).
(k) Treatment of Services Furnished by Certain Providers.--
(1) In general.--Except as provided in paragraph (2),
a physician or other entity (other than a provider of
services) that does not have a contract establishing
payment amounts for services furnished to an individual
enrolled under this part with a Medicare+Choice
organization described in section 1851(a)(2)(A) or with
an organization offering an MSA plan shall accept as
payment in full for covered services under this title
that are furnished to such an individual the amounts
that the physician or other entity could collect if the
individual were not so enrolled. Any penalty or other
provision of law that applies to such a payment with
respect to an individual entitled to benefits under
this title (but not enrolled with a Medicare+Choice
organization under this part) also applies with respect
to an individual so enrolled.
(2) Application to medicare+choice private fee-for-
service plans.--
(A) Balance billing limits under
medicare+choice private fee-for-service plans
in case of contract providers.--
(i) In general.--In the case of an
individual enrolled in a
Medicare+Choice private fee-for-service
plan under this part, a physician,
provider of services, or other entity
that has a contract (including through
the operation of subsection (j)(6))
establishing a payment rate for
services furnished to the enrollee
shall accept as payment in full for
covered services under this title that
are furnished to such an individual an
amount not to exceed (including any
deductibles, coinsurance, copayments,
or balance billing otherwise permitted
under the plan) an amount equal to 115
percent of such payment rate.
(ii) Procedures to enforce limits.--
The Medicare+Choice organization that
offers such a plan shall establish
procedures, similar to the procedures
described in section 1848(g)(1)(A), in
order to carry out the previous
sentence.
(iii) Assuring enforcement.--If the
Medicare+Choice organization fails to
establish and enforce procedures
required under clause (ii), the
organization is subject to intermediate
sanctions under section 1857(g).
(B) Enrollee liability for noncontract
providers.--For provision--
(i) establishing minimum payment rate
in the case of noncontract providers
under a Medicare+Choice private fee-
for-service plan, see section
1852(a)(2); or
(ii) limiting enrollee liability in
the case of covered services furnished
by such providers, see paragraph (1)
and section 1866(a)(1)(O).
(C) Information on beneficiary liability.--
(i) In general.--Each Medicare+Choice
organization that offers a
Medicare+Choice private fee-for-service
plan shall provide that enrollees under
the plan who are furnished services for
which payment is sought under the plan
are provided an appropriate explanation
of benefits (consistent with that
provided under parts A and B and, if
applicable, under medicare supplemental
policies) that includes a clear
statement of the amount of the
enrollee's liability (including any
liability for balance billing
consistent with this subsection) with
respect to payments for such services.
(ii) Advance notice before receipt of
inpatient hospital services and certain
other services.--In addition, such
organization shall, in its terms and
conditions of payments to hospitals for
inpatient hospital services and for
other services identified by the
Secretary for which the amount of the
balance billing under subparagraph (A)
could be substantial, require the
hospital to provide to the enrollee,
before furnishing such services and if
the hospital imposes balance billing
under subparagraph (A)--
(I) notice of the fact that
balance billing is permitted
under such subparagraph for
such services, and
(II) a good faith estimate of
the likely amount of such
balance billing (if any), with
respect to such services, based
upon the presenting condition
of the enrollee.
(l) Return to Home Skilled Nursing Facilities for Covered
Post-Hospital Extended Care Services.--
(1) Ensuring return to home snf.--
(A) In general.--In providing coverage of
post-hospital extended care services, a
Medicare+Choice plan shall provide for such
coverage through a home skilled nursing
facility if the following conditions are met:
(i) Enrollee election.--The enrollee
elects to receive such coverage through
such facility.
(ii) SNF agreement.--The facility has
a contract with the Medicare+Choice
organization for the provision of such
services, or the facility agrees to
accept substantially similar payment
under the same terms and conditions
that apply to similarly situated
skilled nursing facilities that are
under contract with the Medicare+Choice
organization for the provision of such
services and through which the enrollee
would otherwise receive such services.
(B) Manner of payment to home snf.--The
organization shall provide payment to the home
skilled nursing facility consistent with the
contract or the agreement described in
subparagraph (A)(ii), as the case may be.
(2) No less favorable coverage.--The coverage
provided under paragraph (1) (including scope of
services, cost-sharing, and other criteria of coverage)
shall be no less favorable to the enrollee than the
coverage that would be provided to the enrollee with
respect to a skilled nursing facility the post-hospital
extended care services of which are otherwise covered
under the Medicare+Choice plan.
(3) Rule of construction.--Nothing in this subsection
shall be construed to do the following:
(A) To require coverage through a skilled
nursing facility that is not otherwise
qualified to provide benefits under part A for
medicare beneficiaries not enrolled in a
Medicare+Choice plan.
(B) To prevent a skilled nursing facility
from refusing to accept, or imposing conditions
upon the acceptance of, an enrollee for the
receipt of post-hospital extended care
services.
(4) Definitions.--In this subsection:
(A) Home skilled nursing facility.--The term
``home skilled nursing facility'' means, with
respect to an enrollee who is entitled to
receive post-hospital extended care services
under a Medicare+Choice plan, any of the
following skilled nursing facilities:
(i) SNF residence at time of
admission.--The skilled nursing
facility in which the enrollee resided
at the time of admission to the
hospital preceding the receipt of such
post-hospital extended care services.
(ii) SNF in continuing care
retirement community.--A skilled
nursing facility that is providing such
services through a continuing care
retirement community (as defined in
subparagraph (B)) which provided
residence to the enrollee at the time
of such admission.
(iii) SNF residence of spouse at time
of discharge.--The skilled nursing
facility in which the spouse of the
enrollee is residing at the time of
discharge from such hospital.
(B) Continuing care retirement community.--
The term ``continuing care retirement
community'' means, with respect to an enrollee
in a Medicare+Choice plan, an arrangement under
which housing and health-related services are
provided (or arranged) through an organization
for the enrollee under an agreement that is
effective for the life of the enrollee or for a
specified period.
(m) Provision of Additional Telehealth Services.--
(1) MA plan option.--For purposes of subsection
(a)(1)(B)(i), an election described in this paragraph,
with respect to an MA plan and plan year, is an
election by the sponsor of such plan to provide under
the plan for such plan year, in accordance with the
subsequent provisions of this subsection, additional
telehealth services (as defined in paragraph (2)) as a
benefit under the original medicare fee-for-service
program option. Such additional telehealth services,
with respect to a plan year, shall be in addition to
benefits included under the original medicare fee-for-
service program option for such year.
(2) Additional telehealth services defined.--
(A) In general.--For purposes of this
subsection and section 1854, the term
``additional telehealth services'' means,
subject to subparagraph (C), services, with
respect to a year--
(i) for which payment may be made
under part B (without regard to
application of section 1834(m));
(ii) that, if furnished via a
telecommunications system, would not be
payable under section 1834(m);
(iii) furnished using electronic
information and telecommunications
technology;
(iv) furnished in accordance with
such requirements as the Secretary
specifies pursuant to paragraph (3);
and
(v) which are identified for such
year by the Secretary as appropriate to
furnish using electronic information
and telecommunications technology where
a physician (as defined in section
1861(r)) or practitioner (described in
section 1842(b)(18)(C)) furnishing the
service is not at the same location as
the plan enrollee.
(B) Flexibility for phasing in
identifications.--In making identifications
under subparagraph (A)(v), the Secretary shall
make such identifications annually and may make
such identifications in a manner that results
in additional telehealth services being phased
in, as determined appropriate by the Secretary.
(C) Exclusion of capital and infrastructure
costs and investments.--For purposes of this
subsection and section 1854, the term
``additional telehealth services'' does not
include capital and infrastructure costs and
investments relating to such benefits provided
pursuant to this subsection.
(3) Requirements for additional telehealth
services.--The Secretary shall specify requirements for
the provision of additional telehealth services with
respect to--
(A) qualifications (other than licensure) of
physicians and practitioners who furnish such
services;
(B) the technology used in furnishing such
services;
(C) factors necessary for coordination of
additional telehealth services with other
services; and
(D) such other criteria (such as clinical
criteria) as determined by the Secretary.
(4) Enrollee choice.--An MA plan that provides a
service as an additional telehealth service may not,
when furnished without use of electronic information
and telecommunications technology, deny access to the
equivalent in-person service.
(5) Construction.--
(A) In general.--In determining if an MA
organization or MA plan, as applicable, is in
compliance with each requirement specified in
subparagraph (B), such determination shall be
made without regard to any additional
telehealth services covered by the plan offered
by such organization or plan pursuant to this
subsection.
(B) Requirements specified.--The requirements
specified in this subparagraph are the
following:
(i) The requirements under subsection
(d).
(ii) The requirement under subsection
(a)(1) with respect to covering
benefits under the original medicare
fee-for-service program option, as
defined in the first sentence of
paragraph (B)(i) of such subsection.
* * * * * * *
premiums and bid amounts
Sec. 1854. (a) Submission of Proposed Premiums, Bid Amounts,
and Related Information.--
(1) In general.--
(A) Initial submission.--Not later than the
second Monday in September of 2002, 2003, and
2004 (or the first Monday in June of each
subsequent year), each MA organization shall
submit to the Secretary, in a form and manner
specified by the Secretary and for each MA plan
for the service area (or segment of such an
area if permitted under subsection (h)) in
which it intends to be offered in the following
year the following:
(i) The information described in
paragraph (2), (3), (4), or (6)(A) for
the type of plan and year involved.
(ii) The plan type for each plan.
(iii) The enrollment capacity (if
any) in relation to the plan and area.
(B) Beneficiary rebate information.--In the
case of a plan required to provide a monthly
rebate under subsection (b)(1)(C) for a year,
the MA organization offering the plan shall
submit to the Secretary, in such form and
manner and at such time as the Secretary
specifies, information on--
(i) the manner in which such rebate
will be provided under clause (ii) of
such subsection; and
(ii) the MA monthly prescription drug
beneficiary premium (if any) and the MA
monthly supplemental beneficiary
premium (if any).
(C) Paperwork reduction for offering of ma
regional plans nationally or in multi-region
areas.--The Secretary shall establish
requirements for information submission under
this subsection in a manner that promotes the
offering of MA regional plans in more than one
region (including all regions) through the
filing of consolidated information.
(2) Information required for coordinated care plans
before 2006.--For a Medicare+Choice plan described in
section 1851(a)(2)(A), the information described in
this paragraph is as follows:
(A) Basic (and additional) benefits.--For
benefits described in section 1852(a)(1)(A) for
a year before 2006--
(i) the adjusted community rate (as
defined in subsection (f)(3));
(ii) the Medicare+Choice monthly
basic beneficiary premium (as defined
in subsection (b)(2)(A));
(iii) a description of deductibles,
coinsurance, and copayments applicable
under the plan and the actuarial value
of such deductibles, coinsurance, and
copayments, described in subsection
(e)(1)(A); and
(iv) if required under subsection
(f)(1), a description of the additional
benefits to be provided pursuant to
such subsection and the value
determined for such proposed benefits
under such subsection.
(B) Supplemental benefits.--For benefits
described in section 1852(a)(3)--
(i) the adjusted community rate (as
defined in subsection (f)(3));
(ii) the Medicare+Choice monthly
supplemental beneficiary premium (as
defined in subsection (b)(2)(B)); and
(iii) a description of deductibles,
coinsurance, and copayments applicable
under the plan and the actuarial value
of such deductibles, coinsurance, and
copayments, described in subsection
(e)(2).
(3) Requirements for msa plans.--For an MSA plan
described, the information for any year in this
paragraph is as follows:
(A) Basic (and additional) benefits.--For
benefits described in section 1852(a)(1)(A),
the amount of the Medicare+Choice monthly MSA
premium.
(B) Supplemental benefits.--For benefits
described in section 1852(a)(3), the amount of
the Medicare+Choice monthly supplementary
beneficiary premium.
(4) Requirements for private fee-for-service plans
before 2006.--For a Medicare+Choice plan described in
section 1851(a)(2)(C) for benefits described in section
1852(a)(1)(A) for a year before 2006, the information
described in this paragraph is as follows:
(A) Basic (and additional) benefits.--For
benefits described in section 1852(a)(1)(A)--
(i) the adjusted community rate (as
defined in subsection (f)(3));
(ii) the amount of the
Medicare+Choice monthly basic
beneficiary premium;
(iii) a description of the
deductibles, coinsurance, and
copayments applicable under the plan,
and the actuarial value of such
deductibles, coinsurance, and
copayments, as described in subsection
(e)(4)(A); and
(iv) if required under subsection
(f)(1), a description of the additional
benefits to be provided pursuant to
such subsection and the value
determined for such proposed benefits
under such subsection.
(B) Supplemental benefits.--For benefits
described in section 1852(a)(3), the amount of
the Medicare+Choice monthly supplemental
beneficiary premium (as defined in subsection
(b)(2)(B)).
(5) Review.--
(A) In general.--Subject to subparagraph (B),
the Secretary shall review the adjusted
community rates, the amounts of the basic and
supplemental premiums, and values filed under
paragraphs (2) and (4) of this subsection and
shall approve or disapprove such rates,
amounts, and values so submitted. The Chief
Actuary of the Centers for Medicare & Medicaid
Services shall review the actuarial assumptions
and data used by the Medicare+Choice
organization with respect to such rates,
amounts, and values so submitted to determine
the appropriateness of such assumptions and
data.
(B) Exception.--The Secretary shall not
review, approve, or disapprove the amounts
submitted under paragraph (3) or, in the case
of an MA private fee-for-service plan,
subparagraphs (A)(ii) and (B) of paragraph (4).
(C) Rejection of bids.--
(i) In general.--Nothing in this
section shall be construed as requiring
the Secretary to accept any or every
bid submitted by an MA organization
under this subsection.
(ii) Authority to deny bids that
propose significant increases in cost
sharing or decreases in benefits.--The
Secretary may deny a bid submitted by
an MA organization for an MA plan if it
proposes significant increases in cost
sharing or decreases in benefits
offered under the plan.
(6) Submission of bid amounts by ma organizations
beginning in 2006.--
(A) Information to be submitted.--For an MA
plan (other than an MSA plan) for a plan year
beginning on or after January 1, 2006, the
information described in this subparagraph is
as follows:
(i) The monthly aggregate bid amount
for the provision of all items and
services under the plan, which amount
shall be based on average revenue
requirements (as used for purposes of
section 1302(8) of the Public Health
Service Act) in the payment area for an
enrollee with a national average risk
profile for the factors described in
section 1853(a)(1)(C) (as specified by
the Secretary).
(ii) The proportions of such bid
amount that are attributable to--
(I) the provision of benefits
under the original medicare
fee-for-service program option
(as defined in section
1852(a)(1)(B)), including, for
plan year 2020 and subsequent
plan years, the provision of
such benefits through the use
of additional telehealth
services under section 1852(m);
(II) the provision of basic
prescription drug coverage; and
(III) the provision of
supplemental health care
benefits.
(iii) The actuarial basis for
determining the amount under clause (i)
and the proportions described in clause
(ii) and such additional information as
the Secretary may require to verify
such actuarial bases and the projected
number of enrollees in each MA local
area.
(iv) A description of deductibles,
coinsurance, and copayments applicable
under the plan and the actuarial value
of such deductibles, coinsurance, and
copayments, described in subsection
(e)(4)(A).
(v) With respect to qualified
prescription drug coverage, the
information required under section
1860D-4, as incorporated under section
1860D-11(b)(2), with respect to such
coverage.
In the case of a specialized MA plan for
special needs individuals, the information
described in this subparagraph is such
information as the Secretary shall specify.
(B) Acceptance and negotiation of bid
amounts.--
(i) Authority.--Subject to clauses
(iii) and (iv), the Secretary has the
authority to negotiate regarding
monthly bid amounts submitted under
subparagraph (A) (and the proportions
described in subparagraph (A)(ii)),
including supplemental benefits
provided under subsection
(b)(1)(C)(ii)(I) and in exercising such
authority the Secretary shall have
authority similar to the authority of
the Director of the Office of Personnel
Management with respect to health
benefits plans under chapter 89 of
title 5, United States Code.
(ii) Application of fehbp standard.--
Subject to clause (iv), the Secretary
may only accept such a bid amount or
proportion if the Secretary determines
that such amount and proportions are
supported by the actuarial bases
provided under subparagraph (A) and
reasonably and equitably reflects the
revenue requirements (as used for
purposes of section 1302(8) of the
Public Health Service Act) of benefits
provided under that plan.
(iii) Noninterference.--In order to
promote competition under this part and
part D and in carrying out such parts,
the Secretary may not require any MA
organization to contract with a
particular hospital, physician, or
other entity or individual to furnish
items and services under this title or
require a particular price structure
for payment under such a contract to
the extent consistent with the
Secretary's authority under this part.
(iv) Exception.--In the case of a
plan described in section
1851(a)(2)(C), the provisions of
clauses (i) and (ii) shall not apply
and the provisions of paragraph (5)(B),
prohibiting the review, approval, or
disapproval of amounts described in
such paragraph, shall apply to the
negotiation and rejection of the
monthly bid amounts and the proportions
referred to in subparagraph (A).
(b) Monthly Premium Charged.--
(1) In general.--
(A) Rule for other than msa plans.--Subject
to the rebate under subparagraph (C), the
monthly amount (if any) of the premium charged
to an individual enrolled in a Medicare+Choice
plan (other than an MSA plan) offered by a
Medicare+Choice organization shall be equal to
the sum of the Medicare+Choice monthly basic
beneficiary premium, the Medicare+Choice
monthly supplementary beneficiary premium (if
any), and, if the plan provides qualified
prescription drug coverage, the MA monthly
prescription drug beneficiary premium.
(B) MSA plans.--The monthly amount of the
premium charged to an individual enrolled in an
MSA plan offered by a Medicare+Choice
organization shall be equal to the
Medicare+Choice monthly supplemental
beneficiary premium (if any).
(C) Beneficiary rebate rule.--
(i) Requirement.--The MA plan shall
provide to the enrollee a monthly
rebate equal to 75 percent (or the
applicable rebate percentage specified
in clause (iii) in the case of plan
years beginning on or after January 1,
2012) of the average per capita savings
(if any) described in paragraph (3)(C)
or (4)(C), as applicable to the plan
and year involved.
(ii) Form of rebate for plan years
before 2012.--For plan years before
2012, a rebate required under this
subparagraph shall be provided through
the application of the amount of the
rebate toward one or more of the
following:
(I) Provision of supplemental
health care benefits and
payment for premium for
supplemental benefits.--The
provision of supplemental
health care benefits described
in section 1852(a)(3) in a
manner specified under the
plan, which may include the
reduction of cost-sharing
otherwise applicable as well as
additional health care benefits
which are not benefits under
the original medicare fee-for-
service program option, or
crediting toward an MA monthly
supplemental beneficiary
premium (if any).
(II) Payment for premium for
prescription drug coverage.--
Crediting toward the MA monthly
prescription drug beneficiary
premium.
(III) Payment toward part b
premium.--Crediting toward the
premium imposed under part B
(determined without regard to
the application of subsections
(b), (h), and (i) of section
1839).
(iii) Applicable rebate percentage.--
The applicable rebate percentage
specified in this clause for a plan for
a year, based on the system under
section 1853(o)(4)(A), is the sum of--
(I) the product of the old
phase-in proportion for the
year under clause (iv) and 75
percent; and
(II) the product of the new
phase-in proportion for the
year under clause (iv) and the
final applicable rebate
percentage under clause (v).
(iv) Old and new phase-in
proportions.--For purposes of clause
(iv)--
(I) for 2012, the old phase-
in proportion is \2/3\ and the
new phase-in proportion is \1/
3\;
(II) for 2013, the old phase-
in proportion is \1/3\ and the
new phase-in proportion is \2/
3\; and
(III) for 2014 and any
subsequent year, the old phase-
in proportion is 0 and the new
phase-in proportion is 1.
(v) Final applicable rebate
percentage.--Subject to clause (vi),
the final applicable rebate percentage
under this clause is--
(I) in the case of a plan
with a quality rating under
such system of at least 4.5
stars, 70 percent;
(II) in the case of a plan
with a quality rating under
such system of at least 3.5
stars and less than 4.5 stars,
65 percent; and
(III) in the case of a plan
with a quality rating under
such system of less than 3.5
stars, 50 percent.
(vi) Treatment of low enrollment and
new plans.--For purposes of clause
(v)--
(I) for 2012, in the case of
a plan described in subclause
(I) of subsection
(o)(3)(A)(ii), the plan shall
be treated as having a rating
of 4.5 stars; and
(II) for 2012 or a subsequent
year, in the case of a new MA
plan (as defined under
subclause (III) of subsection
(o)(3)(A)(iii)) that is treated
as a qualifying plan pursuant
to subclause (I) of such
subsection, the plan shall be
treated as having a rating of
3.5 stars.
(vii) Disclosure relating to
rebates.--The plan shall disclose to
the Secretary information on the form
and amount of the rebate provided under
this subparagraph or the actuarial
value in the case of supplemental
health care benefits.
(viii) Application of part b premium
reduction.--Insofar as an MA
organization elects to provide a rebate
under this subparagraph under a plan as
a credit toward the part B premium
under clause (ii)(III), the Secretary
shall apply such credit to reduce the
premium under section 1839 of each
enrollee in such plan as provided in
section 1840(i).
(2) Premium and bid terminology defined.--For
purposes of this part:
(A) MA monthly basic beneficiary premium.--
The term ``MA monthly basic beneficiary
premium'' means, with respect to an MA plan--
(i) described in section
1853(a)(1)(B)(i) (relating to plans
providing rebates), zero; or
(ii) described in section
1853(a)(1)(B)(ii), the amount (if any)
by which the unadjusted MA statutory
non-drug monthly bid amount (as defined
in subparagraph (E)) exceeds the
applicable unadjusted MA area-specific
non-drug monthly benchmark amount (as
defined in section 1853(j)).
(B) MA monthly prescription drug beneficiary
premium.--The term ``MA monthly prescription
drug beneficiary premium'' means, with respect
to an MA plan, the base beneficiary premium (as
determined under section 1860D-13(a)(2) and as
adjusted under section 1860D-13(a)(1)(B)), less
the amount of rebate credited toward such
amount under section 1854(b)(1)(C)(ii)(II).
(C) MA monthly supplemental beneficiary
premium.--
(i) In general.--The term ``MA
monthly supplemental beneficiary
premium'' means, with respect to an MA
plan, the portion of the aggregate
monthly bid amount submitted under
clause (i) of subsection (a)(6)(A) for
the year that is attributable under
clause (ii)(III) of such subsection to
the provision of supplemental health
care benefits, less the amount of
rebate credited toward such portion
under section 1854(b)(1)(C)(ii)(I).
(ii) Application of ma monthly
supplementary beneficiary premium.--For
plan years beginning on or after
January 1, 2012, any MA monthly
supplementary beneficiary premium
charged to an individual enrolled in an
MA plan shall be used for the purposes,
and in the priority order, described in
subclauses (I) through (III) of
paragraph (1)(C)(iii).
(D) Medicare+Choice monthly MSA premium.--The
term ``Medicare+Choice monthly MSA premium''
means, with respect to a Medicare+Choice plan,
the amount of such premium filed under
subsection (a)(3)(A) for the plan.
(E) Unadjusted ma statutory non-drug monthly
bid amount.--The term ``unadjusted MA statutory
non-drug monthly bid amount'' means the portion
of the bid amount submitted under clause (i) of
subsection (a)(6)(A) for the year that is
attributable under clause (ii)(I) of such
subsection to the provision of benefits under
the original medicare fee-for-service program
option (as defined in section 1852(a)(1)(B)).
(3) Computation of average per capita monthly savings
for local plans.--For purposes of paragraph (1)(C)(i),
the average per capita monthly savings referred to in
such paragraph for an MA local plan and year is
computed as follows:
(A) Determination of statewide average risk
adjustment for local plans.--
(i) In general.--Subject to clause
(iii), the Secretary shall determine,
at the same time rates are promulgated
under section 1853(b)(1) (beginning
with 2006) for each State, the average
of the risk adjustment factors to be
applied under section 1853(a)(1)(C) to
payment for enrollees in that State for
MA local plans.
(ii) Treatment of states for first
year in which local plan offered.--In
the case of a State in which no MA
local plan was offered in the previous
year, the Secretary shall estimate such
average. In making such estimate, the
Secretary may use average risk
adjustment factors applied to
comparable States or applied on a
national basis.
(iii) Authority to determine risk
adjustment for areas other than
states.--The Secretary may provide for
the determination and application of
risk adjustment factors under this
subparagraph on the basis of areas
other than States or on a plan-specific
basis.
(B) Determination of risk adjusted benchmark
and risk-adjusted bid for local plans.--For
each MA plan offered in a local area in a
State, the Secretary shall--
(i) adjust the applicable MA area-
specific non-drug monthly benchmark
amount (as defined in section
1853(j)(1)) for the area by the average
risk adjustment factor computed under
subparagraph (A); and
(ii) adjust the unadjusted MA
statutory non-drug monthly bid amount
by such applicable average risk
adjustment factor.
(C) Determination of average per capita
monthly savings.--The average per capita
monthly savings described in this subparagraph
for an MA local plan is equal to the amount (if
any) by which--
(i) the risk-adjusted benchmark
amount computed under subparagraph
(B)(i); exceeds
(ii) the risk-adjusted bid computed
under subparagraph (B)(ii).
(4) Computation of average per capita monthly savings
for regional plans.--For purposes of paragraph
(1)(C)(i), the average per capita monthly savings
referred to in such paragraph for an MA regional plan
and year is computed as follows:
(A) Determination of regionwide average risk
adjustment for regional plans.--
(i) In general.--The Secretary shall
determine, at the same time rates are
promulgated under section 1853(b)(1)
(beginning with 2006) for each MA
region the average of the risk
adjustment factors to be applied under
section 1853(a)(1)(C) to payment for
enrollees in that region for MA
regional plans.
(ii) Treatment of regions for first
year in which regional plan offered.--
In the case of an MA region in which no
MA regional plan was offered in the
previous year, the Secretary shall
estimate such average. In making such
estimate, the Secretary may use average
risk adjustment factors applied to
comparable regions or applied on a
national basis.
(iii) Authority to determine risk
adjustment for areas other than
regions.--The Secretary may provide for
the determination and application of
risk adjustment factors under this
subparagraph on the basis of areas
other than MA regions or on a plan-
specific basis.
(B) Determination of risk-adjusted benchmark
and risk-adjusted bid for regional plans.--For
each MA regional plan offered in a region, the
Secretary shall--
(i) adjust the applicable MA area-
specific non-drug monthly benchmark
amount (as defined in section
1853(j)(2)) for the region by the
average risk adjustment factor computed
under subparagraph (A); and
(ii) adjust the unadjusted MA
statutory non-drug monthly bid amount
by such applicable average risk
adjustment factor.
(C) Determination of average per capita
monthly savings.--The average per capita
monthly savings described in this subparagraph
for an MA regional plan is equal to the amount
(if any) by which--
(i) the risk-adjusted benchmark
amount computed under subparagraph
(B)(i); exceeds
(ii) the risk-adjusted bid computed
under subparagraph (B)(ii).
(c) Uniform Premium and Bid Amounts.--Except as permitted
under section 1857(i), the MA monthly bid amount submitted
under subsection (a)(6), the amounts of the MA monthly basic,
prescription drug, and supplemental beneficiary premiums, and
the MA monthly MSA premium charged under subsection (b) of an
MA organization under this part may not vary among individuals
enrolled in the plan.
(d) Terms and Conditions of Imposing Premiums.--
(1) In general.--Each Medicare+Choice organization
shall permit the payment of Medicare+Choice monthly
basic, prescription drug, and supplemental beneficiary
premiums on a monthly basis, may terminate election of
individuals for a Medicare+Choice plan for failure to
make premium payments only in accordance with section
1851(g)(3)(B)(i), and may not provide for cash or other
monetary rebates as an inducement for enrollment or
otherwise.
(2) Beneficiary's option of payment through
withholding from social security payment or use of
electronic funds transfer mechanism.--In accordance
with regulations, an MA organization shall permit each
enrollee, at the enrollee's option, to make payment of
premiums (if any) under this part to the organization
through--
(A) withholding from benefit payments in the
manner provided under section 1840 with respect
to monthly premiums under section 1839;
(B) an electronic funds transfer mechanism
(such as automatic charges of an account at a
financial institution or a credit or debit card
account); or
(C) such other means as the Secretary may
specify, including payment by an employer or
under employment-based retiree health coverage
(as defined in section 1860D-22(c)(1)) on
behalf of an employee or former employee (or
dependent).
All premium payments that are withheld under
subparagraph (A) shall be credited to the appropriate
Trust Fund (or Account thereof), as specified by the
Secretary, under this title and shall be paid to the MA
organization involved. No charge may be imposed under
an MA plan with respect to the election of the payment
option described in subparagraph (A). The Secretary
shall consult with the Commissioner of Social Security
and the Secretary of the Treasury regarding methods for
allocating premiums withheld under subparagraph (A)
among the appropriate Trust Funds and Account.
(3) Information necessary for collection.--In order
to carry out paragraph (2)(A) with respect to an
enrollee who has elected such paragraph to apply, the
Secretary shall transmit to the Commissioner of Social
Security--
(A) by the beginning of each year, the name,
social security account number, consolidated
monthly beneficiary premium described in
paragraph (4) owed by such enrollee for each
month during the year, and other information
determined appropriate by the Secretary, in
consultation with the Commissioner of Social
Security; and
(B) periodically throughout the year,
information to update the information
previously transmitted under this paragraph for
the year.
(4) Consolidated monthly beneficiary premium.--In the
case of an enrollee in an MA plan, the Secretary shall
provide a mechanism for the consolidation of--
(A) the MA monthly basic beneficiary premium
(if any);
(B) the MA monthly supplemental beneficiary
premium (if any); and
(C) the MA monthly prescription drug
beneficiary premium (if any).
(e) Limitation on Enrollee Liability.--
(1) For basic and additional benefits before 2006.--
For periods before 2006, in no event may--
(A) the Medicare+Choice monthly basic
beneficiary premium (multiplied by 12) and the
actuarial value of the deductibles,
coinsurance, and copayments applicable on
average to individuals enrolled under this part
with a Medicare+Choice plan described in
section 1851(a)(2)(A) of an organization with
respect to required benefits described in
section 1852(a)(1)(A) and additional benefits
(if any) required under subsection (f)(1)(A)
for a year, exceed
(B) the actuarial value of the deductibles,
coinsurance, and copayments that would be
applicable on average to individuals entitled
to benefits under part A and enrolled under
part B if they were not members of a
Medicare+Choice organization for the year.
(2) For supplemental benefits before 2006.--For
periods before 2006, if the Medicare+Choice
organization provides to its members enrolled under
this part in a Medicare+Choice plan described in
section 1851(a)(2)(A) with respect to supplemental
benefits described in section 1852(a)(3), the sum of
the Medicare+Choice monthly supplemental beneficiary
premium (multiplied by 12) charged and the actuarial
value of its deductibles, coinsurance, and copayments
charged with respect to such benefits may not exceed
the adjusted community rate for such benefits (as
defined in subsection (f)(3)).
(3) Determination on other basis.--If the Secretary
determines that adequate data are not available to
determine the actuarial value under paragraph (1)(A),
(2), or (4) the Secretary may determine such amount
with respect to all individuals in same geographic
area, the State, or in the United States, eligible to
enroll in the Medicare+Choice plan involved under this
part or on the basis of other appropriate data.
(4) Special rule for private fee-for-service plans
and for basic benefits beginning in 2006.--With respect
to a Medicare+Choice private fee-for-service plan
(other than a plan that is an MSA plan) and for periods
beginning with 2006, with respect to an MA plan
described in section 1851(a)(2)(A), in no event may--
(A) the actuarial value of the deductibles,
coinsurance, and copayments applicable on
average to individuals enrolled under this part
with such a plan of an organization with
respect to benefits under the original medicare
fee-for-service program option, exceed
(B) the actuarial value of the deductibles,
coinsurance, and copayments that would be
applicable with respect to such benefits on
average to individuals entitled to benefits
under part A and enrolled under part B if they
were not members of a Medicare+Choice
organization for the year.
(f) Requirement for Additional Benefits Before 2006.--
(1) Requirement.--
(A) In general.--For years before 2006, each
Medicare+Choice organization (in relation to a
Medicare+Choice plan, other than an MSA plan,
it offers) shall provide that if there is an
excess amount (as defined in subparagraph (B))
for the plan for a contract year, subject to
the succeeding provisions of this subsection,
the organization shall provide to individuals
such additional benefits (as the organization
may specify) in a value which the Secretary
determines is at least equal to the adjusted
excess amount (as defined in subparagraph (C)).
(B) Excess amount.--For purposes of this
paragraph, the ``excess amount'', for an
organization for a plan, is the amount (if any)
by which--
(i) the average of the capitation
payments made to the organization under
section 1853 for the plan at the
beginning of contract year, exceeds
(ii) the actuarial value of the
required benefits described in section
1852(a)(1)(A) under the plan for
individuals under this part, as
determined based upon an adjusted
community rate described in paragraph
(3) (as reduced for the actuarial value
of the coinsurance, copayments, and
deductibles under parts A and B).
(C) Adjusted excess amount.--For purposes of
this paragraph, the ``adjusted excess amount'',
for an organization for a plan, is the excess
amount reduced to reflect any amount withheld
and reserved for the organization for the year
under paragraph (2).
(D) Uniform application.--This paragraph
shall be applied uniformly for all enrollees
for a plan.
(E) Premium reductions.--
(i) In general.--Subject to clause
(ii), as part of providing any
additional benefits required under
subparagraph (A), a Medicare+Choice
organization may elect a reduction in
its payments under section
1853(a)(1)(A) with respect to a
Medicare+Choice plan and the Secretary
shall apply such reduction to reduce
the premium under section 1839 of each
enrollee in such plan as provided in
section 1840(i).
(ii) Amount of reduction.--The amount
of the reduction under clause (i) with
respect to any enrollee in a
Medicare+Choice plan--
(I) may not exceed 125
percent of the premium
described under section
1839(a)(3); and
(II) shall apply uniformly to
each enrollee of the
Medicare+Choice plan to which
such reduction applies.
(F) Construction.--Nothing in this subsection
shall be construed as preventing a
Medicare+Choice organization from providing
supplemental benefits (described in section
1852(a)(3)) that are in addition to the health
care benefits otherwise required to be provided
under this paragraph and from imposing a
premium for such supplemental benefits.
(2) Stabilization fund.--A Medicare+Choice
organization may provide that a part of the value of an
excess amount described in paragraph (1) be withheld
and reserved in the Federal Hospital Insurance Trust
Fund and in the Federal Supplementary Medical Insurance
Trust Fund (in such proportions as the Secretary
determines to be appropriate) by the Secretary for
subsequent annual contract periods, to the extent
required to stabilize and prevent undue fluctuations in
the additional benefits offered in those subsequent
periods by the organization in accordance with such
paragraph. Any of such value of the amount reserved
which is not provided as additional benefits described
in paragraph (1)(A) to individuals electing the
Medicare+Choice plan of the organization in accordance
with such paragraph prior to the end of such periods,
shall revert for the use of such trust funds.
(3) Adjusted community rate.--For purposes of this
subsection, subject to paragraph (4), the term
``adjusted community rate'' for a service or services
means, at the election of a Medicare+Choice
organization, either--
(A) the rate of payment for that service or
services which the Secretary annually
determines would apply to an individual
electing a Medicare+Choice plan under this part
if the rate of payment were determined under a
``community rating system'' (as defined in
section 1302(8) of the Public Health Service
Act, other than subparagraph (C)), or
(B) such portion of the weighted aggregate
premium, which the Secretary annually estimates
would apply to such an individual, as the
Secretary annually estimates is attributable to
that service or services,
but adjusted for differences between the utilization
characteristics of the individuals electing coverage
under this part and the utilization characteristics of
the other enrollees with the plan (or, if the Secretary
finds that adequate data are not available to adjust
for those differences, the differences between the
utilization characteristics of individuals selecting
other Medicare+Choice coverage, or Medicare+Choice
eligible individuals in the area, in the State, or in
the United States, eligible to elect Medicare+Choice
coverage under this part and the utilization
characteristics of the rest of the population in the
area, in the State, or in the United States,
respectively).
(4) Determination based on insufficient data.--For
purposes of this subsection, if the Secretary finds
that there is insufficient enrollment experience to
determine an average of the capitation payments to be
made under this part at the beginning of a contract
period or to determine (in the case of a newly operated
provider-sponsored organization or other new
organization) the adjusted community rate for the
organization, the Secretary may determine such an
average based on the enrollment experience of other
contracts entered into under this part and may
determine such a rate using data in the general
commercial marketplace.
(g) Prohibition of State Imposition of Premium Taxes.--No
State may impose a premium tax or similar tax with respect to
payments to Medicare+Choice organizations under section 1853 or
premiums paid to such organizations under this part.
(h) Permitting Use of Segments of Service Areas.--The
Secretary shall permit a Medicare+Choice organization to elect
to apply the provisions of this section uniformly to separate
segments of a service area (rather than uniformly to an entire
service area) as long as such segments are composed of one or
more Medicare+Choice payment areas.
* * * * * * *
Part E--Miscellaneous Provisions
* * * * * * *
medicare improvement fund
Sec. 1898.
(a) Establishment.--The Secretary shall establish under this
title a Medicare Improvement Fund (in this section referred to
as the `Fund') which shall be available to the Secretary to
make improvements under the original Medicare fee-for-service
program under parts A and B for individuals entitled to, or
enrolled for, benefits under part or enrolled under part B
including adjustments to payments for items and services
furnished by providers of services and suppliers under such
original Medicare fee-for-service program.
(b) Funding.--
(1) In general.--There shall be available to the
Fund, for expenditures from the Fund for services
furnished [during and after fiscal year 2021,
$270,000,000] during and after fiscal year 2021,
$325,000,000.
(2) Payment from trust funds.--The amount specified
under paragraph (1) shall be available to the Fund, as
expenditures are made from the Fund, from the Federal
Hospital Insurance Trust Fund and the Federal
Supplementary Medical Insurance Trust Fund in such
proportion as the Secretary determines appropriate.
(3) Funding limitation.--Amounts in the Fund shall be
available in advance of appropriations but only if the
total amount obligated from the Fund does not exceed
the amount available to the Fund under paragraph (1).
The Secretary may obligate funds from the Fund only if
the Secretary determines (and the Chief Actuary of the
Centers for Medicare & Medicaid Services and the
appropriate budget officer certify) that there are
available in the Fund sufficient amounts to cover all
such obligations incurred consistent with the previous
sentence.
(4) No effect on payments in subsequent years.--In
the case that expenditures from the Fund are applied
to, or otherwise affect, a payment rate for an item or
service under this title for a year, the payment rate
for such item or service shall be computed for a
subsequent year as if such application or effect had
never occurred.
* * * * * * *
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