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113th Congress                                            Rept. 113-257
                        HOUSE OF REPRESENTATIVES
 2d Session                                                      Part 2

======================================================================



 
         SGR REPEAL AND MEDICARE BENEFICIARY ACCESS ACT OF 2013

                                _______
                                

 March 14, 2014.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

Mr. Camp, from the Committee on Ways and Means, submitted the following

                              R E P O R T

                        [To accompany H.R. 2810]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Ways and Means, to whom was referred the 
bill (H.R. 2810) to amend title XVIII of the Social Security 
Act to reform the sustainable growth rate and Medicare payment 
for physicians' services, and for other purposes, having 
considered the same, report favorably thereon with an amendment 
and recommend that the bill as amended do pass.
    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

  (a) Short Title.--This Act may be cited as the ``SGR Repeal and 
Medicare Beneficiary Access Act of 2013''.
  (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Repealing the sustainable growth rate (SGR) and improving 
medicare payment for physicians' services.
Sec. 3. Priorities and funding for quality measure development.
Sec. 4. Encouraging care management for individuals with chronic care 
needs.
Sec. 5. Ensuring accurate valuation of services under the physician fee 
schedule.
Sec. 6. Promoting evidence-based care.
Sec. 7. Empowering beneficiary choices through access to information on 
physicians' services.
Sec. 8. Expanding claims data availability to improve care.
Sec. 9. Reducing administrative burden and other provisions.

SEC. 2. REPEALING THE SUSTAINABLE GROWTH RATE (SGR) AND IMPROVING 
                    MEDICARE PAYMENT FOR PHYSICIANS' SERVICES.

  (a) Stabilizing Fee Updates.--
          (1) Repeal of sgr payment methodology.--Section 1848 of the 
        Social Security Act (42 U.S.C. 1395w-4) is amended--
                  (A) in subsection (d)--
                          (i) in paragraph (1)(A), by inserting ``or a 
                        subsequent paragraph'' after ``paragraph (4)''; 
                        and
                          (ii) in paragraph (4)--
                                  (I) in the heading, by inserting 
                                ``and ending with 2013'' after ``years 
                                beginning with 2001''; and
                                  (II) in subparagraph (A), by 
                                inserting ``and ending with 2013'' 
                                after ``a year beginning with 2001''; 
                                and
                  (B) in subsection (f)--
                          (i) in paragraph (1)(B), by inserting 
                        ``through 2013'' after ``of each succeeding 
                        year''; and
                          (ii) in paragraph (2), by inserting ``and 
                        ending with 2013'' after ``beginning with 
                        2000''.
          (2) Update of rates for 2014 and subsequent years.--
        Subsection (d) of section 1848 of the Social Security Act (42 
        U.S.C. 1395w-4) is amended by adding at the end the following 
        new paragraphs:
          ``(15) Update for 2014 through 2016.--The update to the 
        single conversion factor established in paragraph (1)(C) for 
        each of 2014 through 2016 shall be 0.5 percent.
          ``(16) Update for 2017 through 2023.--The update to the 
        single conversion factor established in paragraph (1)(C) for 
        each of 2017 through 2023 shall be zero percent.
          ``(17) Update for 2024 and subsequent years.--The update to 
        the single conversion factor established in paragraph (1)(C) 
        for 2024 and each subsequent year shall be--
                  ``(A) for items and services furnished by a 
                qualifying APM participant (as defined in section 
                1833(z)(2)) for such year, 2 percent; and
                  ``(B) for other items and services, 1 percent.''.
          (3) MedPAC reports.--
                  (A) Initial report.--Not later than July 1, 2016, the 
                Medicare Payment Advisory Commission shall submit to 
                Congress a report on the relationship between--
                          (i) physician and other health professional 
                        utilization and expenditures (and the rate of 
                        increase of such utilization and expenditures) 
                        of items and services for which payment is made 
                        under section 1848 of the Social Security Act 
                        (42 U.S.C. 1395w-4); and
                          (ii) total utilization and expenditures (and 
                        the rate of increase of such utilization and 
                        expenditures) under parts A, B, and D of title 
                        XVIII of such Act.
                Such report shall include a methodology to describe 
                such relationship and the impact of changes in such 
                physician and other health professional practice and 
                service ordering patterns on total utilization and 
                expenditures under parts A, B, and D of such title.
                  (B) Final report.--Not later than July 1, 2020, the 
                Medicare Payment Advisory Commission shall submit to 
                Congress a report on the relationship described in 
                subparagraph (A), including the results determined from 
                applying the methodology included in the report 
                submitted under such subparagraph.
  (b) Consolidation of Certain Current Law Performance Programs With 
New Value-based Performance Incentive Program.--
          (1) EHR meaningful use incentive program.--
                  (A) Sunsetting separate meaningful use payment 
                adjustments.--Section 1848(a)(7)(A) of the Social 
                Security Act (42 U.S.C. 1395w-4(a)(7)(A)) is amended--
                          (i) in clause (i), by striking ``or any 
                        subsequent payment year'' and inserting ``or 
                        2016'';
                          (ii) in clause (ii)--
                                  (I) in the matter preceding subclause 
                                (I), by striking ``Subject to clause 
                                (iii), for'' and inserting ``For'';
                                  (II) in subclause (I), by adding at 
                                the end ``and'';
                                  (III) in subclause (II), by striking 
                                ``; and'' and inserting a period; and
                                  (IV) by striking subclause (III); and
                          (iii) by striking clause (iii).
                  (B) Continuation of meaningful use determinations for 
                vbp program.--Section 1848(o)(2) of the Social Security 
                Act (42 U.S.C. 1395w-4(o)(2)) is amended--
                          (i) in subparagraph (A), in the matter 
                        preceding clause (i)--
                                  (I) by striking ``For purposes of 
                                paragraph (1), an'' and inserting 
                                ``An''; and
                                  (II) by inserting ``, or pursuant to 
                                subparagraph (D) for purposes of 
                                subsection (q), for a performance 
                                period under such subsection for a 
                                year'' after ``under such subsection 
                                for a year''; and
                          (ii) by adding at the end the following new 
                        subparagraph:
                  ``(D) Continued application for purposes of vbp 
                program.--With respect to 2017 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 VBP 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.''.
          (2) Quality reporting.--
                  (A) Sunsetting separate quality reporting 
                incentives.--Section 1848(a)(8)(A) of the Social 
                Security Act (42 U.S.C. 1395w-4(a)(8)(A)) is amended--
                          (i) in clause (i), by striking ``or any 
                        subsequent year'' and inserting ``or 2016''; 
                        and
                          (ii) in clause (ii)(II), by striking ``and 
                        each subsequent year''.
                  (B) Continuation of quality measures and processes 
                for vbp program.--Section 1848 of the Social Security 
                Act (42 U.S.C. 1395w-4) is amended--
                          (i) in subsection (k), by adding at the end 
                        the following new paragraph:
          ``(9) Continued application for purposes of vbp program.--The 
        Secretary shall, in accordance with subsection (q)(1)(F), carry 
        out the provisions of this subsection for purposes of 
        subsection (q).''; and
                          (ii) in subsection (m)--
                                  (I) by redesignating the paragraph 
                                (7) added by section 10327(a) of Public 
                                Law 111-148 as paragraph (8); and
                                  (II) by adding at the end the 
                                following new paragraph:
          ``(9) Continued application for purposes of vbp program.--The 
        Secretary shall, in accordance with subsection (q)(1)(F), carry 
        out the processes under this subsection for purposes of 
        subsection (q).''.
          (3) Value-based payments.--
                  (A) Sunsetting separate value-based payments.--Clause 
                (iii) of section 1848(p)(4)(B) of the Social Security 
                Act (42 U.S.C. 1395w-4(p)(4)(B)) is amended to read as 
                follows:
                          ``(iii) Application.--The Secretary shall 
                        apply the payment modifier established under 
                        this subsection for items and services 
                        furnished on or after January 1, 2015, but 
                        before January 1, 2017, with respect to 
                        specific physicians and groups of physicians 
                        the Secretary determines appropriate. Such 
                        payment modifier shall not be applied for items 
                        and services furnished on or after January 1, 
                        2017.''.
                  (B) Continuation of value-based payment modifier 
                measures for vbp program.--Section 1848(p) of the 
                Social Security Act (42 U.S.C. 1395w-4(p)) is amended--
                          (i) in paragraph (2), by adding at the end 
                        the following new subparagraph:
                  ``(C) Continued application for purposes of vbp 
                program.--The Secretary shall, in accordance with 
                subsection (q)(1)(F), carry out subparagraph (B) for 
                purposes of subsection (q).'' ; and
                          (ii) in paragraph (3), by adding at the end 
                        the following: ``With respect to 2017 and each 
                        subsequent year, the Secretary shall, in 
                        accordance with subsection (q)(1)(F), carry out 
                        this paragraph for purposes of subsection 
                        (q).''.
  (c) Value-based Performance Incentive Program.--
          (1) In general.--Section 1848 of the Social Security Act (42 
        U.S.C. 1395w-4) is amended by adding at the end the following 
        new subsection:
  ``(q) Value-based Performance Incentive Program.--
          ``(1) Establishment.--
                  ``(A) In general.--Subject to the succeeding 
                provisions of this subsection, the Secretary shall 
                establish an eligible professional value-based 
                performance incentive program (in this subsection 
                referred to as the `VBP program') under which the 
                Secretary shall--
                          ``(i) develop a methodology for assessing the 
                        total performance of each VBP 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 VBP eligible professional for a 
                        performance period for a year to make VBP 
                        program incentive payments under paragraph (7) 
                        to the professional for the year.
                  ``(B) Program implementation.--The VBP program shall 
                apply to payments for items and services furnished on 
                or after January 1, 2017.
                  ``(C) VBP eligible professional defined.--
                          ``(i) In general.--For purposes of this 
                        subsection, subject to clauses (ii) and (iv), 
                        the term `VBP eligible professional' means--
                                  ``(I) for the first and second years 
                                for which the VBP program applies to 
                                payments (and for the performance 
                                period for such first and second year), 
                                a physician (as defined in section 
                                1861(r)(1)), 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) for the third year for which 
                                the VBP program 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) and such other eligible 
                                professionals (as defined in subsection 
                                (k)(3)(B)) as specified by the 
                                Secretary.
                          ``(ii) Exclusions.--For purposes of clause 
                        (i), the term `VBP eligible professional' does 
                        not include, with respect to a year, an 
                        eligible professional (as defined in subsection 
                        (k)(3)(B))--
                                  ``(I) who is a qualifying APM 
                                participant (as defined in section 
                                1833(z)(2));
                                  ``(II) who, 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 VBP 
                                program; or
                                  ``(III) who, 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 2017 and 2018, 
                                the reference in subparagraph (A) of 
                                such paragraph to 25 percent was 
                                instead a reference to 20 percent;
                                  ``(II) with respect to 2019 and 
                                2020--
                                          ``(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 2021 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 one of 
                        the following low-volume threshold measurements 
                        to apply for purposes of clause (ii)(III):
                                  ``(I) The minimum number (as 
                                determined by the Secretary) of 
                                individuals enrolled under this part 
                                who are treated by the VBP 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 
                        VBP 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 VBP eligible 
                        professional (including pursuant to clauses 
                        (ii) and (v)) with respect to a year, in no 
                        case shall a reduction under paragraph (6) or a 
                        VBP program incentive payment under paragraph 
                        (7) apply to such individual for such year.
                          ``(vii) Partial qualifying apm participant 
                        clarification.--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 
                        VBP program, such eligible professional is 
                        considered to be a VBP eligible professional 
                        with respect to such year.
                  ``(D) Application to group practices.--
                          ``(i) In general.--Under the VBP program:
                                  ``(I) Quality performance category.--
                                The Secretary shall establish and apply 
                                a process that includes features of the 
                                provisions of subsection (m)(3)(C) for 
                                VBP 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 VBP 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 full range of items and 
                        services furnished by the VBP eligible 
                        professionals in the group practice involved.
                          ``(iii) Clarification.--VBP eligible 
                        professionals electing to be a virtual group 
                        under paragraph (5)(J) shall not be considered 
                        VBP eligible professionals in a group practice 
                        for purposes of applying this subparagraph.
                  ``(E) Use of registries.--Under the VBP program, 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.
          ``(2) Measures and activities under performance categories.--
                  ``(A) Performance categories.--Under the VBP program, 
                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 established for such period under 
                        subsections (k) and (m), including under 
                        subsection (m)(3)(E), and the measures of 
                        quality of care established for such period 
                        under subsection (p)(2).
                          ``(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 covered part D drugs.
                          ``(iii) Clinical practice improvement 
                        activities.--For the performance category 
                        described in subparagraph (A)(iii), clinical 
                        practice improvement activities under 
                        subcategories specified by the Secretary for 
                        such period, which shall include at least the 
                        following:
                                  ``(I) The subcategory of expanded 
                                practice access, which shall include 
                                activities such as same day 
                                appointments for urgent needs and after 
                                hours access to clinician advice.
                                  ``(II) The subcategory of population 
                                management, which shall include 
                                activities 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, which shall include 
                                activities 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, which shall include 
                                activities such as the establishment of 
                                care plans for individuals with complex 
                                care needs, beneficiary self-management 
                                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 
                        fewer than 20 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 
                        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 
                        for purposes of the performance category 
                        described in subparagraph (A)(i).
                          ``(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) Request for information for clinical 
                        practice improvement activities.--In initially 
                        applying subparagraph (B)(iii), the Secretary 
                        shall use a request for information to solicit 
                        recommendations from stakeholders for 
                        identifying activities described in such 
                        subparagraph and specifying criteria for such 
                        activities.
                          ``(v) 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--
                                  ``(I) identifying activities 
                                described in subparagraph (B)(iii);
                                  ``(II) specifying criteria for such 
                                activities; and
                                  ``(III) determining whether a VBP 
                                eligible professional meets such 
                                criteria.
                          ``(vi) Application of measures and activities 
                        to non-patient-facing providers.--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 provide 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 VBP eligible 
                                professionals of such professional 
                                types or subcategories, in lieu of such 
                                a measure or activity, a comparable 
                                measure or activity that fulfills 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.
          ``(3) Performance standards.--
                  ``(A) Establishment.--Under the VBP program, 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 take into account the 
                following:
                          ``(i) Historical performance standards.
                          ``(ii) Improvement rates.
                          ``(iii) The opportunity for continued 
                        improvement.
          ``(4) Performance period.--The Secretary shall establish a 
        performance period (or periods) for a year (beginning with the 
        year described in paragraph (1)(B)). 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 consistent with 
                section 2(g)(2) of the SGR Repeal and Medicare 
                Beneficiary Access Act of 2013, the Secretary shall 
                develop a methodology for assessing the total 
                performance of each VBP 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 (in this subsection 
                referred to as the `composite performance score') for 
                each such professional for each performance period.
                  ``(B) Weighting performance categories, measures, and 
                activities.--Under the methodology under subparagraph 
                (A), the Secretary--
                          ``(i) may assign different scoring weights 
                        (including a weight of 0) for--
                                  ``(I) each performance category based 
                                on the extent to which the category is 
                                applicable to the type of eligible 
                                professional involved; and
                                  ``(II) 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 to the type of 
                                eligible professional involved; and
                          ``(ii) with respect to the performance 
                        category described in paragraph (2)(A)(i)--
                                  ``(I) shall assign a higher scoring 
                                weight to outcomes measures than to 
                                other measures and increase the scoring 
                                weight for outcome measures over time; 
                                and
                                  ``(II) may assign a higher scoring 
                                weight to patient experience measures.
                  ``(C) 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 VBP 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 for reporting quality measures.--
                        Under the methodology established under 
                        subparagraph (A), the Secretary shall--
                                  ``(I) encourage VBP 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
                                  ``(II) with respect to a performance 
                                period, with respect to a year, for 
                                which a VBP 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.
                  ``(D) Clinical practice improvement activities 
                performance score.--
                          ``(i) Rule for accreditation.--A VBP eligible 
                        professional who is in a practice that is 
                        certified as a patient-centered medical home or 
                        comparable specialty practice pursuant to 
                        subsection (b)(8)(B)(i) 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 
                        VBP 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 
                        one-half of the highest potential score for the 
                        performance category described in paragraph 
                        (2)(A)(iii) for such performance period. 
                        Nothing in the previous sentence shall prevent 
                        such professional from earning more than one-
                        half of such highest potential score for such 
                        performance period by performing additional 
                        activities with respect to such performance 
                        category.
                          ``(iii) Subcategories.--A VBP eligible 
                        professional shall not be required to perform 
                        activities in each subcategory under paragraph 
                        (2)(B)(iii) to achieve the highest potential 
                        score for the performance category described in 
                        paragraph (2)(A)(iii).
                  ``(E) Distribution.--The Secretary shall ensure that 
                the application of the methodology developed under 
                subparagraph (A) results in a continuous distribution 
                of performance scores, which shall result in 
                differential payments under paragraph (7).
                  ``(F) Achievement and improvement.--
                          ``(i) Taking into account improvement.--
                        Beginning with the second year to which the VBP 
                        program applies, in addition to the achievement 
                        score of a VBP eligible professional, 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.--Beginning with the fourth year to 
                        which the VBP program applies, under the 
                        methodology developed under subparagraph (A), 
                        the Secretary may assign a higher scoring 
                        weight under subparagraph (B) with respect to 
                        the achievement score of a VBP eligible 
                        professional with respect to a measure or 
                        activity specified under paragraph (2)(B) (or 
                        with respect to such a measure or activity and 
                        with respect to categories described in 
                        paragraph (2)(A)) than to any improvement score 
                        applied under clause (i) with respect to such 
                        measure or activity (or such measure or 
                        activity and categories).
                  ``(G) Weights for the performance categories.--
                          ``(i) In general.--Under the methodology 
                        developed under subparagraph (A), subject to 
                        clauses (ii) and (iii), the composite 
                        performance score shall be determined as 
                        follows:
                                  ``(I) Quality.--
                                          ``(aa) In general.--Subject 
                                        to item (bb), 30 percent of 
                                        such score shall be based on 
                                        performance with respect to the 
                                        category described in clause 
                                        (i) of paragraph (2)(A).
                                          ``(bb) First 2 years and test 
                                        year.--For the first and second 
                                        years for which the VBP program 
                                        applies to payments, 60 percent 
                                        of such score shall be based on 
                                        performance with respect to the 
                                        category described in clause 
                                        (i) of paragraph (2)(A). With 
                                        respect to the subsequent year, 
                                        the percent described in item 
                                        (aa) of such score shall be 
                                        based on performance with 
                                        respect to such category only 
                                        for purposes of feedback and 60 
                                        percent of such score shall be 
                                        based on performance with 
                                        respect to such category for 
                                        any other purpose under this 
                                        subsection.
                                  ``(II) Resource use.--
                                          ``(aa) In general.--Subject 
                                        to item (bb), 30 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 and test 
                                        year.--For the first and second 
                                        years for which the VBP program 
                                        applies to payments, zero 
                                        percent of such score shall be 
                                        based on performance with 
                                        respect to the category 
                                        described in clause (ii) of 
                                        paragraph (2)(A). With respect 
                                        to the subsequent year, the 
                                        percent described in item (aa) 
                                        of such score shall be based on 
                                        performance with respect to 
                                        such category only for purposes 
                                        of feedback and zero percent of 
                                        such score shall be based on 
                                        performance with respect to 
                                        such category for any other 
                                        purpose under this subsection.
                                  ``(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, the percentages applicable under one or 
                        more of subclauses (I), (II), and (III) of 
                        clause (i) for such year (or, in the case of a 
                        year described in clause (i)(II)(bb), 
                        applicable under one or more of subclauses (I) 
                        and (III)) 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.
                          ``(iii) Authority to adjust percentages for 
                        quality and resource use.--Other than for a 
                        year described in clause (i)(II)(bb), the 
                        percentages described in subclauses (I) and 
                        (II) of clause (i), including after application 
                        of clause (ii), shall be equal.
                  ``(H) 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.
                  ``(I) Inclusion of quality measure data from multiple 
                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 VBP 
                eligible professionals with respect to multiple payers.
                  ``(J) Use of voluntary virtual groups for certain 
                assessment purposes.--
                          ``(i) In general.--In the case of VBP 
                        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)--
                                  ``(I) the assessment of performance 
                                provided under such methodology with 
                                respect to the performance categories 
                                described in clauses (i) and (ii) of 
                                paragraph (2)(A) 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) the composite score provided 
                                under this paragraph for such 
                                performance period with respect to each 
                                such performance category for each such 
                                VBP eligible professional in such 
                                virtual group shall be based on the 
                                assessment of the combined performance 
                                under subclause (I) for the performance 
                                category and performance period.
                          ``(ii) Election of practices to be a virtual 
                        group.--The Secretary shall, in accordance with 
                        clause (iii), establish and have in place a 
                        process to allow an individual VBP eligible 
                        professional or a group practice consisting of 
                        not more than 10 VBP eligible professionals to 
                        elect, with respect to a performance period for 
                        a year, for such individual VBP eligible 
                        professional or all such VBP eligible 
                        professionals in such group practice, 
                        respectively, to be a virtual group under this 
                        subparagraph with at least one other such 
                        individual VBP eligible professional or group 
                        practice making such an election.
                          ``(iii) Requirements.--The process under 
                        clause (ii) shall provide that--
                                  ``(I) 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; 
                                and
                                  ``(II) a practice described in such 
                                clause, and each VBP eligible 
                                professional in such practice, may 
                                elect to be in no more than one virtual 
                                group for a performance period.
          ``(6) Funding for vbp program incentive payments.--
                  ``(A) Total amount for incentive payments.--The total 
                amount for VBP program incentive payments under 
                paragraph (7) for all VBP eligible professionals for a 
                year shall be equal to the total amount of the 
                performance funding pool for all VBP eligible 
                professionals under subparagraph (B) for such year, as 
                estimated by the Secretary.
                  ``(B) Performance funding pool.--
                          ``(i) In general.--In the case of items and 
                        services furnished by a VBP eligible 
                        professional during a year (beginning with 
                        2017), the otherwise applicable fee schedule 
                        amount (as defined in clause (iii)) with 
                        respect to such items and services and eligible 
                        professional for such year shall be reduced by 
                        the applicable percent under clause (ii). The 
                        total amount of such reductions for a year 
                        shall be referred to in this subsection as the 
                        `performance funding pool' for such year.
                          ``(ii) Applicable percent defined.--For 
                        purposes of clause (i), the term `applicable 
                        percent' means--
                                  ``(I) for 2017, 4 percent;
                                  ``(II) for 2018, 6 percent;
                                  ``(III) for 2019, 8 percent;
                                  ``(IV) for 2020, 10 percent; and
                                  ``(V) for 2021 and subsequent years, 
                                a percent specified by the Secretary 
                                (but in no case less than 10 percent or 
                                more than 12 percent).
                          ``(iii) Otherwise applicable fee schedule 
                        amount.--For purposes of this subparagraph and 
                        paragraph (7), the term `otherwise applicable 
                        fee schedule amount' means, with respect to 
                        items and services furnished by a VBP eligible 
                        professional during a year, the fee schedule 
                        amount for such items and services and year 
                        that would otherwise apply (without application 
                        of this subparagraph or paragraph (7)) with 
                        respect to such eligible professional under 
                        subsection (b), after application of subsection 
                        (a)(3), or under another fee schedule under 
                        this part.
          ``(7) VBP program incentive payments.--
                  ``(A) VBP program incentive payment adjustment 
                factor.--Consistent with section 2(g)(2) of the SGR 
                Repeal and Medicare Beneficiary Access Act of 2013, the 
                Secretary shall specify a VBP program incentive payment 
                adjustment factor for each VBP eligible professional 
                for a year. Such VBP program incentive payment 
                adjustment factor for a VBP eligible professional for a 
                year shall be determined--
                          ``(i) by the composite performance score of 
                        the eligible professional for such year;
                          ``(ii) in a manner such that the adjustment 
                        factors specified under this subparagraph for a 
                        year results in differential payments under 
                        this paragraph reflecting the full range of the 
                        distribution of composite performance scores of 
                        VBP eligible professionals determined under 
                        paragraph (5)(E) for such year, with such 
                        professionals having higher composite 
                        performance scores receiving higher payment; 
                        and
                          ``(iii) in a manner such that the adjustment 
                        factors specified under this subparagraph for a 
                        year--
                                  ``(I) does not result in a payment 
                                reduction for such year by an amount 
                                that exceeds the applicable percent 
                                described in paragraph (6)(B)(ii) for 
                                such year; and
                                  ``(II) does not result in a payment 
                                increase for such year by an amount 
                                that exceeds the applicable percent 
                                described in paragraph (6)(B)(ii) for 
                                such year.
                  ``(B) Calculation of vbp program incentive payment 
                amounts.--The VBP program incentive payment amount with 
                respect to items and services furnished by a VBP 
                eligible professional during a year shall be equal to 
                the difference between--
                          ``(i) the product of--
                                  ``(I) the VBP program incentive 
                                payment adjustment factor determined 
                                under subparagraph (A) for such VBP 
                                eligible professional for such year; 
                                and
                                  ``(II) the otherwise applicable fee 
                                schedule amount (as defined in 
                                paragraph (6)(B)(iii)) with respect to 
                                such items and services and eligible 
                                professional for such year; and
                          ``(ii) the otherwise applicable fee schedule 
                        amount, as reduced under paragraph (6)(B), with 
                        respect to such items and services, eligible 
                        professional, and year.
                The application of the preceding sentence may result in 
                the VBP program incentive payment amount being 0.0 with 
                respect to an item or service furnished by a VBP 
                eligible professional.
                  ``(C) Application of vbp program incentive payment 
                amount.--In the case of items and services furnished by 
                a VBP eligible professional during a year (beginning 
                with 2017), the otherwise applicable fee schedule 
                amount, as reduced under paragraph (6)(B), with respect 
                to such items and services and eligible professional 
                for such year shall be increased, if applicable, by the 
                VBP program incentive payment amount determined under 
                subparagraph (B) with respect to such items and 
                services, professional, and year.
                  ``(D) Budget neutrality.--In specifying the VBP 
                program incentive payment adjustment factor for each 
                VBP eligible professional for a year under subparagraph 
                (A), the Secretary shall ensure that the total amount 
                of VBP program incentive payment amounts under this 
                paragraph for all VBP eligible professionals in a year 
                shall be equal to the performance funding pool for such 
                year under paragraph (6), as estimated by the 
                Secretary.
          ``(8) Announcement of result of adjustments.--Under the VBP 
        program, the Secretary shall, not later than 60 days prior to 
        the year involved, make available to each VBP eligible 
        professional the VBP program incentive payment adjustment 
        factor under paragraph (7) and the payment reduction under 
        paragraph (6) applicable to the eligible professional for items 
        and services furnished by the professional in such year. The 
        Secretary may include such information in the confidential 
        feedback under paragraph (13).
          ``(9) No effect in subsequent years.--The VBP program 
        incentive payment under paragraph (7) and the payment reduction 
        under paragraph (6) shall each apply only with respect to the 
        year involved, and the Secretary shall not take into account 
        such VBP program incentive payment or payment reduction in 
        making payments to a VBP eligible professional under this part 
        in a subsequent year.
          ``(10) Public reporting.--
                  ``(A) In general.--The Secretary shall, in an easily 
                understandable format, make available on the Physician 
                Compare Internet website under subsection (t) the 
                following:
                          ``(i) Information regarding the performance 
                        of VBP eligible professionals under the VBP 
                        program, which--
                                  ``(I) shall include the composite 
                                score for each such VBP eligible 
                                professional and the performance of 
                                each such VBP eligible professional 
                                with respect to each performance 
                                category; and
                                  ``(II) may include the performance of 
                                each such VBP 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 VBP program, 
                including the range of composite scores for all VBP 
                eligible professionals and the range of the performance 
                of all VBP eligible professionals with respect to each 
                performance category.
          ``(11) Consultation.--The Secretary shall consult with 
        stakeholders in carrying out the VBP program, including for the 
        identification of measures and activities under paragraph 
        (2)(B) and the methodologies developed under paragraphs (5)(A) 
        and (7). Such consultation shall include the use of a request 
        for information or other mechanisms determined appropriate.
          ``(12) 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 VBP 
                eligible professionals in practices of fewer than 20 
                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 
                the Public Health Service Act), or 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 implementation.--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 $50,000,000 for each of 
                fiscal years 2014 through 2018. Amounts transferred 
                under this subparagraph for a fiscal year shall be 
                available until expended.
          ``(13) Feedback and information to improve performance.--
                  ``(A) Performance feedback.--
                          ``(i) In general.--Beginning July 1, 2015, 
                        the Secretary--
                                  ``(I) shall make available timely 
                                (such as quarterly) confidential 
                                feedback to each VBP eligible 
                                professional on the performance of such 
                                professional with respect to the 
                                performance categories under clauses 
                                (i) and (ii) of paragraph (2)(A); and
                                  ``(II) may make available 
                                confidential feedback to each such 
                                professional on the performance of such 
                                professional 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. 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 VBP 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, 2016, 
                        the Secretary shall make available to each VBP 
                        eligible professional information, with respect 
                        to individuals who are patients of such VBP 
                        eligible professional, 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 shall be made available under 
                        the previous sentence to such VBP eligible 
                        professionals by mechanisms determined 
                        appropriate by the Secretary, which may include 
                        use of a web-based portal. Such information 
                        shall be made available in accordance with the 
                        same or similar terms as data are made 
                        available to accountable care organizations 
                        under section 1899, including a beneficiary 
                        opt-out.
                          ``(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 VBP 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), 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 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) for care episodes for 
                                such period.
          ``(14) Review.--
                  ``(A) Targeted review.--The Secretary shall establish 
                a process under which a VBP eligible professional may 
                seek an informal review of the calculation of the VBP 
                program incentive payment adjustment factor 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 (7) with respect to a year 
                (other than with respect to the calculation of such 
                eligible professional's VBP program incentive payment 
                adjustment factor for such year) after the factors 
                determined in subparagraph (A) 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 VBP program incentive payment 
                        adjustment factor under paragraph (7) and the 
                        determination of such amount.
                          ``(ii) The determination of the amount of 
                        funding available for such VBP program 
                        incentive payments under paragraph (6)(A) and 
                        the payment reduction under paragraph 
                        (6)(B)(i).
                          ``(iii) The establishment of the performance 
                        standards under paragraph (3) and the 
                        performance period under paragraph (4).
                          ``(iv) 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 (10).
                          ``(v) 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.''.
          (2) GAO reports.--
                  (A) Evaluation of eligible professional vbp 
                program.--Not later than October 1, 2018, and October 
                1, 2021, the Comptroller General of the United States 
                shall submit to Congress a report evaluating the 
                eligible professional value-based performance incentive 
                program under subsection (q) of section 1848 of the 
                Social Security Act (42 U.S.C. 1395w-4), as added by 
                paragraph (1). Such report shall--
                          (i) examine the distribution of the 
                        performance and incentive payments for VBP 
                        eligible professionals (as defined in 
                        subsection (q)(1)(C) of such section) under 
                        such program, and patterns relating to such 
                        performance and incentive payments, including 
                        based on type of provider, practice size, 
                        geographic location, and patient mix; and
                          (ii) provide recommendations for improving 
                        such program.
                  (B) Study to examine alignment of quality measures 
                used in public and private programs.--Not later than 18 
                months after the date of the enactment of this Act, the 
                Comptroller General of the United States shall submit 
                to Congress a report that--
                          (i) compares the similarities and differences 
                        in the use of quality measures under the 
                        original medicare fee-for-service program under 
                        parts A and B of title XVIII of the Social 
                        Security Act, the Medicare Advantage program 
                        under part C of such title, and private payer 
                        arrangements; and
                          (ii) makes recommendations on how to reduce 
                        the administrative burden involved in applying 
                        such quality measures.
          (3) Funding for implementation.--For purposes of implementing 
        the provisions of and the amendments made by this section, the 
        Secretary of Health and Human Services shall provide for the 
        transfer of $50,000,000 from the Supplementary Medical 
        Insurance Trust Fund established under section 1841 of the 
        Social Security Act (42 U.S.C. 1395t) to the Centers for 
        Medicare & Medicaid Program Management Account for each of the 
        fiscal years 2014 through 2017. Amounts transferred under this 
        paragraph shall be available until expended.
  (d) Improving Quality Reporting for Composite Scores.--
          (1) Changes for group reporting option.--
                  (A) In general.--Section 1848(m)(3)(C)(ii)) of the 
                Social Security Act (42 U.S.C. 1395w-4(m)(3)(C)(ii)) is 
                amended by inserting ``and, for 2014 and subsequent 
                years, may provide'' after ``shall provide''.
                  (B) Clarification of qualified clinical data registry 
                reporting to group practices.--Section 1848(m)(3)(D) of 
                the Social Security Act (42 U.S.C. 1395w-4(m)(3)(D)) is 
                amended by inserting ``and, for 2015 and subsequent 
                years, subparagraph (A) or (C)'' after ``subparagraph 
                (A)''.
          (2) Changes for multiple reporting periods and alternative 
        criteria for satisfactory reporting.--Section 1848(m)(5)(F)) of 
        the Social Security Act (42 U.S.C. 1395w-4(m)(5)(F)) is 
        amended--
                  (A) by striking ``and subsequent years'' and 
                inserting ``through reporting periods occurring in 
                2013''; and
                  (B) by inserting ``and, for reporting periods 
                occurring in 2014 and subsequent years, the Secretary 
                may establish'' following ``shall establish''.
          (3) Physician feedback program reports succeeded by reports 
        under vbp program.--Section 1848(n) of the Social Security Act 
        (42 U.S.C. 1395w-4(n)) is amended by adding at the end the 
        following new paragraph:
          ``(11) Reports ending with 2016.--Reports under the Program 
        shall not be provided after December 31, 2016. See subsection 
        (q)(13) for reports beginning with 2017.''.
          (4) Coordination with satisfying meaningful ehr use clinical 
        quality measure reporting requirement.--Section 
        1848(o)(2)(A)(iii) of the Social Security Act (42 U.S.C. 1395w-
        4(o)(2)(A)(iii)) is amended by inserting ``and subsection 
        (q)(5)(C)(ii)(II)'' after ``Subject to subparagraph (B)(ii)''.
  (e) Promoting Alternative Payment Models.--
          (1) Incentive payments for participation in eligible 
        alternative payment models.--Section 1833 of the Social 
        Security Act (42 U.S.C. 1395l) is amended by adding at the end 
        the following new subsection:
  ``(z) Incentive Payments for Participation in Eligible Alternative 
Payment Models.--
          ``(1) Payment incentive.--
                  ``(A) In general.--In the case of covered 
                professional services furnished by an eligible 
                professional during a year that is in the period 
                beginning with 2017 and ending with 2022 and for which 
                the professional is a qualifying APM participant, in 
                addition to the amount of payment that would otherwise 
                be made for such covered professional services under 
                this part for such year, there also shall be paid to 
                such professional an amount equal to 5 percent of the 
                payment amount for the covered professional services 
                under this part for the preceding year. For purposes of 
                the previous sentence, the payment amount for the 
                preceding year may be an estimation for the full 
                preceding year based on a period of such preceding year 
                that is less than the full year. The Secretary shall 
                establish policies to implement this subparagraph in 
                cases where payment for covered professional services 
                furnished by a qualifying APM participant in an 
                alternative payment model is made to an entity 
                participating in the alternative payment model rather 
                than directly to the qualifying APM participant.
                  ``(B) Form of payment.--Payments under this 
                subsection shall be made in a lump sum, on an annual 
                basis, as soon as practicable.
                  ``(C) Treatment of payment incentive.--Payments under 
                this subsection shall not be taken into account for 
                purposes of determining actual expenditures under an 
                alternative payment model and for purposes of 
                determining or rebasing any benchmarks used under the 
                alternative payment model.
                  ``(D) Coordination.--The amount of the additional 
                payment for an item or service under this subsection or 
                subsection (m) shall be determined without regard to 
                any additional payment for the item or service under 
                subsection (m) and this subsection, respectively. The 
                amount of the additional payment for an item or service 
                under this subsection or subsection (x) shall be 
                determined without regard to any additional payment for 
                the item or service under subsection (x) and this 
                subsection, respectively. The amount of the additional 
                payment for an item or service under this subsection or 
                subsection (y) shall be determined without regard to 
                any additional payment for the item or service under 
                subsection (y) and this subsection, respectively.
          ``(2) Qualifying apm participant.--For purposes of this 
        subsection, the term `qualifying APM participant' means the 
        following:
                  ``(A) 2017 and 2018.--With respect to 2017 and 2018, 
                an eligible professional for whom the Secretary 
                determines that at least 25 percent of payments under 
                this part for covered professional services furnished 
                by such professional during the most recent period for 
                which data are available (which may be less than a 
                year) were attributable to such services furnished 
                under this part through an entity that participates in 
                an eligible alternative payment model with respect to 
                such services.
                  ``(B) 2019 and 2020.--With respect to 2019 and 2020, 
                an eligible professional described in either of the 
                following clauses:
                          ``(i) Medicare revenue threshold option.--An 
                        eligible professional for whom the Secretary 
                        determines that at least 50 percent of payments 
                        under this part for covered professional 
                        services furnished by such professional during 
                        the most recent period for which data are 
                        available (which may be less than a year) were 
                        attributable to such services furnished under 
                        this part through an entity that participates 
                        in an eligible alternative payment model with 
                        respect to such services.
                          ``(ii) Combination all-payer and medicare 
                        revenue threshold option.--An eligible 
                        professional--
                                  ``(I) for whom the Secretary 
                                determines, with respect to items and 
                                services furnished by such professional 
                                during the most recent period for which 
                                data are available (which may be less 
                                than a year), that at least 50 percent 
                                of the sum of--
                                          ``(aa) payments described in 
                                        clause (i); and
                                          ``(bb) all other payments, 
                                        regardless of payer (other than 
                                        payments made by the Secretary 
                                        of Defense or the Secretary of 
                                        Veterans Affairs under chapter 
                                        55 of title 10, United States 
                                        Code, or title 38, United 
                                        States Code, or any other 
                                        provision of law),
                                 meet the requirement described in 
                                clause (iii)(I) with respect to 
                                payments described in item (aa) and 
                                meet the requirement described in 
                                clause (iii)(II) with respect to 
                                payments described in item (bb);
                                  ``(II) for whom the Secretary 
                                determines at least 25 percent of 
                                payments under this part for covered 
                                professional services furnished by such 
                                professional during the most recent 
                                period for which data are available 
                                (which may be less than a year) were 
                                attributable to such services furnished 
                                under this part through an entity that 
                                participates in an eligible alternative 
                                payment model with respect to such 
                                services; and
                                  ``(III) who provides to the Secretary 
                                such information as is necessary for 
                                the Secretary to make a determination 
                                under subclause (I), with respect to 
                                such professional.
                          ``(iii) Requirement.--For purposes of clause 
                        (ii)(I)--
                                  ``(I) the requirement described in 
                                this subclause, with respect to 
                                payments described in item (aa) of such 
                                clause, is that such payments are made 
                                under an eligible alternative payment 
                                model; and
                                  ``(II) the requirement described in 
                                this subclause, with respect to 
                                payments described in item (bb) of such 
                                clause, is that such payments are made 
                                under an arrangement in which--
                                          ``(aa) quality measures 
                                        comparable to measures under 
                                        the performance category 
                                        described in section 
                                        1848(q)(2)(B)(i) apply;
                                          ``(bb) certified EHR 
                                        technology is used; and
                                          ``(cc) the eligible 
                                        professional bears more than 
                                        nominal financial risk if 
                                        actual aggregate expenditures 
                                        exceeds expected aggregate 
                                        expenditures.
                  ``(C) Beginning in 2021.--With respect to 2021 and 
                each subsequent year, an eligible professional 
                described in either of the following clauses:
                          ``(i) Medicare revenue threshold option.--An 
                        eligible professional for whom the Secretary 
                        determines that at least 75 percent of payments 
                        under this part for covered professional 
                        services furnished by such professional during 
                        the most recent period for which data are 
                        available (which may be less than a year) were 
                        attributable to such services furnished under 
                        this part through an entity that participates 
                        in an eligible alternative payment model with 
                        respect to such services.
                          ``(ii) Combination all-payer and medicare 
                        revenue threshold option.--An eligible 
                        professional--
                                  ``(I) for whom the Secretary 
                                determines, with respect to items and 
                                services furnished by such professional 
                                during the most recent period for which 
                                data are available (which may be less 
                                than a year), that at least 75 percent 
                                of the sum of--
                                          ``(aa) payments described in 
                                        clause (i); and
                                          ``(bb) all other payments, 
                                        regardless of payer (other than 
                                        payments made by the Secretary 
                                        of Defense or the Secretary of 
                                        Veterans Affairs under chapter 
                                        55 of title 10, United States 
                                        Code, or title 38, United 
                                        States Code, or any other 
                                        provision of law),
                                 meet the requirement described in 
                                clause (iii)(I) with respect to 
                                payments described in item (aa) and 
                                meet the requirement described in 
                                clause (iii)(II) with respect to 
                                payments described in item (bb);
                                  ``(II) for whom the Secretary 
                                determines at least 25 percent of 
                                payments under this part for covered 
                                professional services furnished by such 
                                professional during the most recent 
                                period for which data are available 
                                (which may be less than a year) were 
                                attributable to such services furnished 
                                under this part through an entity that 
                                participates in an eligible alternative 
                                payment model with respect to such 
                                services; and
                                  ``(III) who provides to the Secretary 
                                such information as is necessary for 
                                the Secretary to make a determination 
                                under subclause (I), with respect to 
                                such professional.
                          ``(iii) Requirement.--For purposes of clause 
                        (ii)(I)--
                                  ``(I) the requirement described in 
                                this subclause, with respect to 
                                payments described in item (aa) of such 
                                clause, is that such payments are made 
                                under an eligible alternative payment 
                                model; and
                                  ``(II) the requirement described in 
                                this subclause, with respect to 
                                payments described in item (bb) of such 
                                clause, is that such payments are made 
                                under an arrangement in which--
                                          ``(aa) quality measures 
                                        comparable to measures under 
                                        the performance category 
                                        described in section 
                                        1848(q)(2)(B)(i) apply;
                                          ``(bb) certified EHR 
                                        technology is used; and
                                          ``(cc) the eligible 
                                        professional bears more than 
                                        nominal financial risk if 
                                        actual aggregate expenditures 
                                        exceeds expected aggregate 
                                        expenditures.
          ``(2) Additional definitions.--In this subsection:
                  ``(A) Covered professional services.--The term 
                `covered professional services' has the meaning given 
                that term in section 1848(k)(3)(A).
                  ``(B) Eligible professional.--The term `eligible 
                professional' has the meaning given that term in 
                section 1848(k)(3)(B).
                  ``(C) Alternative payment model (apm).--The term 
                `alternative payment model' means any of the following:
                          ``(i) A model under section 1115A (other than 
                        a health care innovation award).
                          ``(ii) An accountable care organization under 
                        section 1899.
                          ``(iii) A demonstration under section 1866C.
                          ``(iv) A demonstration required by Federal 
                        law.
                  ``(D) Eligible alternative payment model (apm).--
                          ``(i) In general.--The term `eligible 
                        alternative payment model' means, with respect 
                        to a year, an alternative payment model--
                                  ``(I) that requires use of certified 
                                EHR technology (as defined in 
                                subsection (o)(4));
                                  ``(II) that provides for payment for 
                                covered professional services based on 
                                quality measures comparable to measures 
                                under the performance category 
                                described in section 1848(q)(2)(B)(i); 
                                and
                                  ``(III) that satisfies the 
                                requirement described in clause (ii).
                          ``(ii) Additional requirement.--For purposes 
                        of clause (i)(III), the requirement described 
                        in this clause, with respect to a year and an 
                        alternative payment model, is that the 
                        alternative payment model--
                                  ``(I) is one in which one or more 
                                entities bear financial risk for 
                                monetary losses under such model that 
                                are in excess of a nominal amount; or
                                  ``(II) is a medical home expanded 
                                under section 1115A(c).
          ``(3) Limitation.--There shall be no administrative or 
        judicial review under section 1869, 1878, or otherwise, of the 
        following:
                  ``(A) The determination that an eligible professional 
                is a qualifying APM participant under paragraph (2) and 
                the determination that an alternative payment model is 
                an eligible alternative payment model under paragraph 
                (3)(D).
                  ``(B) The determination of the amount of the 5 
                percent payment incentive under paragraph (1)(A), 
                including any estimation as part of such 
                determination.''.
          (2) Coordination conforming amendments.--Section 1833 of the 
        Social Security Act (42 U.S.C. 1395l) is further amended--
                  (A) in subsection (x)(3), by adding at the end the 
                following new sentence: ``The amount of the additional 
                payment for a service under this subsection and 
                subsection (z) shall be determined without regard to 
                any additional payment for the service under subsection 
                (z) and this subsection, respectively.''; and
                  (B) in subsection (y)(3), by adding at the end the 
                following new sentence: ``The amount of the additional 
                payment for a service under this subsection and 
                subsection (z) shall be determined without regard to 
                any additional payment for the service under subsection 
                (z) and this subsection, respectively.''.
          (3) Encouraging development and testing of certain models.--
        Section 1115A(b)(2) of the Social Security Act (42 U.S.C. 
        1315a(b)(2)) is amended--
                  (A) in subparagraph (B), by adding at the end the 
                following new clauses:
                          ``(xxi) Focusing primarily on physicians' 
                        services (as defined in section 1848(j)(3)) 
                        furnished by physicians who are not primary 
                        care practitioners.
                          ``(xxii) Focusing on practices of fewer than 
                        20 professionals.''; and
                  (B) in subparagraph (C)(viii), by striking ``other 
                public sector or private sector payers'' and inserting 
                ``other public sector payers, private sector payers, or 
                Statewide payment models''.
  (f) Study and Report on Fraud Related to Alternative Payment Models 
Under the Medicare Program.--
          (1) Study.--The Secretary of Health and Human Services, in 
        consultation with the Inspector General of the Department of 
        Health and Human Services, shall conduct a study that--
                  (A) examines the applicability of the Federal fraud 
                prevention laws to items and services furnished under 
                title XVIII of the Social Security Act for which 
                payment is made under an alternative payment model (as 
                defined in section 1833(z)(3)(C) of such Act (42 U.S.C. 
                1395l(z)(3)(C)));
                  (B) identifies aspects of such alternative payment 
                models that are vulnerable to fraudulent activity; and
                  (C) examines the implications of waivers to such laws 
                granted in support of such alternative payment models, 
                including under any potential expansion of such models.
          (2) Report.--Not later than 2 years after the date of the 
        enactment of this Act, the Secretary shall submit to Congress a 
        report containing the results of the study conducted under 
        paragraph (1). Such report shall include recommendations for 
        actions to be taken to reduce the vulnerability of such 
        alternative payment models to fraudulent activity. Such report 
        also shall include, as appropriate, recommendations of the 
        Inspector General for changes in Federal fraud prevention laws 
        to reduce such vulnerability.
  (g) Improving Payment Accuracy.--
          (1) Studies and reports of effect of certain information on 
        quality and resource use .--
                  (A) Study using existing medicare data.--
                          (i) Study.--The Secretary of Health and Human 
                        Services (in this subsection referred to as the 
                        ``Secretary'') shall conduct a study that 
                        examines the effect of individuals' 
                        socioeconomic status on quality and resource 
                        use outcome measures for individuals under the 
                        Medicare program (such as to recognize that 
                        less healthy individuals may require more 
                        intensive interventions). The study shall use 
                        information collected on such individuals in 
                        carrying out such program, such as urban and 
                        rural location, eligibility for Medicaid 
                        (recognizing and accounting for varying 
                        Medicaid eligibility across States), and 
                        eligibility for benefits under the supplemental 
                        security income (SSI) program. The Secretary 
                        shall carry out this paragraph acting through 
                        the Assistant Secretary for Planning and 
                        Evaluation.
                          (ii) Report.--Not later than 2 years after 
                        the date of the enactment of this Act, the 
                        Secretary shall submit to Congress a report on 
                        the study conducted under clause (i).
                  (B) Study using other data.--
                          (i) Study.--The Secretary shall conduct a 
                        study that examines the impact of risk factors, 
                        such as those described in section 1848(p)(3) 
                        of the Social Security Act (42 U.S.C. 1395w-
                        4(p)(3)), race, health literacy, limited 
                        English proficiency (LEP), and patient 
                        activation, on quality and resource use outcome 
                        measures under the Medicare program (such as to 
                        recognize that less healthy individuals may 
                        require more intensive interventions). In 
                        conducting such study the Secretary may use 
                        existing Federal data and collect such 
                        additional data as may be necessary to complete 
                        the study.
                          (ii) Report.--Not later than 5 years after 
                        the date of the enactment of this Act, the 
                        Secretary shall submit to Congress a report on 
                        the study conducted under clause (i).
                  (C) Examination of data in conducting studies.--In 
                conducting the studies under subparagraphs (A) and (B), 
                the Secretary shall examine what non-Medicare data 
                sets, such as data from the American Community Survey 
                (ACS), can be useful in conducting the types of studies 
                under such paragraphs and how such data sets that are 
                identified as useful can be coordinated with Medicare 
                administrative data in order to improve the overall 
                data set available to do such studies and for the 
                administration of the Medicare program.
                  (D) Recommendations to account for information in 
                payment adjustment mechanisms.--If the studies 
                conducted under subparagraphs (A) and (B) find a 
                relationship between the factors examined in the 
                studies and quality and resource use outcome measures, 
                then the Secretary shall also provide recommendations 
                for how the Centers for Medicare & Medicaid Services 
                should--
                          (i) obtain access to the necessary data (if 
                        such data is not already being collected) on 
                        such factors, including recommendations on how 
                        to address barriers to the Centers in accessing 
                        such data; and
                          (ii) account for such factors in determining 
                        payment adjustments based on quality and 
                        resource use outcome measures under the 
                        eligible professional value-based performance 
                        incentive program under section 1848(q) of the 
                        Social Security Act (42 U.S.C. 1395w-4(q)) and, 
                        as the Secretary determines appropriate, other 
                        similar provisions of title XVIII of such Act.
                  (E) Funding.--There are hereby appropriated from the 
                Federal Supplemental Medical Insurance Trust Fund to 
                the Secretary to carry out this paragraph $6,000,000, 
                to remain available until expended.
          (2) CMS activities.--
                  (A) Hierarchal condition category (hcc) 
                improvement.--Taking into account the relevant studies 
                conducted and recommendations made in reports under 
                paragraph (1), the Secretary, on an ongoing basis, 
                shall estimate how an individual's health status and 
                other risk factors affect quality and resource use 
                outcome measures and, as feasible, shall incorporate 
                information from quality and resource use outcome 
                measurement (including care episode and patient 
                condition groups) into the eligible professional value-
                based performance incentive program under section 
                1848(q) of the Social Security Act and, as the 
                Secretary determines appropriate, other similar 
                provisions of title XVIII of such Act.
                  (B) Accounting for other factors in payment 
                adjustment mechanisms.--
                          (i) In general.--Taking into account the 
                        studies conducted and recommendations made in 
                        reports under paragraph (1), the Secretary 
                        shall account for identified factors (other 
                        than those applied under subparagraph (A)) with 
                        an effect on quality and resource use outcome 
                        measures when determining payment adjustments 
                        under the eligible professional value-based 
                        performance incentive program under section 
                        1848(q) of the Social Security Act and, as the 
                        Secretary determines appropriate, other similar 
                        provisions of title XVIII of such Act.
                          (ii) Accessing data.--The Secretary shall 
                        collect or otherwise obtain access to the data 
                        necessary to carry out this paragraph through 
                        existing and new data sources.
                          (iii) Periodic analyses.--The Secretary shall 
                        carry out periodic analyses, at least every 3 
                        years, based on the factors referred to in 
                        clause (i) so as to monitor changes in possible 
                        relationships.
                  (C) Funding.--There are hereby appropriated from the 
                Federal Supplemental Medical Insurance Trust Fund to 
                the Secretary to carry out this paragraph $10,000,000, 
                to remain available until expended.
          (3) Strategic plan for accessing race and ethnicity data.--
        Not later than 18 months after the date of the enactment of 
        this Act, the Secretary shall develop and report to Congress on 
        a strategic plan for collecting or otherwise accessing data on 
        race and ethnicity for purposes of carrying out the eligible 
        professional value-based performance incentive program under 
        section 1848(q) of the Social Security Act and, as the 
        Secretary determines appropriate, other similar provisions of 
        title XVIII of such Act.
  (h) Collaborating With the Physician, Practitioner, and Other 
Stakeholder Communities to Improve Resource Use Measurement.--Section 
1848 of the Social Security Act (42 U.S.C. 1395w-4), as amended by 
subsection (c), is further amended by adding at the end the following 
new subsection:
  ``(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 value-based performance incentive program 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 distinct care episode groups and distinct 
                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 60 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 60 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) distinct care episode groups; and
                          ``(ii) distinct 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 distinct care episode 
                                groups and distinct patient condition 
                                groups, which account for at least an 
                                estimated two-thirds of expenditures 
                                under parts A and B; 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 is anticipated or 
                                occurs, and the principal procedures or 
                                services planned or 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 each 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 120 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 60 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 120 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 2016), 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 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 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 60 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, 
                or other appropriate mechanisms.
                  ``(E) Operational list of patient relationship 
                categories and codes.--Not later than 120 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 2016), 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, 2016, 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--
                          ``(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), as the 
                        Secretary determines appropriate.
                  ``(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 
                        amounts 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 amounts (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, or other 
                appropriate mechanisms.
          ``(6) 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).
          ``(7) Administration.--Chapter 35 of title 44, United States 
        Code, shall not apply to this section.
          ``(8) Definitions.--In this section:
                  ``(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
                          ``(ii) beginning January 1, 2017, such other 
                        eligible professionals (as defined in 
                        subsection (k)(3)(B)) as specified by the 
                        Secretary.
          ``(9) Clarification.--The provisions of sections 1890(b)(7) 
        and 1890A shall not apply to this subsection.''.

SEC. 3. PRIORITIES AND FUNDING FOR QUALITY MEASURE DEVELOPMENT.

  Section 1848 of the Social Security Act (42 U.S.C. 1395w-4), as 
amended by subsections (c) and (h) of section 2, is further amended by 
inserting at the end the following new subsection:
  ``(s) Priorities and Funding for Quality Measure Development.--
          ``(1) Plan identifying measure development priorities and 
        timelines.--
                  ``(A) Draft measure development plan.--
                          ``(i) Draft plan.--
                                  ``(I) In general.--Not later than 
                                October 1, 2014, 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.
                                  ``(II) Requirement.--Such plan shall 
                                address how measures used by private 
                                payers and integrated delivery systems 
                                could be incorporated under such 
                                subsection.
                          ``(ii) Consideration.--In developing the 
                        draft plan under subparagraph (A), the 
                        Secretary shall consider--
                                  ``(I) gap analyses conducted by the 
                                entity with a contract under section 
                                1890(a) or other contractors or 
                                entities; and
                                  ``(II) whether measures are 
                                applicable across health care settings.
                          ``(iii) Priorities.--In developing the draft 
                        plan under subparagraph (A), 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.
                          ``(iv) Definition of applicable provisions.--
                        In this subsection, the term `applicable 
                        provisions' means the following provisions:
                                  ``(I) Subsection (q)(2)(B)(i).
                                  ``(II) Section 1833(z)(2)(C).
                  ``(B) Stakeholder input.--The Secretary shall accept 
                through December 1, 2014, comments on the draft plan 
                posted under paragraph (1)(A) from the public, 
                including health care providers, payers, consumers, and 
                other stakeholders.
                  ``(C) Operational measure development plan.--Not 
                later than February 1, 2015, taking into account the 
                comments received under subparagraph (B), the Secretary 
                shall post on the Internet website of the Centers for 
                Medicare & Medicaid Services an operational plan for 
                the development of quality measures for use under 
                subsection (q)(2)(A)(i).
          ``(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 quality measures for application under the 
                applicable provisions. Such entities may include 
                physician specialty societies and other practitioner 
                organizations.
                  ``(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)(A)(iii).
                          ``(ii) Consideration.--In selecting measures 
                        for development under this subsection, the 
                        Secretary shall consider whether such measures 
                        would be electronically specified.
          ``(3) Annual report by the secretary.--
                  ``(A) In general.--Not later than February 1, 2016, 
                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 paragraph (1) shall include the following:
                          ``(i) A description of the Secretary's 
                        efforts to implement this subsection.
                          ``(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) An update on the progress in 
                        developing the types of measures described in 
                        paragraph (1)(A)(iii), including a description 
                        of issues affecting such progress.
                          ``(v) A list of quality topics and concepts 
                        that are being considered for development of 
                        measures and the rationale for the selection of 
                        topics and concepts including their 
                        relationship to gap analyses.
                          ``(vi) 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.
                          ``(vii) Other information the Secretary 
                        determines to be appropriate.
          ``(4) Stakeholder input.--With respect to measures applicable 
        under the applicable provisions, 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)(A)(iii);
                  ``(B) prioritizing quality measure development to 
                address such gaps; and
                  ``(C) other areas related to quality measure 
                development determined appropriate by the Secretary.
          ``(5) 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 2014 
        through 2018. Amounts transferred under this paragraph shall 
        remain available through the end of fiscal year 2021.''.

SEC. 4. ENCOURAGING CARE MANAGEMENT FOR INDIVIDUALS WITH CHRONIC CARE 
                    NEEDS.

  Section 1848(b) of the Social Security Act (42 U.S.C. 1395w-4(b)) is 
amended by adding at the end the following new paragraph:
          ``(8) Encouraging care management for individuals with 
        chronic care needs.--
                  ``(A) In general.--In order to encourage the 
                management of care by an applicable provider (as 
                defined in subparagraph (B)) for individuals with 
                chronic care needs the Secretary shall--
                          ``(i) establish one or more HCPCS codes for 
                        chronic care management services for such 
                        individuals; and
                          ``(ii) subject to subparagraph (D), make 
                        payment (as the Secretary determines to be 
                        appropriate) under this section for such 
                        management services furnished on or after 
                        January 1, 2015, by an applicable provider.
                  ``(B) Applicable provider defined.--For purposes of 
                this paragraph, the term `applicable provider' means a 
                physician (as defined in section 1861(r)(1)), physician 
                assistant or nurse practitioner (as defined in section 
                1861(aa)(5)(A)), or clinical nurse specialist (as 
                defined in section 1861(aa)(5)(B)) who furnishes 
                services as part of a patient-centered medical home or 
                a comparable specialty practice that--
                          ``(i) is recognized as such a medical home or 
                        comparable specialty practice by an 
                        organization that is recognized by the 
                        Secretary for purposes of such recognition as 
                        such a medical home or practice; or
                          ``(ii) meets such other comparable 
                        qualifications as the Secretary determines to 
                        be appropriate.
                  ``(C) Budget neutrality.--The budget neutrality 
                provision under subsection (c)(2)(B)(ii)(II) shall 
                apply in establishing the payment under subparagraph 
                (A)(ii).
                  ``(D) 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 (such as in the case of 
                        hospice care or home health 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.''.

SEC. 5. ENSURING ACCURATE VALUATION OF SERVICES UNDER THE PHYSICIAN FEE 
                    SCHEDULE.

  (a) Authority To Collect and Use Information on Physicians' Services 
in the Determination of Relative Values.--
          (1) In general.--Section 1848(c)(2) of the Social Security 
        Act (42 U.S.C. 1395w-4(c)(2)) is amended by adding at the end 
        the following new subparagraph:
                  ``(M) Authority to collect and use information on 
                physicians' services in the determination of relative 
                values.--
                          ``(i) Collection of information.--
                        Notwithstanding any other provision of law, the 
                        Secretary may collect or obtain information on 
                        the resources directly or indirectly related to 
                        furnishing services for which payment is made 
                        under the fee schedule established under 
                        subsection (b). Such information may be 
                        collected or obtained from any eligible 
                        professional or any other source.
                          ``(ii) Use of information.--Notwithstanding 
                        any other provision of law, subject to clause 
                        (v), the Secretary may (as the Secretary 
                        determines appropriate) use information 
                        collected or obtained pursuant to clause (i) in 
                        the determination of relative values for 
                        services under this section.
                          ``(iii) Types of information.--The types of 
                        information described in clauses (i) and (ii) 
                        may, at the Secretary's discretion, include any 
                        or all of the following:
                                  ``(I) Time involved in furnishing 
                                services.
                                  ``(II) Amounts and types of practice 
                                expense inputs involved with furnishing 
                                services.
                                  ``(III) Prices (net of any discounts) 
                                for practice expense inputs, which may 
                                include paid invoice prices or other 
                                documentation or records.
                                  ``(IV) Overhead and accounting 
                                information for practices of physicians 
                                and other suppliers.
                                  ``(V) Any other element that would 
                                improve the valuation of services under 
                                this section.
                          ``(iv) Information collection mechanisms.--
                        Information may be collected or obtained 
                        pursuant to this subparagraph from any or all 
                        of the following:
                                  ``(I) Surveys of physicians, other 
                                suppliers, providers of services, 
                                manufacturers, and vendors.
                                  ``(II) Surgical logs, billing 
                                systems, or other practice or facility 
                                records.
                                  ``(III) Electronic health records.
                                  ``(IV) Any other mechanism determined 
                                appropriate by the Secretary.
                          ``(v) Transparency of use of information.--
                                  ``(I) In general.--Subject to 
                                subclauses (II) and (III), if the 
                                Secretary uses information collected or 
                                obtained under this subparagraph in the 
                                determination of relative values under 
                                this subsection, the Secretary shall 
                                disclose the information source and 
                                discuss the use of such information in 
                                such determination of relative values 
                                through notice and comment rulemaking.
                                  ``(II) Thresholds for use.--The 
                                Secretary may establish thresholds in 
                                order to use such information, 
                                including the exclusion of information 
                                collected or obtained from eligible 
                                professionals who use very high 
                                resources (as determined by the 
                                Secretary) in furnishing a service.
                                  ``(III) Disclosure of information.--
                                The Secretary shall make aggregate 
                                information available under this 
                                subparagraph but shall not disclose 
                                information in a form or manner that 
                                identifies an eligible professional or 
                                a group practice, or information 
                                collected or obtained pursuant to a 
                                nondisclosure agreement.
                          ``(vi) Incentive to participate.--The 
                        Secretary may provide for such payments under 
                        this part to an eligible professional that 
                        submits such solicited information under this 
                        subparagraph as the Secretary determines 
                        appropriate in order to compensate such 
                        eligible professional for such submission. Such 
                        payments shall be provided in a form and manner 
                        specified by the Secretary.
                          ``(vii) Administration.--Chapter 35 of title 
                        44, United States Code, shall not apply to 
                        information collected or obtained under this 
                        subparagraph.
                          ``(viii) Definition of eligible 
                        professional.--In this subparagraph, the term 
                        `eligible professional' has the meaning given 
                        such term in subsection (k)(3)(B).
                          ``(ix) Funding.--For purposes of carrying out 
                        this subparagraph, in addition to funds 
                        otherwise appropriated, the Secretary shall 
                        provide for the transfer, from the Federal 
                        Supplementary Medical Insurance Trust Fund 
                        under section 1841, of $2,000,000 to the 
                        Centers for Medicare & Medicaid Services 
                        Program Management Account for each fiscal year 
                        beginning with fiscal year 2014. Amounts 
                        transferred under the preceding sentence for a 
                        fiscal year shall be available until 
                        expended.''.
          (2) Limitation on review.--Section 1848(i)(1) of the Social 
        Security Act (42 U.S.C. 1395w-4(i)(1)) is amended--
                  (A) in subparagraph (D), by striking ``and'' at the 
                end;
                  (B) in subparagraph (E), by striking the period at 
                the end and inserting ``, and''; and
                  (C) by adding at the end the following new 
                subparagraph:
                  ``(F) the collection and use of information in the 
                determination of relative values under subsection 
                (c)(2)(M).''.
  (b) Authority for Alternative Approaches To Establishing Practice 
Expense Relative Values.--Section 1848(c)(2) of the Social Security Act 
(42 U.S.C. 1395w-4(c)(2)), as amended by subsection (a), is amended by 
adding at the end the following new subparagraph:
                  ``(N) Authority for alternative approaches to 
                establishing practice expense relative values.--The 
                Secretary may establish or adjust practice expense 
                relative values under this subsection using cost, 
                charge, or other data from suppliers or providers of 
                services, including information collected or obtained 
                under subparagraph (M).''.
  (c) Revised and Expanded Identification of Potentially Misvalued 
Codes.--Section 1848(c)(2)(K)(ii) of the Social Security Act (42 U.S.C. 
1395w-4(c)(2)(K)(ii)) is amended to read as follows:
                          ``(ii) Identification of potentially 
                        misvalued codes.--For purposes of identifying 
                        potentially misvalued codes pursuant to clause 
                        (i)(I), the Secretary shall examine codes (and 
                        families of codes as appropriate) based on any 
                        or all of the following criteria:
                                  ``(I) Codes that have experienced the 
                                fastest growth.
                                  ``(II) Codes that have experienced 
                                substantial changes in practice 
                                expenses.
                                  ``(III) Codes that describe new 
                                technologies or services within an 
                                appropriate time period (such as 3 
                                years) after the relative values are 
                                initially established for such codes.
                                  ``(IV) Codes which are multiple codes 
                                that are frequently billed in 
                                conjunction with furnishing a single 
                                service.
                                  ``(V) Codes with low relative values, 
                                particularly those that are often 
                                billed multiple times for a single 
                                treatment.
                                  ``(VI) Codes that have not been 
                                subject to review since implementation 
                                of the fee schedule.
                                  ``(VII) Codes that account for the 
                                majority of spending under the 
                                physician fee schedule.
                                  ``(VIII) Codes for services that have 
                                experienced a substantial change in the 
                                hospital length of stay or procedure 
                                time.
                                  ``(IX) Codes for which there may be a 
                                change in the typical site of service 
                                since the code was last valued.
                                  ``(X) Codes for which there is a 
                                significant difference in payment for 
                                the same service between different 
                                sites of service.
                                  ``(XI) Codes for which there may be 
                                anomalies in relative values within a 
                                family of codes.
                                  ``(XII) Codes for services where 
                                there may be efficiencies when a 
                                service is furnished at the same time 
                                as other services.
                                  ``(XIII) Codes with high intra-
                                service work per unit of time.
                                  ``(XIV) Codes with high practice 
                                expense relative value units.
                                  ``(XV) Codes with high cost supplies.
                                  ``(XVI) Codes as determined 
                                appropriate by the Secretary.''.
  (d) Target for Relative Value Adjustments for Misvalued Services.--
          (1) In general.--Section 1848(c)(2) of the Social Security 
        Act (42 U.S.C. 1395w-4(c)(2)), as amended by subsections (a) 
        and (b), is amended by adding at the end the following new 
        subparagraph:
                  ``(O) Target for relative value adjustments for 
                misvalued services.--With respect to fee schedules 
                established for each of 2015 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 
                        2015.
                          ``(iv) Target recapture amount.--For purposes 
                        of clause (iii), the target recapture amount 
                        is, with respect to a year, an amount equal to 
                        the difference between--
                                  ``(I) the target for the year; and
                                  ``(II) the estimated net reduction in 
                                expenditures determined under clause 
                                (i) for the year.
                          ``(v) Target.--For purposes of this 
                        subparagraph, with respect to a year, the 
                        target is calculated as 0.5 percent of the 
                        estimated amount of expenditures under the fee 
                        schedule under this section for the year.''.
          (2) Conforming amendment.--Section 1848(c)(2)(B)(v) of the 
        Social Security Act (42 U.S.C. 1395w-4(c)(2)(B)(v)) is amended 
        by adding at the end the following new subclause:
                                  ``(VIII) Reductions for misvalued 
                                services if target not met.--Effective 
                                for fee schedules beginning with 2015, 
                                reduced expenditures attributable to 
                                the application of the target recapture 
                                amount described in subparagraph 
                                (O)(iii).''.
  (e) Phase-in of Significant Relative Value Unit (RVU) Reductions.--
          (1) In general.--Section 1848(c) of the Social Security Act 
        (42 U.S.C. 1395w-4(c)) is amended by adding at the end the 
        following new paragraph:
          ``(7) Phase-in of significant relative value unit (rvu) 
        reductions.--Effective for fee schedules established beginning 
        with 2015, if the total relative value units for a service for 
        a year would otherwise be decreased by an estimated amount 
        equal to or greater than 20 percent as compared to the total 
        relative value units for the previous year, the applicable 
        adjustments in work, practice expense, and malpractice relative 
        value units shall be phased-in over a 2-year period.''.
          (2) Conforming amendments.--Section 1848(c)(2) of the Social 
        Security Act (42 U.S.C. 1395w-4(c)(2)) is amended--
                  (A) in subparagraph (B)(ii)(I), by striking 
                ``subclause (II)'' and inserting ``subclause (II) and 
                paragraph (7)''; and
                  (B) in subparagraph (K)(iii)(VI)--
                          (i) by striking ``provisions of subparagraph 
                        (B)(ii)(II)'' and inserting ``provisions of 
                        subparagraph (B)(ii)(II) and paragraph (7)''; 
                        and
                          (ii) by striking ``under subparagraph 
                        (B)(ii)(II)'' and inserting ``under 
                        subparagraph (B)(ii)(I)''.
  (f) Authority To Smooth Relative Values Within Groups of Services.--
Section 1848(c)(2)(C) of the Social Security Act (42 U.S.C. 1395w-
4(c)(2)(C)) is amended--
          (1) in each of clauses (i) and (iii), by striking ``the 
        service'' and inserting ``the service or group of services'' 
        each place it appears; and
          (2) in the first sentence of clause (ii), by inserting ``or 
        group of services'' before the period.
  (g) GAO Study and Report on Relative Value Scale Update Committee.--
          (1) Study.--The Comptroller General of the United States (in 
        this subsection referred to as the ``Comptroller General'') 
        shall conduct a study of the processes used by the Relative 
        Value Scale Update Committee (RUC) to provide recommendations 
        to the Secretary of Health and Human Services regarding 
        relative values for specific services under the Medicare 
        physician fee schedule under section 1848 of the Social 
        Security Act (42 U.S.C. 1395w-4).
          (2) Report.--Not later than 1 year after the date of the 
        enactment of this Act, the Comptroller General shall submit to 
        Congress a report containing the results of the study conducted 
        under paragraph (1).
  (h) Adjustment to Medicare Payment Localities.--
          (1) In general.--Section 1848(e) of the Social Security Act 
        (42 U.S.C. 1395w-4(e)) is amended by adding at the end the 
        following new paragraph:
          ``(6) Use of msas as fee schedule areas in california.--
                  ``(A) In general.--Subject to the succeeding 
                provisions of this paragraph and notwithstanding the 
                previous provisions of this subsection, for services 
                furnished on or after January 1, 2017, the fee schedule 
                areas used for payment under this section applicable to 
                California shall be the following:
                          ``(i) Each Metropolitan Statistical Area 
                        (each in this paragraph referred to as an 
                        `MSA'), as defined by the Director of the 
                        Office of Management and Budget as of December 
                        31 of the previous year, shall be a fee 
                        schedule area.
                          ``(ii) All areas not included in an MSA shall 
                        be treated as a single rest-of-State fee 
                        schedule area.
                  ``(B) Transition for msas previously in rest-of-state 
                payment locality or in locality 3.--
                          ``(i) In general.--For services furnished in 
                        California during a year beginning with 2017 
                        and ending with 2021 in an MSA in a transition 
                        area (as defined in subparagraph (D)), subject 
                        to subparagraph (C), the geographic index 
                        values to be applied under this subsection for 
                        such year shall be equal to the sum of the 
                        following:
                                  ``(I) Current law component.--The old 
                                weighting factor (described in clause 
                                (ii)) for such year multiplied by the 
                                geographic index values under this 
                                subsection for the fee schedule area 
                                that included such MSA that would have 
                                applied in such area (as estimated by 
                                the Secretary) if this paragraph did 
                                not apply.
                                  ``(II) MSA-based component.--The MSA-
                                based weighting factor (described in 
                                clause (iii)) for such year multiplied 
                                by the geographic index values computed 
                                for the fee schedule area under 
                                subparagraph (A) for the year 
                                (determined without regard to this 
                                subparagraph).
                          ``(ii) Old weighting factor.--The old 
                        weighting factor described in this clause--
                                  ``(I) for 2017, is \5/6\; and
                                  ``(II) for each succeeding year, is 
                                the old weighting factor described in 
                                this clause for the previous year minus 
                                \1/6\.
                          ``(iii) MSA-based weighting factor.--The MSA-
                        based weighting factor described in this clause 
                        for a year is 1 minus the old weighting factor 
                        under clause (ii) for that year.
                  ``(C) Hold harmless.--For services furnished in a 
                transition area in California during a year beginning 
                with 2017, the geographic index values to be applied 
                under this subsection for such year shall not be less 
                than the corresponding geographic index values that 
                would have applied in such transition area (as 
                estimated by the Secretary) if this paragraph did not 
                apply.
                  ``(D) Transition area defined.--In this paragraph, 
                the term `transition area' means each of the following 
                fee schedule areas for 2013:
                          ``(i) The rest-of-State payment locality.
                          ``(ii) Payment locality 3.
                  ``(E) References to fee schedule areas.--Effective 
                for services furnished on or after January 1, 2017, for 
                California, any reference in this section to a fee 
                schedule area shall be deemed a reference to a fee 
                schedule area established in accordance with this 
                paragraph.''.
          (2) Conforming amendment to definition of fee schedule 
        area.--Section 1848(j)(2) of the Social Security Act (42 U.S.C. 
        1395w-4(j)(2)) is amended by striking ``The term'' and 
        inserting ``Except as provided in subsection (e)(6)(D), the 
        term''.

SEC. 6. PROMOTING EVIDENCE-BASED CARE.

  (a) Recognizing Appropriate Use Criteria for Certain Imaging 
Services.--
          (1) In general.--Section 1834 of the Social Security Act (42 
        U.S.C. 1395m) is amended by adding at the end the following new 
        subsection:
  ``(p) Recognizing Appropriate Use Criteria for Certain Imaging 
Services.--
          ``(1) Program established.--
                  ``(A) In general.--The Secretary shall establish a 
                program to promote the use of appropriate use criteria 
                (as defined in subparagraph (B)) for applicable imaging 
                services (as defined in subparagraph (C)) furnished in 
                an applicable setting (as defined in subparagraph (D)) 
                by ordering professionals and furnishing professionals 
                (as defined in subparagraphs (E) and (F), 
                respectively).
                  ``(B) Appropriate use criteria defined.--In this 
                subsection, the term `appropriate use criteria' means 
                criteria to assist ordering professionals and 
                furnishing professionals in making the most appropriate 
                treatment decision for a specific clinical condition. 
                To the extent feasible, such criteria shall be 
                evidence-based.
                  ``(C) Applicable imaging service defined.--In this 
                subsection, the term `applicable imaging service' means 
                an advanced diagnostic imaging service (as defined in 
                subsection (e)(1)(B)) for which the Secretary 
                determines--
                          ``(i) one or more applicable appropriate use 
                        criteria specified under paragraph (2) apply;
                          ``(ii) there are one or more qualified 
                        clinical decision support mechanisms listed 
                        under paragraph (3)(C); and
                          ``(iii) one or more of such mechanisms is 
                        available free of charge.
                  ``(D) Applicable setting defined.--In this 
                subsection, the term `applicable setting' means a 
                physician's office, a hospital outpatient department 
                (including an emergency department), an ambulatory 
                surgical center, and any other outpatient setting 
                determined appropriate by the Secretary.
                  ``(E) Ordering professional defined.--In this 
                subsection, the term `ordering professional' means a 
                physician (as defined in section 1861(r)) or a 
                practitioner described in section 1842(b)(18)(C) who 
                orders an applicable imaging service for an individual.
                  ``(F) Furnishing professional defined.--In this 
                subsection, the term `furnishing professional' means a 
                physician (as defined in section 1861(r)) or a 
                practitioner described in section 1842(b)(18)(C) who 
                furnishes an applicable imaging service for an 
                individual.
          ``(2) Establishment of applicable appropriate use criteria.--
                  ``(A) In general.--Not later than November 15, 2015, 
                the Secretary shall through rulemaking, and in 
                consultation with physicians, practitioners, and other 
                stakeholders, specify applicable appropriate use 
                criteria for applicable imaging services from among 
                appropriate use criteria developed or endorsed by 
                national professional medical specialty societies or 
                other entities.
                  ``(B) Considerations.--In specifying applicable 
                appropriate use criteria under subparagraph (A), the 
                Secretary shall take into account whether the 
                criteria--
                          ``(i) have stakeholder consensus;
                          ``(ii) have been determined to be 
                        scientifically valid and are evidence based; 
                        and
                          ``(iii) are in the public domain.
                  ``(C) Revisions.--The Secretary shall periodically 
                update and revise (as appropriate) such specification 
                of applicable appropriate use criteria.
                  ``(D) Treatment of multiple applicable appropriate 
                use criteria.--In the case where the Secretary 
                determines that more than one appropriate use criteria 
                applies with respect to an applicable imaging service, 
                the Secretary shall specify one or more applicable 
                appropriate use criteria under this paragraph for the 
                service.
          ``(3) Mechanisms for consultation with applicable appropriate 
        use criteria.--
                  ``(A) Identification of mechanisms to consult with 
                applicable appropriate use criteria.--
                          ``(i) In general.--The Secretary shall 
                        specify one or more qualified clinical decision 
                        support mechanisms that could be used by 
                        ordering professionals to consult with 
                        applicable appropriate use criteria for 
                        applicable imaging services.
                          ``(ii) Consultation.--The Secretary shall 
                        consult with physicians, practitioners, and 
                        other stakeholders in specifying mechanisms 
                        under this paragraph.
                          ``(iii) Inclusion of certain mechanisms.--
                        Mechanisms specified under this paragraph may 
                        include any or all of the following that meet 
                        the requirements described in subparagraph 
                        (B)(ii):
                                  ``(I) Use of clinical decision 
                                support modules in certified EHR 
                                technology (as defined in section 
                                1848(o)(4)).
                                  ``(II) Use of private sector clinical 
                                decision support mechanisms that are 
                                independent from certified EHR 
                                technology, which may include use of 
                                clinical decision support mechanisms 
                                available from medical specialty 
                                organizations.
                                  ``(III) Use of a clinical decision 
                                support mechanism established by the 
                                Secretary.
                  ``(B) Qualified clinical decision support 
                mechanisms.--
                          ``(i) In general.--For purposes of this 
                        subsection, a qualified clinical decision 
                        support mechanism is a mechanism that the 
                        Secretary determines meets the requirements 
                        described in clause (ii).
                          ``(ii) Requirements.--The requirements 
                        described in this clause are the following:
                                  ``(I) The mechanism makes available 
                                to the ordering professional applicable 
                                appropriate use criteria specified 
                                under paragraph (2) and the supporting 
                                documentation for the applicable 
                                imaging service ordered.
                                  ``(II) In the case where there are 
                                more than one applicable appropriate 
                                use criteria specified under such 
                                paragraph for an applicable imaging 
                                service, the mechanism indicates the 
                                criteria that it uses for the service.
                                  ``(III) The mechanism determines the 
                                extent to which an applicable imaging 
                                service ordered is consistent with the 
                                applicable appropriate use criteria so 
                                specified.
                                  ``(IV) The mechanism generates and 
                                provides to the ordering professional a 
                                certification or documentation that 
                                documents that the qualified clinical 
                                decision support mechanism was 
                                consulted by the ordering professional.
                                  ``(V) The mechanism is updated on a 
                                timely basis to reflect revisions to 
                                the specification of applicable 
                                appropriate use criteria under such 
                                paragraph.
                                  ``(VI) The mechanism meets privacy 
                                and security standards under applicable 
                                provisions of law.
                                  ``(VII) The mechanism performs such 
                                other functions as specified by the 
                                Secretary, which may include a 
                                requirement to provide aggregate 
                                feedback to the ordering professional.
                  ``(C) List of mechanisms for consultation with 
                applicable appropriate use criteria.--
                          ``(i) Initial list.--Not later than April 1, 
                        2016, the Secretary shall publish a list of 
                        mechanisms specified under this paragraph.
                          ``(ii) Periodic updating of list.--The 
                        Secretary shall periodically update the list of 
                        qualified clinical decision support mechanisms 
                        specified under this paragraph.
          ``(4) Consultation with applicable appropriate use 
        criteria.--
                  ``(A) Consultation by ordering professional.--
                Beginning with January 1, 2017, subject to subparagraph 
                (C), with respect to an applicable imaging service 
                ordered by an ordering professional that would be 
                furnished in an applicable setting and paid for under 
                an applicable payment system (as defined in 
                subparagraph (D)), an ordering professional shall--
                          ``(i) consult with a qualified decision 
                        support mechanism listed under paragraph 
                        (3)(C); and
                          ``(ii) provide to the furnishing professional 
                        the information described in clauses (i) 
                        through (iii) of subparagraph (B).
                  ``(B) Reporting by furnishing professional.--
                Beginning with January 1, 2017, subject to subparagraph 
                (C), with respect to an applicable imaging service 
                furnished in an applicable setting and paid for under 
                an applicable payment system (as defined in 
                subparagraph (D)), payment for such service may only be 
                made if the claim for the service includes the 
                following:
                          ``(i) Information about which qualified 
                        clinical decision support mechanism was 
                        consulted by the ordering professional for the 
                        service.
                          ``(ii) Information regarding--
                                  ``(I) whether the service ordered 
                                would adhere to the applicable 
                                appropriate use criteria specified 
                                under paragraph (2);
                                  ``(II) whether the service ordered 
                                would not adhere to such criteria; or
                                  ``(III) whether such criteria was not 
                                applicable to the service ordered.
                          ``(iii) The national provider identifier of 
                        the ordering professional (if different from 
                        the furnishing professional).
                  ``(C) Exceptions.--The provisions of subparagraphs 
                (A) and (B) and paragraph (6)(A) shall not apply to the 
                following:
                          ``(i) Emergency services.--An applicable 
                        imaging service ordered for an individual with 
                        an emergency medical condition (as defined in 
                        section 1867(e)(1)).
                          ``(ii) Inpatient services.--An applicable 
                        imaging service ordered for an inpatient and 
                        for which payment is made under part A.
                          ``(iii) Alternative payment models.--An 
                        applicable imaging service ordered by an 
                        ordering professional with respect to an 
                        individual attributed to an alternative payment 
                        model (as defined in section 1833(z)(3)(C)).
                          ``(iv) Significant hardship.--An applicable 
                        imaging service ordered by an ordering 
                        professional who the Secretary may, on a case-
                        by-case basis, exempt from the application of 
                        such provisions if the Secretary determines, 
                        subject to annual renewal, that consultation 
                        with applicable appropriate use criteria would 
                        result in a significant hardship, such as in 
                        the case of a professional who practices in a 
                        rural area without sufficient Internet access.
                  ``(D) Applicable payment system defined.--In this 
                subsection, the term `applicable payment system' means 
                the following:
                          ``(i) The physician fee schedule established 
                        under section 1848(b).
                          ``(ii) The prospective payment system for 
                        hospital outpatient department services under 
                        section 1833(t).
                          ``(iii) The ambulatory surgical center 
                        payment systems under section 1833(i).
          ``(5) Identification of outlier ordering professionals.--
                  ``(A) In general.--With respect to applicable imaging 
                services furnished beginning with 2017, the Secretary 
                shall determine, on a periodic basis (which may be 
                annually), ordering professionals who are outlier 
                ordering professionals.
                  ``(B) Outlier ordering professionals.--The 
                determination of an outlier ordering professional 
                shall--
                          ``(i) be based on low adherence to applicable 
                        appropriate use criteria specified under 
                        paragraph (2), which may be based on comparison 
                        to other ordering professionals; and
                          ``(ii) include data for ordering 
                        professionals for whom prior authorization 
                        under paragraph (6)(A) applies.
                  ``(C) Use of two years of data.--The Secretary shall 
                use two years of data to identify outlier ordering 
                professionals under this paragraph.
                  ``(D) Consultation with stakeholders.--The Secretary 
                shall consult with physicians, practitioners and other 
                stakeholders in developing methods to identify outlier 
                ordering professionals under this paragraph.
          ``(6) Prior authorization for ordering professionals who are 
        outliers.--
                  ``(A) In general.--Beginning January 1, 2020, subject 
                to paragraph (4)(C), with respect to services furnished 
                during a year, the Secretary shall, for a period 
                determined appropriate by the Secretary, apply prior 
                authorization for applicable imaging services that are 
                ordered by an outlier ordering professional identified 
                under paragraph (5).
                  ``(B) Funding.--For purposes of carrying out this 
                paragraph, the Secretary shall provide for the 
                transfer, from the Federal Supplementary Medical 
                Insurance Trust Fund under section 1841, of $5,000,000 
                to the Centers for Medicare & Medicaid Services Program 
                Management Account for each of fiscal years 2019 
                through 2021. Amounts transferred under the preceding 
                sentence shall remain available until expended.''.
          (2) Conforming amendment.--Section 1833(t)(16) of the Social 
        Security Act (42 U.S.C. 1395l(t)(16)) is amended by adding at 
        the end the following new subparagraph:
                  ``(E) Application of appropriate use criteria for 
                certain imaging services.--For provisions relating to 
                the application of appropriate use criteria for certain 
                imaging services, see section 1834(p).''.
  (b) Establishment of Appropriate Use Program for Other Part B 
Services.--Section 1834 of the Social Security Act (42 U.S.C. 1395m), 
as amended by subsection (a), is amended by adding at the end the 
following new subsection:
  ``(q) Establishment of Appropriate Use Program for Other Part B 
Services.--
          ``(1) Establishment.--
                  ``(A) In general.--The Secretary may establish an 
                appropriate use program for services under this part 
                (other than applicable imaging services under 
                subsection (p)) using a process similar to the process 
                under such subsection.
                  ``(B) Requirements.--In determining whether to 
                establish a program under subparagraph (A), the 
                Secretary shall take into consideration--
                          ``(i) the implementation of appropriate use 
                        criteria for applicable imaging services under 
                        subsection (p); and
                          ``(ii) the report under paragraph (2).
                  ``(C) Input from stakeholders in advance of 
                rulemaking.--Before issuing a notice of proposed 
                rulemaking to establish a program under subparagraph 
                (A), the Secretary shall issue an advance notice of 
                proposed rulemaking.
          ``(2) Report on experience of imaging appropriate use 
        criteria program.--Not later than 18 months after the date of 
        the enactment of this subsection, the Comptroller General of 
        the United States shall submit to Congress a report that 
        includes a description of the extent to which appropriate use 
        criteria could be used for other services under this part, such 
        as radiation therapy and clinical diagnostic laboratory 
        services.''.

SEC. 7. EMPOWERING BENEFICIARY CHOICES THROUGH ACCESS TO INFORMATION ON 
                    PHYSICIANS' SERVICES.

  (a) Transferring Freestanding Physician Compare Provision to the 
Social Security Act.--
          (1) In general.--Section 10331 of Public Law 111-148 is 
        transferred and redesignated as subsection (t) of section 1848 
        of the Social Security Act (42 U.S.C. 1395w-4), as amended by 
        subsections (c) and (h) of section 2 and by section 3.
          (2) Conforming redesignations.--Section 1848(t) of the Social 
        Security Act (42 U.S.C. 1395w-4(t)), as transferred and 
        redesignated by paragraph (1), is further amended--
                  (A) by striking the subsection heading and inserting 
                the following new subsection heading: ``Public 
                Reporting of Performance and Other Information on 
                Physician Compare.--'';
                  (B) by redesignating subsections (a) through (i) as 
                paragraphs (1) through (9), respectively, and indenting 
                appropriately;
                  (C) in paragraph (1), as redesignated by subparagraph 
                (B)--
                          (i) by redesignating paragraphs (1) and (2) 
                        as subparagraphs (A) and (B), respectively, and 
                        indenting appropriately;
                          (ii) in subparagraph (B), as redesignated by 
                        clause (i), by redesignating subparagraphs (A) 
                        through (G) as clauses (i) through (vii), 
                        respectively, and indenting appropriately;
                  (D) in paragraph (2), as redesignated by subparagraph 
                (B), by redesignating paragraphs (1) through (7) as 
                subparagraphs (A) through (G), respectively, and 
                indenting appropriately; and
                  (E) in paragraph (9), as redesignated by subparagraph 
                (B), by redesignating paragraphs (1) through (4) as 
                subparagraphs (A) through (D), respectively, and 
                indenting appropriately.
          (3) Conforming amendments.--Section 1848(t) of the Social 
        Security Act (42 U.S.C. 1395w-4(t)), as amended by paragraph 
        (2), is further amended--
                  (A) in paragraph (1)--
                          (i) in subparagraph (A)--
                                  (I) by striking ``the Medicare 
                                program under section 1866(j) of the 
                                Social Security Act (42 U.S.C. 
                                1395cc(j))'' and inserting ``the 
                                program under this title under section 
                                1866(j)''; and
                                  (II) by striking ``of such Act (42 
                                U.S.C. 1395w-4)''; and
                          (ii) in subparagraph (B), in the matter 
                        preceding clause (i)--
                                  (I) by striking ``subsection (c)'' 
                                and inserting ``paragraph (3)'';
                                  (II) by striking ``the Medicare 
                                program under such section 1866(j)'' 
                                and inserting ``the program under this 
                                title under section 1866(j)''; and
                                  (III) by striking ``this section'' 
                                and inserting ``this subsection'';
                  (B) in paragraph (2)--
                          (i) in the matter preceding subparagraph (A), 
                        by striking ``subsection (a)(2)'' and inserting 
                        ``paragraph (1)(B)'';
                          (ii) in subparagraph (D), by striking ``the 
                        Medicare program'' and inserting ``the program 
                        under this title''; and
                          (iii) in each of subparagraphs (F) and (G), 
                        by striking ``this section'' and inserting 
                        ``this subsection'';
                  (C) in paragraph (3), by striking ``this section'' 
                and inserting ``this subsection'';
                  (D) in paragraph (4)--
                          (i) by striking ``of the Social Security Act, 
                        as added by section 3014 of this Act''; and
                          (ii) by striking ``this section'' and 
                        inserting ``this subsection'';
                  (E) in paragraph (5)--
                          (i) by striking ``this subsection (a)(2)'' 
                        and inserting ``paragraph (1)(B)''; and
                          (ii) by striking ``(Public Law 110-275)'';
                  (F) in paragraph (6), by striking ``subsection 
                (a)(1)'' and inserting ``paragraph (1)(A)'';
                  (G) in paragraph (7)--
                          (i) by striking ``subsection (f)'' and 
                        inserting ``paragraph (6)''; and
                          (ii) by striking ``title XVIII of the Social 
                        Security Act'' and inserting ``this title'';
                  (H) in paragraph (8)--
                          (i) by striking ``subparagraphs (A) through 
                        (G) of subsection (a)(2)'' and inserting 
                        ``clauses (i) through (vii) of paragraph 
                        (1)(B)'';
                          (ii) by striking ``title XVIII of the Social 
                        Security Act'' and inserting ``this title''; 
                        and
                          (iii) by striking ``such title'' and 
                        inserting ``this title''; and
                  (I) in paragraph (9)--
                          (i) in the matter preceding subparagraph (A), 
                        by striking ``this section'' and inserting 
                        ``this subsection'';
                          (ii) in subparagraph (A), by striking ``of 
                        the Social Security Act (42 U.S.C. 1395w-4)'';
                          (iii) in subparagraph (B), by striking ``of 
                        such Act (42 U.S.C. 1395x(r))'';
                          (iv) in subparagraph (C), by striking 
                        ``subsection (a)(1)'' and inserting ``paragraph 
                        (1)(A)''; and
                          (v) by striking subparagraph (D).
  (b) Public Availability of Medicare Data.--Section 1848(t) of the 
Social Security Act (42 U.S.C. 1395w-4(t)), as amended by subsection 
(a), is further amended--
          (1) by redesignating paragraph (9) as paragraph (10);
          (2) by inserting after paragraph (8) the following new 
        paragraph:
          ``(9) Public availability of eligible professional claims 
        data.--
                  ``(A) In general.--The Secretary shall make publicly 
                available on Physician Compare the information 
                described in subparagraph (B) with respect to eligible 
                professionals.
                  ``(B) Information described.--The following 
                information, with respect to an eligible professional, 
                is described in this subparagraph:
                          ``(i) Information on the number of services 
                        furnished by the eligible professional, which 
                        may include information on the most frequent 
                        services furnished or groupings of services.
                          ``(ii) Information on submitted charges and 
                        payments for services under this part.
                          ``(iii) A unique identifier for the eligible 
                        professional that is available to the public, 
                        such as a national provider identifier.
                  ``(C) Searchability.--The information made available 
                under this paragraph shall be searchable by at least 
                the following:
                          ``(i) The specialty or type of the eligible 
                        professional.
                          ``(ii) Characteristics of the services 
                        furnished, such as volume or groupings of 
                        services.
                          ``(iii) The location of the eligible 
                        professional.
                  ``(D) 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.
                  ``(E) Implementation.--
                          ``(i) Initial implementation.--Physician 
                        Compare shall include the information described 
                        in subparagraph (B)--
                                  ``(I) with respect to physicians, by 
                                not later than July 1, 2015; and
                                  ``(II) with respect to other eligible 
                                professionals, by not later than July 
                                1, 2016.
                          ``(ii) Annual updating.--The information made 
                        available under this paragraph shall be updated 
                        on Physician Compare not less frequently than 
                        on an annual basis.
                  ``(F) Opportunity to review and submit corrections.--
                The Secretary shall provide for an opportunity for an 
                eligible professional to review, and submit corrections 
                for, the information to be made public with respect to 
                the eligible professional under this paragraph prior to 
                such information being made public.''; and
          (3) in paragraph (10)(C), as redesignated by paragraph (1), 
        by inserting ``(or a successor website)'' before the period at 
        the end.

SEC. 8. EXPANDING CLAIMS DATA AVAILABILITY TO IMPROVE CARE.

  (a) Expansion of Uses of Claims Data by Qualified Entities.--Section 
1874(e) of the Social Security Act (42 U.S.C. 1395kk(e)) is amended by 
adding at the end the following new paragraph:
          ``(5) Expansion of uses of claims data by qualified 
        entities.--
                  ``(A) Expansion.--To the extent consistent with 
                applicable information, privacy, security, and 
                disclosure laws, beginning July 1, 2014, 
                notwithstanding paragraph (4)(B) (other than clause 
                (iii) of such paragraph) and the second sentence of 
                paragraph (4)(D), a qualified entity may, as determined 
                appropriate by the Secretary, do any or all of the 
                following:
                          ``(i)(I) Use the combined data described in 
                        paragraph (4)(B)(iii) to conduct analyses, 
                        other than for reports described in paragraph 
                        (4), for entities described in subparagraph (B) 
                        for non-public uses, as determined appropriate 
                        by the Secretary, such as for the purposes 
                        described in subclause (II).
                          ``(II) The purposes described in this 
                        subclause are assisting providers of services 
                        and suppliers in developing and participating 
                        in quality and patient care improvement 
                        activities (including developing new models of 
                        care), population health management, and 
                        disease monitoring, and the purposes described 
                        in subparagraph (C).
                          ``(ii) Provide or sell such analyses to 
                        entities described in subparagraph (B).
                          ``(iii) Provide entities described in clauses 
                        (i), (ii), (v), and (vi) of subparagraph (B) 
                        with access to the combined data described in 
                        paragraph (4)(B)(iii) through a qualified data 
                        enclave (as defined in subparagraph (F)) that 
                        is maintained by the qualified entity in order 
                        for entities described in such clauses to 
                        conduct analyses for non-public uses, such as 
                        for the purposes described in clause (i)(II).
                  ``(B) Entities described.--For the purpose of 
                subparagraph (A) clauses (i) and (ii), the entities 
                described in this subparagraph are the following:
                          ``(i) A provider of services.
                          ``(ii) A supplier.
                          ``(iii) Subject to subparagraph (C), an 
                        employer (as defined in section 3(5) of the 
                        Employee Retirement Insurance Security Act of 
                        1974).
                          ``(iv) A health insurance issuer (as defined 
                        in section 2791 of the Public Health Service 
                        Act) that provides data under paragraph 
                        (4)(B)(iii).
                          ``(v) A medical society or hospital 
                        association.
                          ``(vi) Other entities approved by the 
                        Secretary (other than an employer (as so 
                        defined) and a health insurance issuer (as so 
                        defined)).
                  ``(C) Limitation with respect to employers.--Any 
                analyses provided or sold under this paragraph to an 
                employer (as so defined) may only be used by such 
                employer for purposes of providing health insurance to 
                employees and retirees of the employer.
                  ``(D) Protection of patient identification.--
                          ``(i) In general.--Except as provided in 
                        clause (ii), an analysis provided or sold under 
                        this paragraph shall not contain information 
                        that individually identifies a patient.
                          ``(ii) Information on patients of the 
                        provider of services or supplier.--An analysis 
                        that is provided or sold under this paragraph 
                        to a provider of services or supplier may 
                        contain data that individually identifies a 
                        patient of such provider or supplier but only 
                        with respect to items and services furnished by 
                        such provider or supplier to such patient.
                          ``(iii) Opportunity for providers of services 
                        and suppliers to review.--Prior to a qualified 
                        entity providing or selling an analysis under 
                        this paragraph to an entity described in 
                        subparagraph (B), to the extent that such 
                        analysis would individually identify a provider 
                        of services or supplier who is not being 
                        provided or sold such analysis, such qualified 
                        entity shall provide an opportunity for such 
                        provider or supplier to review and submit 
                        corrections to such analysis.
                  ``(E) No redisclosure.--An entity described in 
                subparagraph (B) that is provided or sold an analysis 
                under this paragraph shall not redisclose or make 
                public such an analysis.
                  ``(F) Requirements for a qualified data enclave.--
                          ``(i) Definition.--For purposes of this 
                        paragraph, the term `qualified data enclave' 
                        means a data enclave that the Secretary 
                        determines meets the following:
                                  ``(I) The data enclave is a web-based 
                                portal or comparable mechanism.
                                  ``(II) Subject to the requirements 
                                described in clause (ii) and such other 
                                requirements as the Secretary may 
                                specify, the data enclave is capable of 
                                providing access to the combined data 
                                described in subparagraph (A)(iii).
                          ``(ii) Enclave access requirements.--The 
                        requirements described in this clause are the 
                        following:
                                  ``(I) A qualified data enclave shall 
                                preclude any entity that obtains access 
                                to the data from removing or extracting 
                                the data from such enclave.
                                  ``(II) Subject to the succeeding 
                                sentence, the enclave shall preclude 
                                access to data that individually 
                                identifies a patient, including data on 
                                the patient's name and date of birth 
                                and such other data as the Secretary 
                                shall specify. Such data enclave may 
                                provide providers of services and 
                                suppliers with access to such 
                                individually identifiable patient data 
                                but only with respect to items and 
                                services furnished by such provider or 
                                supplier to such patient.
                                  ``(III) Access to data in the enclave 
                                shall not be provided to any entity 
                                unless the qualified entity and the 
                                entity have entered into a data use 
                                agreement, the terms of which contain 
                                the requirements of this paragraph and 
                                such other terms the Secretary may 
                                specify.
                  ``(G) Annual reports.--Any qualified entity that 
                provides or sells analyses pursuant to subparagraph 
                (A)(ii) or provides access to a qualified data enclave 
                pursuant to subparagraph (A)(iii) shall annually submit 
                to the Secretary a report that includes--
                          ``(i) a summary of the analyses provided or 
                        sold, including the number of such analyses, 
                        the number of purchasers of such analyses, and 
                        the total amount of fees received for such 
                        analyses;
                          ``(ii) a description of the topics and 
                        purposes of such analyses;
                          ``(iii) information on the entities who 
                        obtained access to the qualified data enclave, 
                        the uses of the data, and the total amount of 
                        fees received for providing such access; and
                          ``(iv) other information determined 
                        appropriate by the Secretary.''.
  (b) Expansion of Data Available to Qualified Entities.--Section 
1874(e) of the Social Security Act (42 U.S.C. 1395kk(e)) is amended--
          (1) in the subsection heading, by striking ``Medicare''; and
          (2) in paragraph (3)--
                  (A) by inserting after the first sentence the 
                following new sentence: ``Effective July 1, 2014, if 
                the Secretary determines appropriate, the data 
                described in this paragraph may also include 
                standardized extracts (as determined by the Secretary) 
                of claims data under titles XIX and XXI for assistance 
                provided under such titles for one or more specified 
                geographic areas and time periods requested by a 
                qualified entity.''; and
                  (B) in the last sentence, by inserting ``or under 
                titles XIX or XXI'' before the period at the end.
  (c) Access to Medicare Data by Qualified Clinical Data Registries to 
Facilitate Quality Improvement.--Section 1848(m)(3)(E) of the Social 
Security Act (42 U.S.C. 1395w-4(m)(3)(E)) is amended by adding at the 
end the following new clause:
                          ``(vi) Access to medicare data to facilitate 
                        quality improvement.--
                                  ``(I) In general.--To the extent 
                                consistent with applicable information, 
                                privacy, security, and disclosure laws, 
                                and subject to other requirements as 
                                the Secretary may specify, beginning 
                                July 1, 2014, the Secretary shall, if 
                                requested by a qualified clinical data 
                                registry under this subparagraph, 
                                subject to subclauses (II) and (III), 
                                provide data as described in section 
                                1874(e)(3) (in a form and manner 
                                determined to be appropriate) to such 
                                registry for purposes of linking such 
                                data with clinical data and performing 
                                analyses and research to support 
                                quality improvement or patient safety.
                                  ``(II) Protection.--A qualified 
                                clinical data registry may not publicly 
                                report any data made available under 
                                subclause (I) (or any analyses or 
                                research described in such subclause) 
                                that individually identifies a provider 
                                of services, supplier, or individual 
                                unless the registry obtains the consent 
                                of such provider, supplier, or 
                                individual prior to such reporting.
                                  ``(III) Fee.--The data described in 
                                subclause (I) shall be made available 
                                to qualified clinical data registries 
                                at a fee equal to the cost of making 
                                such data available. Any fee collected 
                                pursuant to the preceding sentence 
                                shall be deposited in the Centers for 
                                Medicare & Medicaid Services Program 
                                Management Account.''.
  (d) Revision of Placement of Fees.--Section 1874(e)(4)(A) of the 
Social Security Act (42 U.S.C. 1395kk(e)(4)(A)) is amended, in the 
second sentence--
          (1) by inserting ``, for periods prior to July 1, 2014,'' 
        after ``deposited''; and
          (2) by inserting the following before the period at the end: 
        ``, and, beginning July 1, 2014, into the Centers for Medicare 
        & Medicaid Services Program Management Account''.

SEC. 9. REDUCING ADMINISTRATIVE BURDEN AND OTHER PROVISIONS.

  (a) Medicare Physician and Practitioner Opt-out to Private 
Contract.--
          (1) Indefinite, continuing automatic extension of opt out 
        election.--
                  (A) In general.--Section 1802(b)(3) of the Social 
                Security Act (42 U.S.C. 1395a(b)(3)) is amended--
                          (i) in subparagraph (B)(ii), by striking 
                        ``during the 2-year period beginning on the 
                        date the affidavit is signed'' and inserting 
                        ``during the applicable 2-year period (as 
                        defined in subparagraph (D))'';
                          (ii) in subparagraph (C), by striking 
                        ``during the 2-year period described in 
                        subparagraph (B)(ii)'' and inserting ``during 
                        the applicable 2-year period''; and
                          (iii) by adding at the end the following new 
                        subparagraph:
                  ``(D) Applicable 2-year periods for effectiveness of 
                affidavits.--In this subsection, the term `applicable 
                2-year period' means, with respect to an affidavit of a 
                physician or practitioner under subparagraph (B), the 
                2-year period beginning on the date the affidavit is 
                signed and includes each subsequent 2-year period 
                unless the physician or practitioner involved provides 
                notice to the Secretary (in a form and manner specified 
                by the Secretary), not later than 30 days before the 
                end of the previous 2-year period, that the physician 
                or practitioner does not want to extend the application 
                of the affidavit for such subsequent 2-year period.''.
                  (B) Effective date.--The amendments made by 
                subparagraph (A) shall apply to affidavits entered into 
                on or after the date that is 60 days after the date of 
                the enactment of this Act.
          (2) Public availability of information on opt-out physicians 
        and practitioners.--Section 1802(b) of the Social Security Act 
        (42 U.S.C. 1395a(b)) is amended--
                  (A) in paragraph (5), by adding at the end the 
                following new subparagraph:
                  ``(D) Opt-out physician or practitioner.--The term 
                `opt-out physician or practitioner' means a physician 
                or practitioner who has in effect an affidavit under 
                paragraph (3)(B).'';
                  (B) by redesignating paragraph (5) as paragraph (6); 
                and
                  (C) by inserting after paragraph (4) the following 
                new paragraph:
          ``(5) Posting of information on opt-out physicians and 
        practitioners.--
                  ``(A) In general.--Beginning not later than February 
                1, 2015, the Secretary shall make publicly available 
                through an appropriate publicly accessible website of 
                the Department of Health and Human Services information 
                on the number and characteristics of opt-out physicians 
                and practitioners and shall update such information on 
                such website not less often than annually.
                  ``(B) Information to be included.--The information to 
                be made available under subparagraph (A) shall include 
                at least the following with respect to opt-out 
                physicians and practitioners:
                          ``(i) Their number.
                          ``(ii) Their physician or professional 
                        specialty or other designation.
                          ``(iii) Their geographic distribution.
                          ``(iv) The timing of their becoming opt-out 
                        physicians and practitioners, relative to when 
                        they first entered practice and with respect to 
                        applicable 2-year periods.
                          ``(v) The proportion of such physicians and 
                        practitioners who billed for emergency or 
                        urgent care services.''.
  (b) Medicare Non-participating Physicians Demonstration Project.--
          (1) In general.--The Secretary of Health and Human Services 
        (in this subsection referred to as the ``Secretary'') shall 
        establish and implement a demonstration project (in this 
        section referred to as the ``demonstration project'') under 
        title XVIII of the Social Security Act to provide that payments 
        for services under such title furnished by non-participating 
        physicians (as defined in section 1861(r)(1) of the Social 
        Security Act (42 U.S.C. 1395x(r)(1))) to individuals entitled 
        to benefits under part A or enrolled under part B of such title 
        are paid directly to such physicians. The Secretary shall carry 
        out the demonstration project in a geographic area that is a 
        statistically significant area no larger than a State.
          (2) Advance notice to physicians.--The Secretary shall, in a 
        timely manner and prior to the beginning of the year in which 
        payment will be made under the demonstration project, notify 
        physicians in the geographic area described in paragraph (1) of 
        the option to participate in the demonstration project.
          (3) Timetable for implementation.--
                  (A) Demonstration start date.--The demonstration 
                project shall apply with respect to services furnished 
                beginning on January 1, 2015.
                  (B) 1-year duration.--The Secretary shall implement 
                the demonstration project such that payments are made 
                under such demonstration project for a period of 1 
                year.
          (4) Report.--Not later than 18 months after the date of the 
        conclusion of the demonstration project, the Secretary shall 
        submit to Congress a report analyzing the impact of the 
        demonstration project. Such report shall include an analysis of 
        the impact, if any, of the demonstration project upon the--
                  (A) percentage and number of physicians who choose 
                not to participate under title XVIII of the Social 
                Security Act and a comparison of such percentage and 
                number to the previous year;
                  (B) percentage of claims submitted by and payments 
                made to physicians in the demonstration that are 
                unassigned and a comparison of unassigned claims and 
                payments by non-participating physicians in the 
                previous year;
                  (C) percentage and number of the physicians in the 
                demonstration by specialty designation; and
                  (D) access to services for which payment is made 
                under such title for individuals entitled to benefits 
                under part A or enrolled under part B of such title.
          (5) Beneficiary notice.--
                  (A) Notice by secretary to beneficiaries.--The 
                Secretary shall notify individuals entitled to benefits 
                under part A or enrolled under part B of title XVIII of 
                the Social Security Act in the geographic area in which 
                the demonstration project is conducted of the 
                implications of physician participation in the 
                demonstration project.
                  (B) Notice by physicians to patients.--A physician 
                who elects to participate in the demonstration project 
                shall notify individuals to whom the physician 
                furnishes services for which payment will be provided 
                under the demonstration project of such election. Such 
                notification shall be provided prior to the provision 
                of service and include a notification, with respect to 
                each such individual, that--
                          (i) the right of the individual to payment is 
                        being reassigned to the physician;
                          (ii) payment for services furnished by the 
                        physician to such individual will be made 
                        directly to the physician; and
                          (iii) the individual is responsible for the 
                        remaining amount, which may be higher than 
                        would be the case if the physician participated 
                        in the Medicare program.
  (c) Gainsharing Study and Report.--Not later than 6 months after the 
date of the enactment of this Act, the Secretary of Health and Human 
Services, in consultation with the Inspector General of the Department 
of Health and Human Services, shall submit to Congress a report with 
legislative recommendations to amend existing fraud and abuse laws, 
through exceptions, safe harbors, or other narrowly targeted 
provisions, to permit gainsharing or similar arrangements between 
physicians and hospitals that improve care while reducing waste and 
increasing efficiency. The report shall--
          (1) consider whether such provisions should apply to 
        ownership interests, compensation arrangements, or other 
        relationships; and
          (2) describe how the recommendations address accountability, 
        transparency, and quality, including how best to limit 
        inducements to stint on care, discharge patients prematurely, 
        or otherwise reduce or limit medically necessary care; and
          (3) consider whether a portion of any savings generated by 
        such arrangements should accrue to the Medicare program under 
        title XVIII of the Social Security Act.
  (d) Promoting Interoperability of Electronic Health Record Systems.--
          (1) Recommendations for achieving widespread ehr 
        interoperability.--
                  (A) Objective.--As a consequence of a significant 
                Federal investment in the implementation of health 
                information technology through the Medicare EHR 
                incentive programs, Congress declares it a national 
                objective to achieve widespread and nationwide exchange 
                of health information through interoperable certified 
                EHR technology by December 31, 2019.
                  (B) Definitions.--In this paragraph:
                          (i) Widespread interoperability.--The term 
                        ``widespread interoperability'' means 
                        nationwide interoperability between certified 
                        EHR technology systems employed by meaningful 
                        EHR users under the Medicare EHR incentive 
                        programs and other clinicians and health care 
                        providers.
                          (ii) Interoperability.--The term 
                        ``interoperability'' means the ability of two 
                        or more health information systems or 
                        components to exchange clinical and other 
                        information and to use the information that has 
                        been exchanged using common standards as to 
                        provide access to longitudinal information for 
                        health care providers in order to facilitate 
                        coordinated care and improved patient outcomes.
                  (C) Establishment of metrics.--Not later than 
                December 31, 2015, and in consultation with 
                stakeholders, the Secretary shall establish metrics to 
                be used to determine if and to the extent that the 
                objective described in subparagraph (A) has been 
                achieved.
                  (D) Recommendations if objective not achieved.--If 
                the Secretary of Health and Human Services determines 
                that the objective described in subparagraph (A) has 
                not been achieved by December 31, 2017, then the 
                Secretary shall submit to Congress a report, by not 
                later than December 31, 2018, that identifies barriers 
                to such objective and recommends actions that the 
                Federal Government can take to achieve such objective. 
                Such recommended actions may include recommendations--
                          (i) to adjust payments for meaningful EHR 
                        users under the Medicare EHR incentive 
                        programs; and
                          (ii) for criteria for decertifying certified 
                        EHR technology products.
          (2) Preventing blocking the sharing of information.--
                  (A) For meaningful ehr professionals.--Section 
                1848(o)(2)(A)(ii) of the Social Security Act (42 U.S.C. 
                1395w-4(o)(2)(A)(ii)) is amended by inserting before 
                the period at the end the following: ``, and the 
                professional demonstrates (through a process specified 
                by the Secretary, such as the use of an attestation 
                similar to that required in the health information 
                technology donation safe harbor established under 
                regulations under section 1128B(b)(3)(E)) that the 
                professional has not and will not take any deliberate 
                action to limit or restrict the use, compatibility, or 
                interoperability of the certified EHR technology''.
                  (B) For meaningful ehr hospitals.--Section 
                1886(n)(3)(A)(ii) of the Social Security Act (42 U.S.C. 
                1395ww(n)(3)(A)(ii)) is amended by inserting before the 
                period at the end the following: ``, and the hospital 
                demonstrates (through a process specified by the 
                Secretary, such as the use of an attestation referred 
                to in section 1848(o)(2)(A)(ii)) that the hospital has 
                not and will not take any deliberate action to limit or 
                restrict the use, compatibility, or interoperability of 
                the certified EHR technology''.
                  (C) Effective date.--The amendments made by this 
                subsection shall apply to meaningful EHR users as of 
                the date that is 6 months after the date of the 
                enactment of this Act.
          (3) Study and report on the feasibility of establishing a 
        website to compare certified ehr technology products.--
                  (A) Study.--The Secretary shall conduct a study to 
                examine the feasibility of establishing a website (in 
                this subsection referred to as the ``website'') that 
                includes aggregated results of surveys of meaningful 
                EHR users on the functionality of certified EHR 
                technology products to enable such users to directly 
                compare the functionality and other features of such 
                products. Such information may be made available 
                through contracts with physician, hospital, or other 
                organizations that maintain such comparative 
                information.
                  (B) Report.--Not later than 1 year after the date of 
                the enactment of this Act, the Secretary shall submit 
                to Congress a report on the website. The report shall 
                include information on the benefits and resources of 
                such a website.
          (4) Definitions.--In this subsection:
                  (A) The term ``certified EHR technology'' has the 
                meaning given such term in section 1848(o)(4) of the 
                Social Security Act (42 U.S.C. 1395w-4(o)(4)).
                  (B) The term ``meaningful EHR hospital'' means an 
                eligible hospital (as defined in section 1886(n)(6)(A) 
                of the Social Security Act (42 U.S.C. 1395ww(n)(6)(A)) 
                that is a meaningful EHR user.
                  (C) The term ``meaningful EHR professional'' means an 
                eligible professional (as defined in section 
                1848(o)(5)(C) of the Social Security Act (42 U.S.C. 
                1395w-4(o)(5)(C)) who is a meaningful EHR user.
                  (D) The term ``meaningful EHR user'' has the meaning 
                given such term under the Medicare EHR incentive 
                programs.
                  (E) The term ``Medicare EHR incentive programs'' 
                means the incentive programs under section 1848(o), 
                subsections (l) and (m) of section 1853, and section 
                1886(n) of the Social Security Act (42 U.S.C. 1395w-
                4(o), 1395w-23, 1395ww(n)).
                  (F) The term ``Secretary'' means the Secretary of 
                Health and Human Services.
  (e) GAO Study and Report on the Use of Telehealth Under Federal 
Programs.--
          (1) Study.--The Comptroller General of the United States 
        shall conduct a study on the following:
                  (A) How the definition of telehealth across various 
                Federal programs and federal efforts can inform the use 
                of telehealth in the Medicare program under title XVIII 
                of the Social Security Act (42 U.S.C. 1395 et seq.).
                  (B) Issues that can facilitate or inhibit the use of 
                telehealth under the Medicare program under such title, 
                including oversight and professional licensure, 
                changing technology, privacy and security, 
                infrastructure requirements, and varying needs across 
                urban and rural areas.
                  (C) Potential implications of greater use of 
                telehealth with respect to payment and delivery system 
                transformations under the Medicare program under such 
                title XVIII and the Medicaid program under title XIX of 
                such Act (42 U.S.C. 1396 et seq.).
                  (D) How the Centers for Medicare & Medicaid Services 
                conducts oversight of payments made under the Medicare 
                program under such title XVIII to providers for 
                telehealth services.
          (2) Report.--Not later than 24 months after the date of the 
        enactment of this Act, the Comptroller General shall submit to 
        Congress a report containing the results of the study conducted 
        under paragraph (1), together with recommendations for such 
        legislation and administrative action as the Comptroller 
        General determines appropriate.
  (f) Rule of Construction Regarding Health Care Provider Standards of 
Care.--
          (1) In general.--The development, recognition, or 
        implementation of any guideline or other standard under any 
        Federal health care provision shall not be construed to 
        establish the standard of care or duty of care owed by a health 
        care provider to a patient in any medical malpractice or 
        medical product liability action or claim.
          (2) Definitions.--For purposes of this subsection:
                  (A) The term ``Federal health care provision'' means 
                any provision of the Patient Protection and Affordable 
                Care Act (Public Law 111-148), title I and subtitle B 
                of title III of the Health Care and Education 
                Reconciliation Act of 2010 (Public Law 111-152), and 
                titles XVIII and XIX of the Social Security Act.
                  (B) The term ``health care provider'' means any 
                individual or entity--
                          (i) licensed, registered, or certified under 
                        Federal or State laws or regulations to provide 
                        health care services; or
                          (ii) required to be so licensed, registered, 
                        or certified but that is exempted by other 
                        statute or regulation.
                  (C) The term ``medical malpractice or medical 
                liability action or claim'' means a medical malpractice 
                action or claim (as defined in section 431(7) of the 
                Health Care Quality Improvement Act of 1986 (42 U.S.C. 
                11151(7))) and includes a liability action or claim 
                relating to a health care provider's prescription or 
                provision of a drug, device, or biological product (as 
                such terms are defined in section 201 of the Federal 
                Food, Drug, and Cosmetic Act or section 351 of the 
                Public Health Service Act).
                  (D) The term ``State'' includes the District of 
                Columbia, Puerto Rico, and any other commonwealth, 
                possession, or territory of the United States.
          (3) No preemption.--No provision of the Patient Protection 
        and Affordable Care Act (Public Law 111-148), title I or 
        subtitle B of title III of the Health Care and Education 
        Reconciliation Act of 2010 (Public Law 111-152), or title XVIII 
        or XIX of the Social Security Act shall be construed to preempt 
        any State or common law governing medical professional or 
        medical product liability actions or claims.

                       I. SUMMARY AND BACKGROUND


                         A. Purpose and Summary

    The bill, H.R. 2810, the Medicare Patient Access and 
Quality Improvement Act of 2013, as reported, repeals the 
Sustainable Growth Rate (SGR) mechanism and reforms how 
Medicare pays for services furnished by physicians and other 
practitioners, referred to as ``professionals.''
    The bill repeals the applicability of the SGR to provide 
needed long-term stability to payments to professionals. It 
establishes an annual payment update of 0.5 percent for the 
years 2014, 2015 and 2016. After this three-year period during 
which no other changes are made to the current payment system, 
the bill establishes a single professional payment incentive 
program that represents consolidation and improvement of the 
three incentive programs that existing under current law. This 
single incentive program, referred to as the Value-Based 
Performance Incentive Program (VBP), continues the focus on 
quality, resource use, and electronic health record (EHR) use 
with which professionals are familiar, but in a cohesive 
program that avoids redundancies. The bill provides incentives 
for professionals to participate in alternative payment models 
(APMs).
    The bill also: improves the coordination of care furnished 
to beneficiaries; improves the accuracy of payment rates; 
provides information to providers and beneficiaries to 
facilitate high-quality, efficient care; and ensures that 
payments by federal programs for the provision of care could 
not be used to establish a standard of care in medical 
liability cases.

                 B. Background and Need for Legislation

    In the Omnibus Budget Reconciliation Act (OBRA) of 1989, 
Congress established the Resource-Based Relative Value Scale 
(RBRVS) as the system for paying professionals for the services 
they provide to Medicare beneficiaries. The RBRVS system bases 
payments on the amount of resources, or inputs, involved in 
providing each individual service. The schedule of payments, or 
fees, set for each service replaced the previous method of 
paying based on the lesser of what was considered to be the 
``customary, prevailing, or reasonable'' charge for a service. 
OBRA of 1989 also established a system that created an 
aggregate annual target for spending under the RBRVS, known as 
Medicare Volume Performance Standards (MVPS). The MVPS system 
included no significant penalty for professionals if the target 
was exceeded. The RBRVS and the MVPS were implemented in 1992. 
However, Congress established the SGR mechanism in the Balanced 
Budget Act of 1997 (BBA) to replace MVPS as a mechanism for 
constraining physician fee schedule spending because 
expenditures consistently exceeded MVPS targets.
    The SGR mechanism determines updates to the physician fee 
schedule by establishing an annual growth allowance that is 
tied to the rate of growth in the overall economy. The SGR is 
cumulative, meaning that an ongoing tally of actual and target 
expenditures has been maintained since the formula's inception. 
If actual expenditures are lower than the cumulative target in 
a year, payments for professionals' services are increased in 
the following year. If actual expenditures are higher than the 
cumulative target, payments for services are decreased. While 
the SGR addresses payment for individual services, there is no 
limit on the volume or intensity of services provided.
    Actual physician fee schedule spending came in under the 
target from 1997 through 2000, resulting in significant payment 
increases during those years; however, since 2001, spending has 
consistently exceeded the target. Accordingly, the SGR 
mechanism has called for a reduction in physician fee schedule 
service payments in each year since 2002. Congress has 
intervened to avert the cut each year since 2003 through 
numerous pieces of legislation. Starting in 2006, the 
legislative efforts to override the SGR's cuts were fashioned 
to reduce the cost at the time of action, but result in deeper 
subsequent cuts. As a result of such legislation and the 
cumulative nature of the SGR, the current projected payment 
reduction to professionals' services is significant. With the 
most recent Congressional intervention, through the Bipartisan 
Budget Act of 2013 (P.L. 113-67), the effects of the SGR have 
been delayed until March 31, 2014. Without further action, 
there will be an across-the-board reduction in payments of 
nearly 24 percent beginning on April 1, 2014.
    The Committee believes that the SGR is flawed and needs to 
be repealed. The SGR is a blunt payment mechanism based on 
macro-economic indicators and has shown little ability to 
influence care decisions made by individual professionals. 
Further, it results in a payment increase or decrease that 
applies equally to all services and professionals regardless of 
their individual practice patterns. The looming threat of an 
SGR payment reduction is disruptive to professionals and 
threatens beneficiary access to care. Congress has spent a 
total of more than $150 billion enacting numerous laws to avert 
pending SGR cuts without addressing the underlying problems of 
the SGR. This spending has historically been offset by policy 
changes that reduce spending elsewhere in the Medicare program. 
The perpetual need to address pending SGR cuts occupies an 
inordinate amount of Congress' time and attention, which 
detracts from other priorities. The Committee believes now is 
the time to address the underlying problem by eliminating the 
SGR and enacting critical payment system reforms that promote 
more accountable, value-driven care.

                         C. Legislative History


                               BACKGROUND

    The Chairman's Amendment in the Nature of a Substitute 
(AINS) to H.R. 2810, the ``Medicare Patient Access and Quality 
Improvement Act of 2013,'' was made publicly available through 
the Committee's website on December 11, 2013.

                            COMMITTEE ACTION

    The Committee marked up H.R. 2810 on December 12, 2013 and 
ordered the bill favorably reported to the House of 
Representatives as amended by a rollcall vote of 39 yeas and 0 
nays (with a quorum being present).

                           COMMITTEE HEARINGS

    On July 24, 2012, the Subcommittee on Health had a hearing 
on physician organization efforts to enhance the value of care 
delivered to patients. The Subcommittee heard testimony from:
           Dr. Lawrence Riddles, President, American 
        College of Physician Executives;
           Dr. David Bronson, President, American 
        College of Physicians;
           Dr. Michael Weinstein, American 
        Gastroenterological Association;
           Dr. Peter Mandrell, American Academy of 
        Orthopaedic Surgeons;
           Aric Sharp, CEO, Quincy Medical Group, 
        Quincy, IL; and
           Dr. John Jenrette, CEO, Sharp Community 
        Medical Group, San Diego, CA.
    On February 7, 2012, the Subcommittee on Health had a 
hearing on private payers efforts to reward professionals who 
deliver high-quality and efficient care. The Subcommittee heard 
testimony from:
           Lewis G. Sandy, MD, Senior Vice President, 
        Clinical Advancement, UnitedHealth Group;
           David Share, MD, MPH, Vice President, Value 
        Partnerships, Blue Cross Blue Shield Michigan;
           Jack Lewin, MD, Chief Executive Officer, 
        American College of Cardiology;
           John L. Bender, MD, President and CEO, 
        Miramont Family Medicine, Ft. Collins, Colorado; and
           Len M. Nichols, PhD, Professor of Health 
        Policy, Director of Center for Health Policy Research 
        and Ethics, George Mason University.
    On February 12, 2011, the Subcommittee on Health had a 
hearing on innovative models that provide an alternative to 
fee-for-service payments. The Subcommittee heard testimony 
from:
           Stuart Guterman, MA, Vice President, Payment 
        and System Reform/Executive Director, Commission on a 
        High Performance Health System, The Commonwealth Fund;
           Lisa Dulsky Watkins, MD, Associate Director, 
        Vermont Blueprint for Health, Department of Vermont 
        Health Access;
           Dana Gelb Safran, ScD, Senior Vice President 
        for Performance Measurement and Improvement, Blue Cross 
        Blue Shield of Massachusetts; and
           Keith Wilson, MD, Chair, Governing Board and 
        Executive Committee, California Association of 
        Physician Groups.

                      II. EXPLANATION OF THE BILL


Section 1. Short title

    The short title of the bill is the ``SGR Repeal and 
Medicare Beneficiary Access Act of 2013.''

Section 2. Repealing the Sustainable Growth Rate (SGR) and improving 
        Medicare payment for physicians' services

                              PRESENT LAW

    In the Omnibus Budget Reconciliation Act (OBRA) of 1989, 
Congress established the Resource-Based Relative Value Scale 
(RBRVS) as the system for paying professionals for the services 
they provide to Medicare beneficiaries. The RBRVS system bases 
payments on the amount of resources (inputs) involved in 
providing each service. The schedule of payments, or fees, set 
for each service replaced the previous method of paying based 
on the lesser of what was considered to be the ``customary, 
prevailing, or reasonable'' charge for a service.
    Under the RBRVS, the Secretary assigns relative value units 
(RVUs) to each of the approximately 7,500 service codes that 
reflect the amount of work, practice expenses and professional 
liability costs. RVU assignments are meant to reflect the 
relative difference in the resources between the various 
services. The assigned RVUs are then adjusted for geographic 
variation in resource costs. The adjusted relative values are 
then converted into a dollar payment amount by a conversion 
factor.
    OBRA of 1989 also established a system that created an 
annual target for spending under the RBRVS, known as Medicare 
Volume Performance Standards (MVPS). The MVPS system 
established an aggregate annual spending target, though there 
was no significant consequence if it was exceeded. The RBRVS 
and the MVPS were implemented in 1992. Congress established the 
SGR mechanism in the Balanced Budget Act of 1997 (BBA) as a 
more forceful mechanism for constraining physician fee schedule 
spending after expenditures consistently exceeded MVPS targets.
    The SGR mechanism established an annual growth allowance 
that tied the rate of growth in payments for professionals' 
services to growth in the overall economy. The SGR is 
cumulative, meaning that an ongoing tally of actual and target 
expenditures has been maintained since the formula's inception. 
If actual expenditures are lower than the cumulative target in 
a year, payments for professionals' services are increased in 
the following year. If actual expenditures are higher than the 
cumulative target, payments are decreased. The BBA, however, 
did not cap total spending on professionals' services. Thus, 
even if payments for services were reduced, spending could 
increase if more services or more costly services were 
provided.
    Given the state of the economy at the time, actual 
physician fee schedule spending came in under the target from 
1997 through 2000, which resulted in significant payment 
increases during that period. However, spending has 
consistently exceeded the target in subsequent years. 
Accordingly, the SGR mechanism has called for a reduction in 
physician fee schedule service payments in each year since 
2002. Congress has intervened to avert the cut each year since 
2003 through numerous pieces of legislation. As a result of 
such legislation and the cumulative nature of the SGR, the 
projected payment reduction to professionals' services is 
significant. With the most recent Congressional intervention, 
through the Bipartisan Budget Act of 2013 (P.L. 113-67), the 
effects of the SGR have been delayed until March 31, 2014. 
However, without further action, the SGR mechanism will result 
in an across the board reduction in payments for professionals' 
services of nearly 24 percent beginning on April 1, 2014.
    Over time, Congress has added incentive programs that 
adjust physician fee schedule payments with the intent to 
improve the quality of care delivered to Medicare beneficiaries 
and constrain the growth of spending for professional services. 
The three main incentive programs are described below.
    The Physician Quality Reporting System (PQRS) adjusts 
payments based on whether professionals report on quality of 
care measures. Professionals receive bonus payments for 
successful reporting through 2014, with those who fail to 
successfully report receiving a downward payment adjustment 
starting in 2015.
    The Value-Based Modifier (VBM) adjusts payment based on 
quality and resource use. Adjustments are made in a budget-
neutral manner, meaning that increased payments to high 
performers are funded by payment reductions to low performers.
    The EHR Meaningful Use program (EHR MU) adjusts payments 
based on whether a professional meets certain requirements in 
the use of a certified EHR system. Professionals receive a 
bonus payment through 2016, with those who fail to demonstrate 
meaningful use receiving a reduction starting in 2015.
    In addition, there are various Medicare alternative payment 
models (APMs) available under current law, though 
professionals' ability to participate in them depends on a 
number of factors. Medicare pilots and demonstration projects, 
which are generally mandated by Congress or established by the 
Secretary using administrative authority, are often conducted 
in a specific geographic area and have a limit on the number of 
participants. Congress established the Medicare Shared Savings 
Program (MSSP) that enables professionals and other providers 
to participate as Accountable Care Organizations (ACOs) that 
meet certain criteria on a nationwide basis.

                             COMMITTEE BILL

            Stabilizing fee updates
    This section permanently repeals the flawed SGR mechanism 
that updates payments, averting a 23.7 percent SGR-induced cut 
scheduled for January 1, 2014. Professionals receive an annual 
update of 0.5 percent in 2014-2016. The rates in 2016 are 
maintained through 2023. In 2023 and subsequent years, 
professionals participating in APMs that meet certain criteria 
receive annual updates of 2 percent, while all other 
professionals receive annual updates of 1 percent.
    The Medicare Payment Advisory Commission (MedPAC) is 
required to submit reports to Congress in 2016 and 2020 that 
assesses the relationship between spending on services 
furnished by professionals under Medicare Part B and total 
expenditures under Medicare Parts A, B, and D. The Committee 
recognizes the critical role of professionals in directing care 
and service use and believes it important to evaluate their 
impact on total program spending, including under the VBP 
program.
            Consolidating current law programs into single incentive 
                    program
    Payments to professionals are adjusted based on performance 
under a single, budget-neutral VBP starting in 2017. The VBP 
streamlines and improves upon the three distinct current law 
incentive programs mentioned above. The payment implications 
associated with the current law incentive program penalties are 
sunset at the end of 2016. The penalties that would have been 
assessed under those programs remain in the payment system.
            Professionals to whom VBP applies
    The VBP applies to: physicians, physician assistants, nurse 
practitioners, clinical nurse specialists, and certified 
registered nurse anesthetists beginning in 2017. It could apply 
to all others professionals paid under the physician fee 
schedule beginning in 2019. While the Secretary has discretion 
to decide whether to expand to these other professionals, the 
Committee intends that all professionals with metrics that 
enable a fair assessment of performance be included in the VBP. 
Professionals who treat few Medicare beneficiaries are excluded 
from the VBP. The Committee intends that this low beneficiary 
volume threshold be set so as to exclude professionals whose 
performance cannot be reliably assessed.
            VBP assessment categories
    The VBP assesses the performance of eligible professionals 
in four categories: quality; resource use; EHR Meaningful Use; 
and clinical practice improvement activities.
    Quality measures used in PQRS are to be used for the 
quality category. However, the Secretary is required to solicit 
recommended measures annually and fund both professional 
organizations and others to develop additional measures for 
consideration. Measures used in qualified clinical data 
registries can be used to assess performance. The Committee 
believes that these steps promote the development and use of 
measures that are meaningful to beneficiaries.
    Metrics used in the current VBM program are to be used for 
the resource use category. However, the methodology that the 
Secretary is currently developing to identify resources 
associated with specific episodes of care will be enhanced 
through public input and an alternative process that directly 
engages professionals. The alternative mechanism entails 
professionals reporting their specific role in treating the 
beneficiary (e.g., primary care or specialist) and the type of 
treatment (e.g., chronic condition, acute episode) on the 
billing claim form. This supplemental mechanism addresses 
concerns that algorithms and attribution rules fail to 
accurately link the cost of services to a professional.
    Further, the section requires additional research and 
recommendations on how to improve risk adjustment methodology 
to ensure that professionals are not penalized for serving sick 
or more costly patients. The Committee is concerned that 
providers who serve individuals with complex care needs or 
individuals from challenging socio-economic environments may 
have greater difficulty meeting some of the goals of value-
based purchasing programs. The Secretary is required to 
complete two studies--one using existing Medicare data and 
another using other relevant risk factors--to examine the 
effects of patient-level variables on providers' performance 
under the VBP and similar Medicare programs. To the extent that 
these variables are found to have an effect, the results of 
these studies will be incorporated into the VBP, the Hierarchal 
Condition Category (HCC), and other Medicare value-based 
purchasing programs to ensure these programs accurately account 
for the characteristics associated with providers' specific 
patient populations. The Committee intends for the Secretary to 
use this information to continually improve the accuracy 
Medicare provider payments and to guard against potential 
selection issues that might compromise access to care for 
vulnerable populations.
    The Committee believes the collection of race and ethnicity 
data is incomplete and that accurate data is necessary to 
better inform value-based purchasing programs. This section 
requires the Secretary to develop and report to Congress on a 
plan to collect and utilize this information within 18 months 
of enactment.
    Resource use is to be first assessed in the VBP in 2020, a 
three-year delay from the 2017 start date that applies to the 
other categories. The Committee believes this delay provides 
more time for the development and improvement of methodologies, 
including more precise risk adjustment, that allow for more 
accurate resource use assessments and the associated payment 
incentives.
    EHR Meaningful Use requirements, demonstrated by use of a 
certified system, continues to apply as the determinant of 
whether professionals receive credit in this category. To 
prevent duplicative reporting, professionals who report 
comparable quality measures through certified EHR systems are 
deemed to meet the meaningful use clinical quality measure 
component.
    Professionals will be assessed on their effort to engage in 
clinical practice improvement activities. The menu of 
recognized activities is to be established in collaboration 
with professionals. Activities must be applicable to all 
specialties and attainable for small practices and 
professionals in rural and underserved areas. The Committee 
believes that the inclusion of this category recognizes 
professionals who are currently performing such activities, 
prompts activities that can improve beneficiary care, and 
facilitates professionals' future participation in APMs.
            Amount tied to performance and performance score 
                    determination
    The funding available for VBP incentive payments is drawn 
from penalties assessed on low performers. In 2017, it is equal 
to 4 percent of the total estimated spending; in 2018, 6 
percent; in 2019, 8 percent; and 10 percent in 2020. Starting 
2021 or later, the funding pool could increase percent to 12 
percent. The Committee believes that this phased-in approach, 
which reduces the amount of funding tied to incentive programs 
compared to current law in the initial VBP years, affords 
professionals more time to acclimate to the VBP program, as 
well as more time to develop meaningful quality and resource 
use metrics applicable to a broad range of professionals. It 
also ensures that VBP penalties remain and are redistributed 
within Medicare's fee schedule.
    The entire funding pool for a year is required to be paid 
out in that year. Professionals' VBP payment reduction is to be 
no greater than the size of the funding percentage amount for 
the year (e.g., 4 percent in 2017); the maximum payment 
increase is to be no greater than funding percentage amount 
(e.g., 4 percent in 2017). While no professional is required to 
get the minimum or maximum, the Committee believes that these 
parameters provide certainty as to the potential payment 
adjustment range.
    Professionals are to be assessed and receive payment 
adjustments based on a composite score determined by 
performance on the four categories. To incentivize upward 
movement, professionals also receive credit for improvement 
from one year to the next in the determination of their quality 
and resource use performance category scores.
    As the Committee believes that professionals should be 
assessed on categories, measures, and activities relevant to 
their practice and important to the beneficiaries that they 
treat, this section directs the Secretary to assess performance 
on only those metrics that apply to a professional's practice. 
Further, the Secretary is directed to ensure that professionals 
who typically do not have face-to-face encounters with patients 
are assessed on meaningful metrics appropriate to their 
situation. The Committee intends that the Secretary will work 
with these professionals to establish appropriate metrics 
consistent with the intent of the categories, measures, and 
activities under the VBP.
    The Government Accountability Office (GAO) is required to 
evaluate the VBP and issue reports in 2018 and 2021, including 
an assessment of the provider types, practice sizes, practice 
geography, and provider patient mix that are receiving VBP 
payment increases and reductions. The Committee believes it is 
important to evaluate the impact of the VBP on an on-going 
basis, with these GAO reports contributing to that effort.
            Expanded participation options and tools to enable success
    The Committee believes it important to provide 
professionals with VBP participation options that enable 
engagement in the manner that best fits their practice 
situation. The Committee also believes it necessary to reduce 
the administrative burden associated with participation, as 
well as to provide information and assistance to promote 
success.
    VBP participations options include: use of EHRs and 
clinical quality data registries maintained by physician 
specialty organizations; and the ability to be assessed as a 
group, as a ``virtual'' group, or with an affiliated hospital 
or other facility.
    Professionals will receive confidential feedback on 
performance in the quality and resource use categories on an at 
least quarterly basis, likely through a web-based portal. This 
system of timely and actionable feedback replaces other, less 
effective mechanisms in current law. The portal allows 
professionals to report VBP information, as feasible and 
appropriate.
    Technical assistance will be available through contracts 
with appropriate entities (such as Quality Improvement 
Organizations) to help practices with fewer than 20 
professionals improve VBP performance or transition to APMs. 
Priority is to be given to practices with low VBP scores and 
those in rural and underserved areas. Funding is provided at 
$50 million annually from 2014 to 2018.
            Encouraging participation in APMs
    The Committee encourages participation in the testing of 
payment models that could serve as an alternative to the fee-
for-service payment system and intends that APMs be available 
to interested professionals.
    Professionals who receive a significant share of their 
revenues through an APM(s) that involves risk of financial 
losses and a quality measurement component receive a 5 percent 
bonus each year from 2017-2022. A patient-centered medical home 
APM is exempt from the downside financial risk requirement if 
proven to work in the Medicare population. Two tracks are 
available for professionals to qualify for the bonus. The first 
option is based on receiving a significant percent of Medicare 
revenue through an APM; the second is based on receiving a 
significant percent of APM revenue combined from Medicare and 
other payers. The second option makes it possible for 
professionals to qualify for the APM bonus even if Medicare APM 
options are limited in their area. Because APMs should be 
designed to contain specific accountability and measurement 
requirements, the Committee legislation stipulates that 
professionals who participate in APMs are excluded from the VBP 
assessment and most EHR meaningful use requirements.
    To make the bonus opportunity available to the greatest 
number of professionals, the Secretary is specifically 
encouraged to test APMs relevant to specialty professionals and 
professionals in small practices, as well as those models that 
align with private and state-based payer initiatives.
    While supportive of APM testing, the Committee highlights a 
few issues worthy of exploration. The Committee believes it 
prudent to examine the potential for fraud vulnerabilities 
associated with new models. Thus, this section directs the 
Secretary, in consultation with the Office of the Inspector 
General, to provide a report to Congress identifying program 
integrity vulnerabilities in new payment systems and, if found, 
provide recommendations with respect to needed legislative 
changes. Further, the Committee does not intend for APMs to 
compromise beneficiary access to needed care or innovative 
medical technologies or treatments. Scenarios that raise 
potential for concern include the time lapse that is common 
before the use of an approved innovation can be assessed 
through a well-vetted quality measure. Likewise, it is critical 
to design and monitor APMs for the possibility of stinting or 
other incentives that could diminish access to needed care. The 
Committee intends for the Secretary to work with stakeholders 
to ensure that APMs do not discourage needed care or 
innovation.
    The Committee believes that APMs should be developed in 
consultation with professionals and other stakeholders and that 
public input can strengthen model development.

Section 3. Priorities and funding for quality measure development

                              PRESENT LAW

    Measures for professionals are currently concentrated in 
certain specialties and services while other specialties and 
services have an insufficient number of measure. In addition, 
many current measures are process measures rather than more 
advanced measures, such as those for: outcomes; functional 
status; patient experience; care coordination; and appropriate 
use of services.

                             COMMITTEE BILL

    This section addresses gaps in quality measurement programs 
to ensure meaningful measures on which to assess professionals 
and provides funding for measure development priorities.
    The Secretary, with stakeholder input, is required to 
develop and publish a plan for the development of quality 
measures for use in the VBP and in APMs, by February 1, 2015. 
The plan is to take into account how measures from the private 
sector and integrated delivery systems can be utilized in the 
Medicare program. The plan is to prioritize outcome measures, 
patient experience measures, care coordination measures, and 
measures of appropriate use of services, and consider gaps in 
quality measurement and applicability of measures across health 
care settings.
    By February 1, 2016, and annually thereafter, the Secretary 
is required to make public a report on the progress made in 
developing quality measures. The report is to include 
descriptions of the number of measures developed, including the 
name and type of each measure. The report will also include 
descriptions of measures under development, including an 
estimated timeline for completion of such measures, as well as 
quality areas being considered for future measure development. 
The Secretary is required to seek stakeholder input regarding 
gaps and prioritization of measure development in relation to 
the annual report.
    This section makes available $15 million in annual funding 
in 2014 to 2018 for professional quality measure development. 
The Secretary is required to contract with entities, including 
physician organizations, to develop priority measures and 
encourage electronic specification of such measures. The 
funding remains available through fiscal year 2021. The 
Committee believes that organizations receiving such contracts 
should have measure development experience or otherwise 
demonstrate needed capability.
    The Committee intends that the funding available for 
quality measure development facilitate the establishment and 
use of measures that are meaningful to beneficiaries and 
relevant to all professional types. The Committee believes that 
the funding helps offset the development costs of new measures 
that some physician organizations and other stakeholders view 
as a barrier to their development and use. The Committee 
intends that the Secretary work with stakeholders on an on-
going basis to facilitate meaningful measures and coordination 
between developing entities.

Section 4. Encouraging care management for individuals with chronic 
        care needs

                              PRESENT LAW

    The most common physician fee schedule service is a visit 
to a professional's office for evaluation and management of a 
beneficiary's condition. Generally, the professional must have 
this type of face-to-face interaction with the beneficiary for 
Medicare to pay for a service. Beneficiaries with chronic care 
needs often require care management services, which typically 
involve a number of interventions that occur outside the face-
to-face encounter. While payments for office visits are 
calculated to include some non-face-to-face care management, 
the amount is widely believed to be inadequate to properly 
coordinate the care of beneficiaries with complex care needs.
    In the 2014 Medicare physician fee schedule final rule, CMS 
established a new payment for professionals for non-face-to-
face chronic care management services that will begin January 
1, 2015. The chronic care management payment will be in 
addition to the standard payment for a beneficiary visit to the 
professional's office. CMS intends to develop the requirements 
that a professional must meet to bill for these services 
through rulemaking for the 2015 physician fee schedule.

                             COMMITTEE BILL

    This section establishes at least one payment code for use 
by professionals furnishing care management services to 
individuals with chronic conditions. Payment for such services 
is to be made to professionals practicing in a patient-centered 
medical home or comparable specialty practice certified by an 
organization(s) recognized by the Secretary beginning January 
1, 2015. Only one professional or group practice can receive 
payment for these services provided to an individual during a 
specified period to prevent Medicare from making duplicative 
payments. Payment for this code(s) is budget-neutral within the 
physician fee schedule, and is not to be tied to an annual 
wellness or other preventive physical examination.

Section 5. Ensuring accurate valuation of services under the Physician 
        Fee Schedule

                              PRESENT LAW

    Medicare pays for more than 7,000 services under the 
physician fee schedule. Payment is equal to the sum of the 
relative value units (RVU)--adjusted for geographic differences 
in costs--for physician work, practice expense, and 
professional liability insurance for each service. A RVU 
reflects the relative resources (e.g., time, overhead, etc.) of 
one physician fee schedule service compared to another.
    The Secretary is responsible for maintaining the physician 
fee schedule, which includes refining the methodology for 
establishing RVUs and modifying the RVUs assigned to each 
service. In establishing RVUs, the Secretary receives 
recommendations from the public, including the American Medical 
Association/Relative-Value Scale Update Committee (RUC). 
Modifications to RVUs for a service are done in a budget-
neutral manner. Thus, payment increases from changes to the 
RVUs for some services must be offset by reductions in payment 
for all other services. The Secretary is required to review the 
RVUs no less than every five years.
    Specifically, the Secretary is required to identify 
physician fee schedule services as being potentially misvalued 
on an on-going basis. To identify potentially misvalued 
services, the Secretary is to examine codes (and families of 
codes, as appropriate) that meet certain criteria, such as 
rapid growth in use.

                             COMMITTEE BILL

    This section promotes greater accuracy in the values that 
are assigned to each individual service paid under the 
physician fee schedule.
            Process to facilitate accurate valuation of services
    The section permits the collection of information from 
professionals, other providers, and suppliers to assist in 
accurate valuation of services. Such information could include: 
practice expense inputs, time involved in furnishing services, 
cost and charge data, and other elements. The information could 
be collected via such mechanisms as surveys, practice logs, 
facility records, and electronic health records. This section 
makes funding available to compensate professionals who submit 
the requested information starting in 2014.
    It expands the list of criteria the Secretary can use to 
identify services that may be misvalued to include codes: that 
account for a majority of spending; with substantial changes in 
procedure time; for which there may be a change in the site of 
service or a significant difference in payment between sites of 
service; services that may have greater efficiencies when 
performed together; or with high practice expenses or high cost 
supplies.
    The Secretary is required to make any change to the 
valuation of a service through notice and comment rulemaking.
    This section also sets an annual target for identifying 
misvalued services of 0.5 percent of the estimated amount of 
fee schedule expenditures in 2015, 2016, 2017, and 2018. If the 
target is met, that amount is redistributed in a budget-neutral 
manner within the physician fee schedule. If the target is not 
met, fee schedule payments for the year are reduced by the 
difference between the target and the amount of misvalued 
services identified in a given year. If the target is exceeded, 
the amount in excess of the target is credited toward the 
following year's target.
    The Committee does not intend to provide the Secretary new 
authority to establish or adjust service values by using 
service value or payment rates established under a system for 
paying other Medicare providers.
            Other provisions
    This section requires that downward adjustments to the 
total value of a service of 20 percent or more (as compared to 
the previous year) be phased-in over a two-year period. It 
provides the Secretary the authority to adjust service values 
to ensure that the difference between similar services is 
logical. The Committee expects only minor adjustments to be 
made to adjust for such differences.
    The GAO is required to study the AMA/Specialty Society 
Relative Value Scale Update Committee (RUC) processes for 
making recommendations on the valuation of physician fee 
schedule services. The report is due no later than one year 
after enactment.
            Adjustment to Medicare payment localities in California
    This section improves the accuracy of physician fee 
schedule payments to professionals in California. Beginning in 
2017, California payment areas transition from county-based 
localities, which have not been updated in 16 years, to 
Metropolitan Statistical Areas (MSAs), which are updated 
annually by the Office of Management and Budget (OMB) and 
factor into Medicare payments to hospitals. Areas not in an MSA 
are grouped together in a single ``rest of state'' payment 
area. MSAs better reflect the population movement that has 
occurred in California over that last decade and a half; under 
the present law county-based locality system San Diego and 
Sacramento are still classified as rural. Payments for areas 
that increase are phased-in over a six-year period. Areas that 
would experience a payment decrease under the new locality 
determinations are held harmless in that their payments cannot 
fall below the amount as it was adjusted under the county-based 
locality system.

Section 6. Promoting evidence-based care

                              PRESENT LAW

    Medicare pays for outpatient imaging services through the 
physician fee schedule. Each imaging service is separated into 
two separate components: a ``technical component,'' which 
encompasses the overhead required to furnish the service; and a 
``professional component,'' which represents the work involved 
in interpreting the results.
    The Deficit Reduction Act of 2005 capped the technical 
component of the payment for services paid under the physician 
fee schedule at the level paid under the hospital outpatient 
prospective payment system effective January 1, 2007. Services 
subject to the cap are: X-rays, ultrasound (including 
echocardiography), nuclear medicine (including positron 
emission tomography), magnetic resonance imaging, computed 
tomography, and fluoroscopy.
    The Secretary subsequently established and maintains 
policies that reduce payment for imaging services performed on 
noncontiguous body areas and the professional component for the 
second and subsequent services to the same patient, in the same 
session, on the same day.
    The Secretary assumes a rate at which imaging machines are 
operated in calculating the payment amount for imaging 
services. Prior to 2011, the Secretary assumed that imaging 
machines were in use 50 percent of the time (25 hours per week) 
that practices are open for business. Congress required that 
the assumed use rate for imaging machines increase from 50 
percent to 75 percent beginning January 1, 2011. Congress 
subsequently enacted legislation that will increase the assumed 
use rate to 90 percent beginning January 1, 2014.

                             COMMITTEE BILL

    The Committee supports advanced diagnostic imaging services 
for beneficiaries who are in need of those services, but seeks 
to ensure that they receive the most appropriate service for 
their condition.
            Selection of Appropriate Use Criteria (AUC)
    This section requires the Secretary to establish a program 
that requires consultation with AUC for advanced imaging as a 
condition of Medicare payment. The Secretary is to specify one 
or more AUC(s) from among those developed or endorsed by 
national professional medical specialty societies or other 
entities by November 15, 2015. The Secretary is to take into 
account whether such criteria: have stakeholder consensus; are 
evidence-based; and are in the public domain. The Committee 
clarifies that the Secretary does not have the authority to 
develop AUC that can be used as a condition of payment for 
advanced imaging or any other Part B service.
            Selection of qualified Clinical Decision Support (CDS) 
                    mechanisms
    This section requires the Secretary to identify and publish 
a list of qualified CDS mechanisms, at least one of which must 
be free of charge, that could be used by ordering professionals 
to consult with applicable AUCs by April 1, 2016. Such 
mechanisms, which could be included in, or independent from, a 
certified EHR technology must: make available the applicable 
AUC(s) and supporting documentation; indicate the AUC(s) being 
used when more than one is available; determine the extent to 
which an imaging order follows the AUC(s); provide 
documentation to the ordering professional that such 
consultation occurred; be updated to reflect revisions to the 
AUC(s); and meet applicable privacy and security standards. The 
mechanism could be required to provide feedback to the ordering 
professional regarding that professional's aggregate adherence 
to applicable AUC(s).
            Consultation with qualified CDS mechanisms
    Beginning January 1, 2017, payment is only made to the 
furnishing professional for an advanced imaging service if the 
claim for such service includes information: showing that the 
ordering professional consulted with a qualified CDS mechanism; 
as to whether the ordered service adheres to the applicable 
AUC(s); and listing the national provider identifier (NPI) of 
the ordering professional.
    The requirement to consult with AUC(s) as a condition of 
payment does not apply to advanced imaging services: ordered 
for an individual with an emergency medical condition as 
defined under EMTALA; paid under Part A; ordered by 
professionals for individuals attributed to a APM that meets 
certain criteria; or ordered by professionals who meet hardship 
criteria, such as lack of Internet access.
            Prior authorization
    The Secretary is required to identify ordering 
professionals with low adherence to applicable AUC(s) 
(``outliers'') based on two years of data. Beginning January 1, 
2020, outliers shall be subject to prior authorization for 
specified advanced imaging services. This section provides $5 
million in each of 2019, 2020, and 2021 for the Secretary to 
carry out the prior authorization program.
            Potential application to other services
    The GAO is required to provide a report to Congress no 
later than 18 months after enactment of the bill regarding 
other Part B services for which the use of clinical decision 
support mechanism is appropriate, such as radiation therapy and 
clinical diagnostic laboratory services.
    The Secretary could establish an AUC program for other Part 
B services. The Secretary is required to consider the 
experience with the use of AUC(s) for advanced imaging services 
and the GAO report referenced above. The Secretary is required 
to obtain input from stakeholders through an Advanced Notice of 
Proposed Rulemaking prior to even proposing use of AUCs as 
condition for payment for another service for a specific year.
    The Committee intends that the Secretary use the process 
established in statute for advanced imaging services if 
exercising the discretion to apply AUCs as a condition for 
payment for other Medicare Part B services. The Committee 
strongly believes it important that AUCs be developed or 
endorsed by physician specialty organizations or other 
organizations representing other providers as applicable. It 
clarifies that the Advanced Notice of Proposed Rulemaking is 
required to ensure thorough vetting prior to expansion to 
another service.

Section 7. Empowering beneficiary choices through access to information 
        on physician services

                              PRESENT LAW

    Congress required the Secretary to establish a Physician 
Compare website by January 1, 2011 that includes information on 
the physicians and other professionals who participate in the 
Physician Quality Reporting System (PQRS). The initial focus is 
on quality measures collected under PQRS. The Secretary is 
required to expand the information available to include 
information on efficiency, safety, patient health outcomes, and 
patient experience. The Secretary is required to ensure that 
data made publicly available are statistically valid and 
reliable. The Secretary is required to report to Congress on 
the Compare website not later than January 1, 2015.

                             COMMITTEE BILL

    The Committee believes it is important to make information 
on professionals' services publicly available to empower 
beneficiaries in making decisions about their health care.
    Not later than July 1, 2015, for physicians and July 1, 
2016, for other professionals, this section requires the 
Secretary to make utilization and payment data publicly 
available through the Medicare ``Physician Compare'' website. 
Such information is to include the number of services 
furnished, the charges submitted, and payments made for such 
services. The information is required to be searchable by the 
eligible professional name, provider type, specialty, location, 
and services furnished.
    This section requires that the website indicate that the 
information may not be representative of the professional's 
entire patient population, variety of services furnished, or 
the health conditions of the individuals treated. Professionals 
must be given an opportunity to review and correct this 
information prior to its posting on the website.
    The Committee expects that this information be presented in 
an easily understandable manner. The Committee believes that 
beneficiaries benefit most from information on the services (or 
group of similar services) that the professional furnishes most 
frequently.

Section 8. Expanding claims data availability to improve care

                              PRESENT LAW

    Congress established a program that requires the Secretary 
to make claims data available to qualified entities (QEs) that 
can be used to measure health care provider performance. The 
Secretary provides QEs with standardized extracts of Medicare 
Parts A, B, and D claims data for one or more specified 
geographic areas and time periods. The fees for making data 
available are to be equal to the cost of providing the data. 
The Secretary must take action necessary to protect the 
identity of beneficiaries.
    To be certified as a QE, entities must agree to: use claims 
data to evaluate the performance of providers on measures of 
quality, efficiency, effectiveness, and resource use; 
requirements governing the use of the data; and make 
performance reports on providers public.
    When requesting Medicare data, a QE must submit to the 
Secretary a description of the methodologies that will be used 
to evaluate provider performance. They must also combine the 
Medicare data with claims data from another source.
    A QE's public reports must include descriptive information 
on elements such as the quality measures and the professional 
attribution method used. Prior to their public release, any 
professional or other provider must be given an opportunity to 
appeal and correct errors.
    Data released to a QE is not subject to discovery or 
admission as evidence in judicial or administrative proceedings 
without consent of the applicable provider.

                             COMMITTEE BILL

            Qualified entities
    Consistent with relevant privacy and security laws, 
entities that currently receive Medicare data for public 
reporting purposes (qualified entities, ``QEs'') are permitted 
to provide or sell non-public analyses and claims data to 
physicians, other professionals, providers, medical societies, 
and hospital associations to assist them in their quality 
improvement activities. In order to ensure data security, the 
claims data are only to be accessible through a qualified data 
enclave (e.g., a web-based portal) from which the data could 
not be extracted. Any data or analyses must be de-identified, 
except for services furnished by the provider accessing the 
data enclave or receiving an analysis. QEs are permitted to 
provide or sell non-public analyses to health insurers and 
self-insured employers (only for purposes of providing health 
insurance to their employees or retirees). Providers identified 
in such analyses must be given an opportunity to review and 
submit corrections before the QE provides or sells the analysis 
to other entities.
    QEs that provide or sell analyses or provide access to a 
data enclave are required to provide an annual report to the 
Secretary that includes an accounting of: the analyses provided 
or sold, including the number of analysis and purchasers, fees 
received, the topics and purposes; and access to the data 
enclave, including fees received, the entities that accessed 
the enclave, and how such data were used. Claims data available 
to QEs is expanded to include Medicaid and Children's Health 
Insurance Program data.
            Qualified clinical data registries
    Consistent with relevant privacy and security laws, the 
Secretary is required to make data available, for a fee that 
covers the cost of preparing the data, to qualified clinical 
data registries to support quality improvement and patient 
safety activities. Such registries must obtain consent prior to 
publicly reporting any data or analysis based on such data that 
is not de-identified.

Section 9. Reducing administrative burden and other provisions

                              PRESENT LAW

    Physicians and some other professionals can ``opt-out'' of 
Medicare by informing the Secretary and providing certain 
information, including an affidavit. Professionals who opt out 
are generally prohibited from billing Medicare for services 
provided to any beneficiary for a two-year period. The 
professional has to inform the Secretary and provide the 
required information for each two-year opt-out period.
    There is currently no requirement that the Secretary make 
public information on the number and characteristics of 
professionals who opt-out of Medicare.
    Enrolled professionals identify annually whether they are 
Medicare ``participating'' or ``non-participating.'' 
Participating professionals agree to accept the physician fee 
schedule amount, referred to as the ``allowed'' amount, as the 
full payment for the service provided. Medicare makes its 
payment, typically 80 percent of the allowed amount, directly 
to the professional; the professional collects the remainder of 
the allowed amount from the beneficiary. Non-participating 
professionals can collect up to 115 percent of the Medicare 
allowed amount for a service. Medicare makes its payment, which 
is 75 percent of the allowed amount, to the beneficiary; the 
professional collects the full amount up to the 115 ``limiting 
charge'' from the beneficiary.
    Under the EHR MU program, professionals must meet 
progressively rigorous requirements as established by the 
Secretary to demonstrate they are using an EHR in a meaningful 
way. The Secretary published the requirements for the second of 
three planned stages in 2012. These ``Stage 2'' rules require 
that a professional's EHR has exchanged information with at 
least one other EHR product. Stage 2 requirements do not 
emphasize interoperability between the wide variety of EHR 
products or widespread sharing of relevant information across 
provider settings and geographic areas.

                             COMMITTEE BILL

            Rule of Construction regarding standard of care
    This section provides that the development, recognition, or 
implementation of any guideline or other standard under any 
Federal health care provision, including Medicare, cannot be 
construed to establish the standard of care or duty of care 
owed by a health care professional to a patient in any medical 
malpractice or medical product liability action or claim.
            Other provisions
    This section: allows professionals who opt-out of Medicare 
to automatically renew at the end of each two-year cycle; 
requires regular reporting of opt-out professional 
characteristics; creates a demonstration project where Medicare 
pays a non-participating professional directly instead of 
paying a beneficiary for Medicare-approved services; requires 
that EHR programs be interoperable by 2019 and prohibits 
providers from deliberately blocking information sharing with 
other EHR vendor products; requires the Secretary to issue a 
report recommending how a permanent physician-hospital 
gainsharing program can best be established; and requires GAO 
to report on barriers to expanded use of telemedicine.

                      III. Votes of the Committee

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, the following statements are made 
concerning the votes of the Committee on its consideration of 
the AINS to H.R. 2810.
    The bill, the ``SGR Repeal and Medicare Beneficiary Access 
Act of 2013,'' was ordered favorably reported to the House of 
Representatives as amended by a rollcall vote of 39 yeas and 0 
nays (with a quorum being present). The vote was as follows:

                         VOTES OF THE COMMITTEE

    In compliance with the Rules of the House of 
Representatives, the following statement is made concerning the 
vote of the Committee on Ways and Means during the markup 
consideration of H.R. 2810 ``Medicare Patient Access and 
Quality Improvement Act of 2013.''
    The bill, H.R. 2810, was ordered favorably reported by a 
rollcall vote of 39 yeas to 0 nays (with a quorum being 
present). The vote was as follows:

----------------------------------------------------------------------------------------------------------------
         Representative             Yea       Nay     Present     Representative      Yea       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Camp.......................        X   ........  .........  Mr. Levin........        X   ........  .........
Mr. Johnson....................        X   ........  .........  Mr. Rangel.......        X   ........  .........
Mr. Brady......................        X   ........  .........  Mr. McDermott....        X   ........  .........
Mr. Ryan.......................        X   ........  .........  Mr. Lewis........        X   ........  .........
Mr. Nunes......................        X   ........  .........  Mr. Neal.........        X   ........  .........
Mr. Tiberi.....................        X   ........  .........  Mr. Becerra......        X   ........  .........
Mr. Reichert...................        X   ........  .........  Mr. Doggett......        X   ........  .........
Mr. Boustany...................        X   ........  .........  Mr. Thompson.....        X   ........  .........
Mr. Roskam.....................        X   ........  .........  Mr. Larson.......        X   ........  .........
Mr. Gerlach....................        X   ........  .........  Mr. Blumenauer...        X   ........  .........
Mr. Price......................        X   ........  .........  Mr. Kind.........        X   ........  .........
Mr. Buchanan...................        X   ........  .........  Mr. Pascrell.....        X   ........  .........
Mr. Smith......................        X   ........  .........  Mr. Crowley......        X   ........  .........
Mr. Schock.....................        X   ........  .........  Ms. Schwartz.....        X   ........  .........
Ms. Jenkins....................        X   ........  .........  Mr. Davis........        X   ........  .........
Mr. Paulsen....................        X   ........  .........  Ms. Sanchez......        X   ........  .........
Mr. Marchant...................        X   ........  .........
Ms. Black......................        X   ........  .........
Mr. Reed.......................        X   ........  .........
Mr. Young......................        X   ........  .........
Mr. Kelly......................        X   ........  .........
Mr. Griffin....................        X   ........  .........
Mr. Renacci....................        X   ........  .........
----------------------------------------------------------------------------------------------------------------

                          Votes on Amendments

    No amendments to the bill were offered.

                     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 revenue provisions 
of the bill as reported: The Committee agrees with the 
estimates prepared by the Congressional Budget Office (CBO), 
which is included below.

 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 finds that the 
bill would result in increased expenditures of $121 billion 
over the 2014-2023 budget window.

      B. 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, January 24, 2014.
Hon. Dave Camp,
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. 2810, the SGR 
Repeal and Medicare Beneficiary Access Act of 2013.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Lori Housman.
            Sincerely,
                                              Douglas W. Elmendorf.
    Enclosure.

H.R. 2810--SGR Repeal and Medicare Beneficiary Access Act of 2013

    Summary: H.R. 2810 would replace the Sustainable Growth 
Rate (SGR) formula, which determines the annual updates to 
payment rates for physician services in Medicare, with new 
systems for establishing those payment rates. CBO estimates 
that enacting H.R. 2810 would increase direct spending by about 
$121 billion over the 2014-2023 period. (The legislation would 
not affect federal revenues.) Pay-as-you-go procedures apply to 
this legislation because it would affect direct spending.
    H.R. 2810 would impose an intergovernmental mandate as 
defined in the Unfunded Mandates Reform Act (UMRA) by 
preempting state laws governing the evidentiary rules and 
practices of medical malpractice claims. CBO estimates that the 
costs of the intergovernmental mandate would be small and would 
not exceed the threshold established in UMRA ($76 million in 
2014, adjusted annually for inflation). The bill contains no 
private-sector mandates as defined in UMRA.
    Estimated cost to the federal government: The estimated 
budgetary impact of H.R. 2810 is shown in the following table. 
The costs of this legislation fall within budget functions 570 
(Medicare) and 550 (health).

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                  By fiscal year, in billions of dollars--
                                                   -----------------------------------------------------------------------------------------------------
                                                     2014    2015    2016    2017    2018    2019    2020    2021    2022    2023   2014-2018  2014-2023
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               CHANGES IN DIRECT SPENDING

Estimated Budget Authority........................     5.3    10.6    10.9    11.1    10.7    12.0    13.5    14.9    16.5    15.5      48.7      121.1
Estimated Outlays.................................     5.3    10.6    10.9    11.1    10.7    12.0    13.5    14.9    16.5    15.5      48.7     121.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: Components may not sum to totals because of rounding.

    Background and major provisions: Medicare compensates 
physicians for services they provide on the basis of a fee 
schedule that specifies payment rates for each type of covered 
service. Payment rates are based on a measure of the resources 
required to provide a given service (measured in relative value 
units or RVUs), adjusted to account for geographical 
differences in input prices, and translated into a dollar 
amount by applying a ``conversion factor.'' The SGR formula 
determines the annual update to the conversion factor. Under 
current law, Medicare's payment rates for physicians' services 
are slated to drop by about 24 percent in April 2014, and CBO 
projects those payment rates will increase by small amounts in 
most subsequent years but will remain below current levels 
throughout the next 10 years.
    The Bipartisan Budget Act of 2013 (enacted as Public Law 
113-67 in December of last year) made multiple changes to the 
Medicare program, including providing for a temporary increase 
of one-half percent in payment rates for services on the 
physician fee schedule furnished during January through March 
of 2014. As a result, conforming changes would have to be made 
to the version of H.R. 2810 that was approved by the Committee 
on Ways and Means earlier in December for its provisions to 
have the intended effects on Medicare payment rates. This 
estimate reflects the assumption that the legislation will 
include such conforming changes.
    H.R. 2810 would replace the SGR with new payment systems 
over the next several years. The major provisions of the new 
payment systems specified in H.R. 2810 are as follows:
       The bill would increase Medicare's payment rates 
for services on the physician fee schedule by 0.5 percent for 
services furnished during calendar year 2015 and by another 0.5 
percent for services furnished during 2016. (The Bipartisan 
Budget Act increased those payment rates by 0.5 percent for the 
first three months of calendar year 2014. This estimate assumes 
that conforming changes to H.R. 2810 would maintain payment 
rates at those levels for services on the physician fee 
schedule for the rest of calendar year 2014.)
       Payment rates for services on the physician fee 
schedule would remain at the 2016 level through 2023, but the 
amounts paid to individual providers would be subject to 
adjustment through one of two mechanisms, depending on whether 
the physician chooses to participate in a Value-Based 
Performance Incentive (VBP) program or an Alternative Payment 
Model (APM) program. (Both programs are described at greater 
length below.)
        Payments to providers who participate in the VBP 
program would be subject to positive or negative performance 
adjustments financed through a funding pool, with the positive 
and negative adjustments designed to be offsetting so that they 
have no net effect on overall payments. The performance 
adjustments could be as large as 4-percent of the amounts paid 
on the physician fee schedule for services provided by 
physicians participating in the VBP program in 2017, and that 
percentage would increase to between 10 percent and 12 percent 
in 2021 and subsequent years. The performance adjustment for an 
individual provider would depend on that provider's 
performance.
       Payments to providers who participate in an APM 
program (in particular, who receive a substantial portion of 
their revenue from alternative payment models) would receive, 
in 2017 through 2022, a lump-sum payment equal to 5 percent of 
their Medicare payments in the prior year for services paid on 
the physician fee schedule. Providers with revenue close to the 
APM revenue threshold would receive either no adjustment to 
their Medicare payments or the VBP performance adjustment if 
they reported measures and activities in that program. 
Providers would not be eligible for a lump-sum payment in 2023.
       For 2024 and subsequent years, there would be 
two payment rates for services paid on the physician fee 
schedule. For providers paid through the VBP program, payment 
rates would be increased each year by 1 percent. For providers 
paid through an APM, payment rates would be increased each year 
by 2 percent.
    In addition, the bill would eliminate current-law penalties 
for providers who do not achieve meaningful use of electronic 
health records or satisfactorily report data on quality. 
However, physicians would have to meet standards for use of EHR 
and quality as part of the VBP program. Also, the bill would 
modify payment rates in certain California counties, adjust 
relative value units for certain physicians' services, and 
require the development of payment codes that would encourage 
care coordination and the use of medical homes.

Value-Based Performance Incentive Program

    The legislation would establish a VBP that would measure 
the total performance of physicians and other medical providers 
based on information reported by those providers regarding 
quality measures, clinical practice improvement activities, 
resource use, and meaningful use of electronic health records. 
The Secretary of Health and Human Services would develop a 
methodology to assess total performance and determine a 
composite score. Beginning in 2017, providers with higher 
composite scores would receive positive performance adjustments 
and providers with lower composite scores would receive no or 
negative performance adjustments. The performance adjustments 
would not increase Medicare spending because reductions in 
payments made to providers with lower composite scores would be 
used to provide higher performance adjustments to providers 
with higher composite scores.
    The Secretary would establish a funding pool to be used to 
distribute VBP payment adjustments by modifying the amount paid 
for each service based on the provider's composite score. The 
funding pool would rise from 4 percent of total payments under 
the physician fee schedule in 2017 to between 10 percent and 
12-percent in 2021 and subsequent years.

Alternative Payment Model (APM) Program

    From 2017 through 2022, certain providers who participate 
in eligible APMs would receive a lump-sum incentive payment 
equal to 5 percent of their aggregate payments from Medicare 
for the preceding year.
    The legislation specifies the following types of Medicare-
eligible APMs:
           Models that: (1) require the provider to 
        bear financial risk, meet standards related to the use 
        of electronic medical records, and meet quality 
        measures comparable to the VBP program, and (2) are 
        being tested through a demonstration program (or have 
        been expanded after being tested) under Medicare or the 
        Center for Medicare and Medicaid Innovation (CMMI); or
           A medical home program expanded after a 
        successful demonstration conducted by CMMI that meets 
        standards related to the use of electronic medical 
        records and quality measures.
    For 2017 and 2018, a provider would be eligible for the 
lump-sum payment of 5 percent if at least 25 percent of the 
provider's Medicare payments were for services furnished in an 
eligible APM. Providers who do not come within 5 percentage 
points of the Medicare share-of-revenue threshold would be 
subject to the rules of the VBP program. However, a provider 
who comes within 5 percentage points of meeting the threshold 
could choose between being paid the fee-schedule amount 
(without further adjustment) or being paid under the rules of 
the VBP program.
    Beginning in 2019, the threshold for the share of revenue 
from eligible APMs necessary to be eligible for the lump-sum 
payment of 5 percent would rise, but the provider could count 
revenue from comparable non-Medicare APMs. Also beginning in 
that year, providers with revenue from an APM that is close to 
those thresholds would have a choice similar to that facing 
providers close to the thresholds in 2017 and 2018.
    Basis of estimate: CBO estimates that enacting H.R. 2810 
would increase direct spending by $48.7 billion over the 2014-
2018 period and $121.1 billion over the 2014-2023 period, 
assuming enactment in the spring of 2014. Nearly all of the 
estimated increase in spending would stem from the specified 
updates to payment rates for services paid on the physician fee 
schedule. CBO estimates that maintaining current payment rates 
for the rest of 2014, providing 0.5 percent updates for 2015 
and 2016, and then maintaining the 2016 level through 2023 
would increase Medicare spending by $118.4 billion over the 
2014-2023 period.
    In addition, CBO estimates that establishing the VBP and 
APM programs with the opportunity for providers to choose to 
participate in only one of the programs would increase Medicare 
spending by $5.5 billion through 2023. That estimate largely 
reflects CBO's expectation that each provider will choose the 
program that is most attractive financially to that provider.
    Other provisions in the bill would modify payment rates in 
certain California counties, adjust RVUs for certain 
physicians' services, require the development of payment codes 
that would encourage care coordination and the use of medical 
homes, and eliminate current-law penalties associated with not 
meeting quality or EHR standards. Those provisions would result 
in estimated net savings of $2.8 billion through 2023.
    CBO's estimate of the budgetary effects of the legislation 
incorporates the effects of: changes in Medicare spending for 
services furnished in the fee-for-service sector on payments to 
Medicare Advantage (MA) plans; changes in receipts from 
premiums paid by beneficiaries; an increased likelihood that 
the Independent Payment Advisory Board (IPAB) mechanism would 
be triggered; and changes in spending by the Department of 
Defense's TRICARE program owing to changes in Medicare payment 
rates:
       Spending for the MA program would rise because 
the ``benchmarks'' that Medicare uses to determine how much the 
program pays for MA enrollees are adjusted for changes in 
Medicare spending per beneficiary in the fee-for-service 
sector. There would be no impact on MA spending under H.R. 2810 
until 2016 because the payment rates currently in effect 
through March of 2014 will be used to set benchmarks for 2015. 
The effect on MA would account for about $42 billion of the 
total estimated increase in direct spending from the 
legislation over the 2015-2023 period.
       Beneficiaries enrolled in Part B of Medicare 
(which covers physicians' and other outpatient services) pay 
premiums that offset about 25 percent of the costs of those 
benefits. Such premium collections are recorded as offsetting 
receipts (a credit against direct spending). Therefore, about 
one-quarter of the gross increase in Medicare spending would be 
offset by changes in those premium receipts. Premiums for 2014 
have been set, so changes to offsetting receipts for this 
legislation would begin in 2015. Over the 2015-2023 period, CBO 
estimates that aggregate Part B premium receipts would rise by 
about $35 billion.
       For 2015 and subsequent years, the IPAB is 
obligated to make changes to the Medicare program that will 
reduce spending if the rate of growth in spending per 
beneficiary is projected to exceed a target rate of growth 
linked to the consumer price index and per capita changes in 
nominal gross domestic product. CBO's projections of the rates 
of growth in spending per beneficiary in its May 2013 baseline 
are below the target rates of growth for fiscal years 2015 
through 2023. However, enacting H.R. 2810 would increase 
Medicare spending, which would increase the likelihood that the 
IPAB mechanism would be triggered. CBO estimates the expected 
value of the savings from triggering the IPAB mechanism would 
be a $0.5 billion reduction in Medicare spending over the 2015-
2023 period.
       The TRICARE program pays Medicare coinsurance 
and deductibles for military retirees. Those coinsurance and 
deductible payments would be higher under the legislation 
because the prices of physicians' services in Medicare would be 
higher. CBO estimates that the effect on TRICARE from the 
legislation would increase direct spending by about $1 billion 
over ten years.
    Pay-As-You-Go considerations: The Statutory Pay-As-You-Go 
(S-PAYGO) Act of 2010 establishes budget-reporting and 
enforcement procedures for legislation affecting direct 
spending or revenues for the current year and ten years 
beginning with the budget year as defined by the Balanced 
Budget and Emergency Deficit Control Act. Beginning in January 
2014, the budget year is fiscal year 2015, so the following S-
PAYGO estimates go through 2024. The net changes in outlays 
that are subject to those pay-as-you-go procedures are shown in 
the following table.

         CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR H.R. 2810, AS ORDERED REPORTED BY THE HOUSE COMMITTEE ON WAYS AND MEANS ON DECEMBER 12, 2013
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                              By fiscal year, in billions of dollars--
                                           -------------------------------------------------------------------------------------------------------------
                                             2014    2015    2016    2017    2018    2019    2020    2021    2022    2023    2024   2014-2019  2014-2024
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               NET INCREASE IN THE DEFICIT
Statutory Pay-As-You-Go Impact............     5.3    10.6    10.9    11.1    10.7    12.0    13.5    14.9    16.5    15.5    16.2      60.7      137.3
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Estimated impact on state, local, and tribal governments: 
H.R. 2810 would shield health care providers from liability 
claims based on any federal guidelines or standards developed, 
recognized, or implemented under any health care provision of 
the Affordable Care Act. That provision would impose an 
intergovernmental mandate as defined in UMRA because it would 
preempt state laws that allow for the use of such guidelines or 
standards in medical malpractice claims. While the preemption 
would limit the application of state laws, CBO estimates that 
it would not impose significant costs and would fall well below 
the threshold established in UMRA for intergovernmental 
mandates ($76 million in 2014, adjusted annually for 
inflation).
    Estimated impact on the private sector: This bill contains 
no new private-sector mandates as defined in UMRA.
    Previous CBO estimate: On September 13, 2013, CBO estimated 
that enacting H.R. 2810 as ordered reported by the House 
Committee on Energy and Commerce on July 31, 2013, would cost 
about $175 billion over the 2014-2023 period. We have 
subsequently reduced that estimate to $146 billion, reflecting 
two final actions. First, the Centers for Medicare and Medicaid 
Services published a final rule that announced the update to 
the conversion factor for the physician fee schedule for 2014 
and other current-law adjustments. The revised payment rates, 
as well as other information provided in the final rule, 
changed CBO's projections of Medicare payment rates for 
services provided on the physician fee schedule for 2014 and 
future years. Second, enactment of the Bipartisan Budget Act of 
2013 temporarily sets updates to payment rates for services on 
the physician fee schedule to 0.5 percent from January 1, 2014, 
to March 31, 2014.
    This estimate for the Ways and Means version of H.R. 2810 
reflects both of those final actions. CBO's estimate for the 
version of H.R. 2810 approved by the Committee on Ways and 
Means is lower than CBO's estimate for the version of H.R. 2810 
approved by the Committee on Energy and Commerce primarily 
because of lower annual updates to payment rates for services 
on the physician fee schedule and lower costs associated with 
payments made through APMs.
    Estimate prepared by: Federal Costs: Lori Housman; Impact 
on State, Local, and Tribal Governments: Lisa Ramirez-Branum; 
Impact on the Private Sector: Alexia Diorio.
    Estimate approved by: Holly Harvey, Deputy Assistant 
Director for Budget Analysis.

   V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE OF 
                            REPRESENTATIVES


          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 held hearings and 
made findings that are reflected in this report.

        B. Statement of General Performance Goals and Objectives

    In accordance with clause 3(c)(4) of rule XIII of the Rules 
of the House of Representatives, the performance goals and 
objectives of the Committee are reflected in the descriptive 
portions of this report.

                   C. Duplication of Federal Programs

    No provision of the bill establishes or reauthorizes a 
program of the Federal Government known to be duplicative of 
another Federal program, a program that was included in any 
report from the Government Accountability Office to Congress 
pursuant to section 21 of Public Law 111-139, or a program 
related to a program identified in the most recent Catalog of 
Federal Domestic Assistance.

              D. Information Related to Unfunded Mandates

    This information is provided in accordance with section 423 
of the Unfunded Mandates Act of 1995 (Public Law 104-4). The 
Committee adopts as its own the estimate of Federal mandates 
prepared by the Director of the Congressional Budget Office.

                E. Applicability to House Rule XXI 5(b)

    Clause 5(b) of rule XXI of the Rules of the House of 
Representatives provides, in part, that ``A bill or joint 
resolution, amendment, or conference report carrying a Federal 
income tax rate increase may not be considered as passed or 
agreed to unless so determined by a vote of not less than 
three-fifths of the Members voting, a quorum being present.'' 
The Committee states that the bill does not involve any Federal 
income tax rate increases within the meaning of the rule.

  F. 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 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.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

SOCIAL SECURITY ACT

           *       *       *       *       *       *       *



     TITLE XI--GENERAL PROVISIONS, PEER REVIEW, AND ADMINISTRATIVE 
SIMPLIFICATION

           *       *       *       *       *       *       *



Part A--General Provisions

           *       *       *       *       *       *       *



              center for medicare and medicaid innovation

  Sec. 1115A. (a) * * *

           *       *       *       *       *       *       *

  (b) Testing of Models (Phase I).--
          (1) * * *
          (2) Selection of models to be tested.--
                  (A) * * *
                  (B) Opportunities.--The models described in 
                this subparagraph are the following models:
                          (i) * * *

           *       *       *       *       *       *       *

                          (xxi) Focusing primarily on 
                        physicians' services (as defined in 
                        section 1848(j)(3)) furnished by 
                        physicians who are not primary care 
                        practitioners.
                          (xxii) Focusing on practices of fewer 
                        than 20 professionals.
                  (C) Additional factors for consideration.--In 
                selecting models for testing under subparagraph 
                (A), the CMI may consider the following 
                additional factors:
                          (i) * * *

           *       *       *       *       *       *       *

                          (viii) Whether the model demonstrates 
                        effective linkage with [other public 
                        sector or private sector payers] other 
                        public sector payers, private sector 
                        payers, or Statewide payment models.

           *       *       *       *       *       *       *


TITLE XVIII--HEALTH INSURANCE FOR THE AGED AND DISABLED

           *       *       *       *       *       *       *


                   free choice by patient guaranteed

  Sec. 1802. (a) * * *
  (b) Use of Private Contracts by Medicare Beneficiaries.--
          (1) * * *

           *       *       *       *       *       *       *

          (3) Physician or practitioner requirements.--
                  (A) * * *
                  (B) Affidavit.--An affidavit is described in 
                this subparagraph if--
                          (i) * * *
                          (ii) the affidavit provides that the 
                        physician or practitioner will not 
                        submit any claim under this title for 
                        any item or service provided to any 
                        medicare beneficiary (and will not 
                        receive any reimbursement or amount 
                        described in paragraph (1)(B) for any 
                        such item or service) [during the 2-
                        year period beginning on the date the 
                        affidavit is signed] during the 
                        applicable 2-year period (as defined in 
                        subparagraph (D)); and

           *       *       *       *       *       *       *

                  (C) Enforcement.--If a physician or 
                practitioner signing an affidavit under 
                subparagraph (B) knowingly and willfully 
                submits a claim under this title for any item 
                or service provided [during the 2-year period 
                described in subparagraph (B)(ii)] during the 
                applicable 2-year period (or receives any 
                reimbursement or amount described in paragraph 
                (1)(B) for any such item or service) with 
                respect to such affidavit--
                          (i) * * *

           *       *       *       *       *       *       *

                  (D) Applicable 2-year periods for 
                effectiveness of affidavits.--In this 
                subsection, the term ``applicable 2-year 
                period'' means, with respect to an affidavit of 
                a physician or practitioner under subparagraph 
                (B), the 2-year period beginning on the date 
                the affidavit is signed and includes each 
                subsequent 2-year period unless the physician 
                or practitioner involved provides notice to the 
                Secretary (in a form and manner specified by 
                the Secretary), not later than 30 days before 
                the end of the previous 2-year period, that the 
                physician or practitioner does not want to 
                extend the application of the affidavit for 
                such subsequent 2-year period.

           *       *       *       *       *       *       *

          (5) Posting of information on opt-out physicians and 
        practitioners.--
                  (A) In general.--Beginning not later than 
                February 1, 2015, the Secretary shall make 
                publicly available through an appropriate 
                publicly accessible website of the Department 
                of Health and Human Services information on the 
                number and characteristics of opt-out 
                physicians and practitioners and shall update 
                such information on such website not less often 
                than annually.
                  (B) Information to be included.--The 
                information to be made available under 
                subparagraph (A) shall include at least the 
                following with respect to opt-out physicians 
                and practitioners:
                          (i) Their number.
                          (ii) Their physician or professional 
                        specialty or other designation.
                          (iii) Their geographic distribution.
                          (iv) The timing of their becoming 
                        opt-out physicians and practitioners, 
                        relative to when they first entered 
                        practice and with respect to applicable 
                        2-year periods.
                          (v) The proportion of such physicians 
                        and practitioners who billed for 
                        emergency or urgent care services.
          [(5)] (6) Definitions.--In this subsection:
                  (A) * * *

           *       *       *       *       *       *       *

                  (D) Opt-out physician or practitioner.--The 
                term ``opt-out physician or practitioner'' 
                means a physician or practitioner who has in 
                effect an affidavit under paragraph (3)(B).

           *       *       *       *       *       *       *


   Part B--Supplementary Medical Insurance Benefits for the Aged and 
Disabled

           *       *       *       *       *       *       *


                          PAYMENT OF BENEFITS

  Sec. 1833. (a) * * *

           *       *       *       *       *       *       *

  (t) Prospective Payment System for Hospital Outpatient 
Department Services.--
          (1) * * *

           *       *       *       *       *       *       *

          (16) Miscellaneous provisions.--
                  (A) * * *

           *       *       *       *       *       *       *

                  (E) Application of appropriate use criteria 
                for certain imaging services.--For provisions 
                relating to the application of appropriate use 
                criteria for certain imaging services, see 
                section 1834(p).

           *       *       *       *       *       *       *

  (x) Incentive Payments for Primary Care Services.--
          (1) * * *

           *       *       *       *       *       *       *

          (3) Coordination with other payments.--The amount of 
        the additional payment for a service under this 
        subsection and subsection (m) shall be determined 
        without regard to any additional payment for the 
        service under subsection (m) and this subsection, 
        respectively. The amount of the additional payment for 
        a service under this subsection and subsection (z) 
        shall be determined without regard to any additional 
        payment for the service under subsection (z) and this 
        subsection, respectively.

           *       *       *       *       *       *       *

  (y) Incentive Payments for Major Surgical Procedures 
Furnished in Health Professional Shortage Areas.--
          (1) * * *

           *       *       *       *       *       *       *

          (3) Coordination with other payments.--The amount of 
        the additional payment for a service under this 
        subsection and subsection (m) shall be determined 
        without regard to any additional payment for the 
        service under subsection (m) and this subsection, 
        respectively. The amount of the additional payment for 
        a service under this subsection and subsection (z) 
        shall be determined without regard to any additional 
        payment for the service under subsection (z) and this 
        subsection, respectively.

           *       *       *       *       *       *       *

  (z) Incentive Payments for Participation in Eligible 
Alternative Payment Models.--
          (1) Payment incentive.--
                  (A) In general.--In the case of covered 
                professional services furnished by an eligible 
                professional during a year that is in the 
                period beginning with 2017 and ending with 2022 
                and for which the professional is a qualifying 
                APM participant, in addition to the amount of 
                payment that would otherwise be made for such 
                covered professional services under this part 
                for such year, there also shall be paid to such 
                professional an amount equal to 5 percent of 
                the payment amount for the covered professional 
                services under this part for the preceding 
                year. For purposes of the previous sentence, 
                the payment amount for the preceding year may 
                be an estimation for the full preceding year 
                based on a period of such preceding year that 
                is less than the full year. The Secretary shall 
                establish policies to implement this 
                subparagraph in cases where payment for covered 
                professional services furnished by a qualifying 
                APM participant in an alternative payment model 
                is made to an entity participating in the 
                alternative payment model rather than directly 
                to the qualifying APM participant.
                  (B) Form of payment.--Payments under this 
                subsection shall be made in a lump sum, on an 
                annual basis, as soon as practicable.
                  (C) Treatment of payment incentive.--Payments 
                under this subsection shall not be taken into 
                account for purposes of determining actual 
                expenditures under an alternative payment model 
                and for purposes of determining or rebasing any 
                benchmarks used under the alternative payment 
                model.
                  (D) Coordination.--The amount of the 
                additional payment for an item or service under 
                this subsection or subsection (m) shall be 
                determined without regard to any additional 
                payment for the item or service under 
                subsection (m) and this subsection, 
                respectively. The amount of the additional 
                payment for an item or service under this 
                subsection or subsection (x) shall be 
                determined without regard to any additional 
                payment for the item or service under 
                subsection (x) and this subsection, 
                respectively. The amount of the additional 
                payment for an item or service under this 
                subsection or subsection (y) shall be 
                determined without regard to any additional 
                payment for the item or service under 
                subsection (y) and this subsection, 
                respectively.
          (2) Qualifying APM participant.--For purposes of this 
        subsection, the term ``qualifying APM participant'' 
        means the following:
                  (A) 2017 and 2018.--With respect to 2017 and 
                2018, an eligible professional for whom the 
                Secretary determines that at least 25 percent 
                of payments under this part for covered 
                professional services furnished by such 
                professional during the most recent period for 
                which data are available (which may be less 
                than a year) were attributable to such services 
                furnished under this part through an entity 
                that participates in an eligible alternative 
                payment model with respect to such services.
                  (B) 2019 and 2020.--With respect to 2019 and 
                2020, an eligible professional described in 
                either of the following clauses:
                          (i) Medicare revenue threshold 
                        option.--An eligible professional for 
                        whom the Secretary determines that at 
                        least 50 percent of payments under this 
                        part for covered professional services 
                        furnished by such professional during 
                        the most recent period for which data 
                        are available (which may be less than a 
                        year) were attributable to such 
                        services furnished under this part 
                        through an entity that participates in 
                        an eligible alternative payment model 
                        with respect to such services.
                          (ii) Combination all-payer and 
                        Medicare revenue threshold option.--An 
                        eligible professional--
                                  (I) for whom the Secretary 
                                determines, with respect to 
                                items and services furnished by 
                                such professional during the 
                                most recent period for which 
                                data are available (which may 
                                be less than a year), that at 
                                least 50 percent of the sum 
                                of--
                                          (aa) payments 
                                        described in clause 
                                        (i); and
                                          (bb) all other 
                                        payments, regardless of 
                                        payer (other than 
                                        payments made by the 
                                        Secretary of Defense or 
                                        the Secretary of 
                                        Veterans Affairs under 
                                        chapter 55 of title 10, 
                                        United States Code, or 
                                        title 38, United States 
                                        Code, or any other 
                                        provision of law),
                                 meet the requirement described 
                                in clause (iii)(I) with respect 
                                to payments described in item 
                                (aa) and meet the requirement 
                                described in clause (iii)(II) 
                                with respect to payments 
                                described in item (bb);
                                  (II) for whom the Secretary 
                                determines at least 25 percent 
                                of payments under this part for 
                                covered professional services 
                                furnished by such professional 
                                during the most recent period 
                                for which data are available 
                                (which may be less than a year) 
                                were attributable to such 
                                services furnished under this 
                                part through an entity that 
                                participates in an eligible 
                                alternative payment model with 
                                respect to such services; and
                                  (III) who provides to the 
                                Secretary such information as 
                                is necessary for the Secretary 
                                to make a determination under 
                                subclause (I), with respect to 
                                such professional.
                          (iii) Requirement.--For purposes of 
                        clause (ii)(I)--
                                  (I) the requirement described 
                                in this subclause, with respect 
                                to payments described in item 
                                (aa) of such clause, is that 
                                such payments are made under an 
                                eligible alternative payment 
                                model; and
                                  (II) the requirement 
                                described in this subclause, 
                                with respect to payments 
                                described in item (bb) of such 
                                clause, is that such payments 
                                are made under an arrangement 
                                in which--
                                          (aa) quality measures 
                                        comparable to measures 
                                        under the performance 
                                        category described in 
                                        section 
                                        1848(q)(2)(B)(i) apply;
                                          (bb) certified EHR 
                                        technology is used; and
                                          (cc) the eligible 
                                        professional bears more 
                                        than nominal financial 
                                        risk if actual 
                                        aggregate expenditures 
                                        exceeds expected 
                                        aggregate expenditures.
                  (C) Beginning in 2021.--With respect to 2021 
                and each subsequent year, an eligible 
                professional described in either of the 
                following clauses:
                          (i) Medicare revenue threshold 
                        option.--An eligible professional for 
                        whom the Secretary determines that at 
                        least 75 percent of payments under this 
                        part for covered professional services 
                        furnished by such professional during 
                        the most recent period for which data 
                        are available (which may be less than a 
                        year) were attributable to such 
                        services furnished under this part 
                        through an entity that participates in 
                        an eligible alternative payment model 
                        with respect to such services.
                          (ii) Combination all-payer and 
                        Medicare revenue threshold option.--An 
                        eligible professional--
                                  (I) for whom the Secretary 
                                determines, with respect to 
                                items and services furnished by 
                                such professional during the 
                                most recent period for which 
                                data are available (which may 
                                be less than a year), that at 
                                least 75 percent of the sum 
                                of--
                                          (aa) payments 
                                        described in clause 
                                        (i); and
                                          (bb) all other 
                                        payments, regardless of 
                                        payer (other than 
                                        payments made by the 
                                        Secretary of Defense or 
                                        the Secretary of 
                                        Veterans Affairs under 
                                        chapter 55 of title 10, 
                                        United States Code, or 
                                        title 38, United States 
                                        Code, or any other 
                                        provision of law),
                                 meet the requirement described 
                                in clause (iii)(I) with respect 
                                to payments described in item 
                                (aa) and meet the requirement 
                                described in clause (iii)(II) 
                                with respect to payments 
                                described in item (bb);
                                  (II) for whom the Secretary 
                                determines at least 25 percent 
                                of payments under this part for 
                                covered professional services 
                                furnished by such professional 
                                during the most recent period 
                                for which data are available 
                                (which may be less than a year) 
                                were attributable to such 
                                services furnished under this 
                                part through an entity that 
                                participates in an eligible 
                                alternative payment model with 
                                respect to such services; and
                                  (III) who provides to the 
                                Secretary such information as 
                                is necessary for the Secretary 
                                to make a determination under 
                                subclause (I), with respect to 
                                such professional.
                          (iii) Requirement.--For purposes of 
                        clause (ii)(I)--
                                  (I) the requirement described 
                                in this subclause, with respect 
                                to payments described in item 
                                (aa) of such clause, is that 
                                such payments are made under an 
                                eligible alternative payment 
                                model; and
                                  (II) the requirement 
                                described in this subclause, 
                                with respect to payments 
                                described in item (bb) of such 
                                clause, is that such payments 
                                are made under an arrangement 
                                in which--
                                          (aa) quality measures 
                                        comparable to measures 
                                        under the performance 
                                        category described in 
                                        section 
                                        1848(q)(2)(B)(i) apply;
                                          (bb) certified EHR 
                                        technology is used; and
                                          (cc) the eligible 
                                        professional bears more 
                                        than nominal financial 
                                        risk if actual 
                                        aggregate expenditures 
                                        exceeds expected 
                                        aggregate expenditures.
          (2) Additional definitions.--In this subsection:
                  (A) Covered professional services.--The term 
                ``covered professional services'' has the 
                meaning given that term in section 
                1848(k)(3)(A).
                  (B) Eligible professional.--The term 
                ``eligible professional'' has the meaning given 
                that term in section 1848(k)(3)(B).
                  (C) Alternative payment model (APM).--The 
                term ``alternative payment model'' means any of 
                the following:
                          (i) A model under section 1115A 
                        (other than a health care innovation 
                        award).
                          (ii) An accountable care organization 
                        under section 1899.
                          (iii) A demonstration under section 
                        1866C.
                          (iv) A demonstration required by 
                        Federal law.
                  (D) Eligible alternative payment model 
                (APM).--
                          (i) In general.--The term ``eligible 
                        alternative payment model'' means, with 
                        respect to a year, an alternative 
                        payment model--
                                  (I) that requires use of 
                                certified EHR technology (as 
                                defined in subsection (o)(4));
                                  (II) that provides for 
                                payment for covered 
                                professional services based on 
                                quality measures comparable to 
                                measures under the performance 
                                category described in section 
                                1848(q)(2)(B)(i); and
                                  (III) that satisfies the 
                                requirement described in clause 
                                (ii).
                          (ii) Additional requirement.--For 
                        purposes of clause (i)(III), the 
                        requirement described in this clause, 
                        with respect to a year and an 
                        alternative payment model, is that the 
                        alternative payment model--
                                  (I) is one in which one or 
                                more entities bear financial 
                                risk for monetary losses under 
                                such model that are in excess 
                                of a nominal amount; or
                                  (II) is a medical home 
                                expanded under section 
                                1115A(c).
          (3) Limitation.--There shall be no administrative or 
        judicial review under section 1869, 1878, or otherwise, 
        of the following:
                  (A) The determination that an eligible 
                professional is a qualifying APM participant 
                under paragraph (2) and the determination that 
                an alternative payment model is an eligible 
                alternative payment model under paragraph 
                (3)(D).
                  (B) The determination of the amount of the 5 
                percent payment incentive under paragraph 
                (1)(A), including any estimation as part of 
                such determination.

        SPECIAL PAYMENT RULES FOR PARTICULAR ITEMS AND SERVICES

  Sec. 1834. (a) * * *

           *       *       *       *       *       *       *

  (p) Recognizing Appropriate Use Criteria for Certain Imaging 
Services.--
          (1) Program established.--
                  (A) In general.--The Secretary shall 
                establish a program to promote the use of 
                appropriate use criteria (as defined in 
                subparagraph (B)) for applicable imaging 
                services (as defined in subparagraph (C)) 
                furnished in an applicable setting (as defined 
                in subparagraph (D)) by ordering professionals 
                and furnishing professionals (as defined in 
                subparagraphs (E) and (F), respectively).
                  (B) Appropriate use criteria defined.--In 
                this subsection, the term ``appropriate use 
                criteria'' means criteria to assist ordering 
                professionals and furnishing professionals in 
                making the most appropriate treatment decision 
                for a specific clinical condition. To the 
                extent feasible, such criteria shall be 
                evidence-based.
                  (C) Applicable imaging service defined.--In 
                this subsection, the term ``applicable imaging 
                service'' means an advanced diagnostic imaging 
                service (as defined in subsection (e)(1)(B)) 
                for which the Secretary determines--
                          (i) one or more applicable 
                        appropriate use criteria specified 
                        under paragraph (2) apply;
                          (ii) there are one or more qualified 
                        clinical decision support mechanisms 
                        listed under paragraph (3)(C); and
                          (iii) one or more of such mechanisms 
                        is available free of charge.
                  (D) Applicable setting defined.--In this 
                subsection, the term ``applicable setting'' 
                means a physician's office, a hospital 
                outpatient department (including an emergency 
                department), an ambulatory surgical center, and 
                any other outpatient setting determined 
                appropriate by the Secretary.
                  (E) Ordering professional defined.--In this 
                subsection, the term ``ordering professional'' 
                means a physician (as defined in section 
                1861(r)) or a practitioner described in section 
                1842(b)(18)(C) who orders an applicable imaging 
                service for an individual.
                  (F) Furnishing professional defined.--In this 
                subsection, the term ``furnishing 
                professional'' means a physician (as defined in 
                section 1861(r)) or a practitioner described in 
                section 1842(b)(18)(C) who furnishes an 
                applicable imaging service for an individual.
          (2) Establishment of applicable appropriate use 
        criteria.--
                  (A) In general.--Not later than November 15, 
                2015, the Secretary shall through rulemaking, 
                and in consultation with physicians, 
                practitioners, and other stakeholders, specify 
                applicable appropriate use criteria for 
                applicable imaging services from among 
                appropriate use criteria developed or endorsed 
                by national professional medical specialty 
                societies or other entities.
                  (B) Considerations.--In specifying applicable 
                appropriate use criteria under subparagraph 
                (A), the Secretary shall take into account 
                whether the criteria--
                          (i) have stakeholder consensus;
                          (ii) have been determined to be 
                        scientifically valid and are evidence 
                        based; and
                          (iii) are in the public domain.
                  (C) Revisions.--The Secretary shall 
                periodically update and revise (as appropriate) 
                such specification of applicable appropriate 
                use criteria.
                  (D) Treatment of multiple applicable 
                appropriate use criteria.--In the case where 
                the Secretary determines that more than one 
                appropriate use criteria applies with respect 
                to an applicable imaging service, the Secretary 
                shall specify one or more applicable 
                appropriate use criteria under this paragraph 
                for the service.
          (3) Mechanisms for consultation with applicable 
        appropriate use criteria.--
                  (A) Identification of mechanisms to consult 
                with applicable appropriate use criteria.--
                          (i) In general.--The Secretary shall 
                        specify one or more qualified clinical 
                        decision support mechanisms that could 
                        be used by ordering professionals to 
                        consult with applicable appropriate use 
                        criteria for applicable imaging 
                        services.
                          (ii) Consultation.--The Secretary 
                        shall consult with physicians, 
                        practitioners, and other stakeholders 
                        in specifying mechanisms under this 
                        paragraph.
                          (iii) Inclusion of certain 
                        mechanisms.--Mechanisms specified under 
                        this paragraph may include any or all 
                        of the following that meet the 
                        requirements described in subparagraph 
                        (B)(ii):
                                  (I) Use of clinical decision 
                                support modules in certified 
                                EHR technology (as defined in 
                                section 1848(o)(4)).
                                  (II) Use of private sector 
                                clinical decision support 
                                mechanisms that are independent 
                                from certified EHR technology, 
                                which may include use of 
                                clinical decision support 
                                mechanisms available from 
                                medical specialty 
                                organizations.
                                  (III) Use of a clinical 
                                decision support mechanism 
                                established by the Secretary.
                  (B) Qualified clinical decision support 
                mechanisms.--
                          (i) In general.--For purposes of this 
                        subsection, a qualified clinical 
                        decision support mechanism is a 
                        mechanism that the Secretary determines 
                        meets the requirements described in 
                        clause (ii).
                          (ii) Requirements.--The requirements 
                        described in this clause are the 
                        following:
                                  (I) The mechanism makes 
                                available to the ordering 
                                professional applicable 
                                appropriate use criteria 
                                specified under paragraph (2) 
                                and the supporting 
                                documentation for the 
                                applicable imaging service 
                                ordered.
                                  (II) In the case where there 
                                are more than one applicable 
                                appropriate use criteria 
                                specified under such paragraph 
                                for an applicable imaging 
                                service, the mechanism 
                                indicates the criteria that it 
                                uses for the service.
                                  (III) The mechanism 
                                determines the extent to which 
                                an applicable imaging service 
                                ordered is consistent with the 
                                applicable appropriate use 
                                criteria so specified.
                                  (IV) The mechanism generates 
                                and provides to the ordering 
                                professional a certification or 
                                documentation that documents 
                                that the qualified clinical 
                                decision support mechanism was 
                                consulted by the ordering 
                                professional.
                                  (V) The mechanism is updated 
                                on a timely basis to reflect 
                                revisions to the specification 
                                of applicable appropriate use 
                                criteria under such paragraph.
                                  (VI) The mechanism meets 
                                privacy and security standards 
                                under applicable provisions of 
                                law.
                                  (VII) The mechanism performs 
                                such other functions as 
                                specified by the Secretary, 
                                which may include a requirement 
                                to provide aggregate feedback 
                                to the ordering professional.
                  (C) List of mechanisms for consultation with 
                applicable appropriate use criteria.--
                          (i) Initial list.--Not later than 
                        April 1, 2016, the Secretary shall 
                        publish a list of mechanisms specified 
                        under this paragraph.
                          (ii) Periodic updating of list.--The 
                        Secretary shall periodically update the 
                        list of qualified clinical decision 
                        support mechanisms specified under this 
                        paragraph.
          (4) Consultation with applicable appropriate use 
        criteria.--
                  (A) Consultation by ordering professional.--
                Beginning with January 1, 2017, subject to 
                subparagraph (C), with respect to an applicable 
                imaging service ordered by an ordering 
                professional that would be furnished in an 
                applicable setting and paid for under an 
                applicable payment system (as defined in 
                subparagraph (D)), an ordering professional 
                shall--
                          (i) consult with a qualified decision 
                        support mechanism listed under 
                        paragraph (3)(C); and
                          (ii) provide to the furnishing 
                        professional the information described 
                        in clauses (i) through (iii) of 
                        subparagraph (B).
                  (B) Reporting by furnishing professional.--
                Beginning with January 1, 2017, subject to 
                subparagraph (C), with respect to an applicable 
                imaging service furnished in an applicable 
                setting and paid for under an applicable 
                payment system (as defined in subparagraph 
                (D)), payment for such service may only be made 
                if the claim for the service includes the 
                following:
                          (i) Information about which qualified 
                        clinical decision support mechanism was 
                        consulted by the ordering professional 
                        for the service.
                          (ii) Information regarding--
                                  (I) whether the service 
                                ordered would adhere to the 
                                applicable appropriate use 
                                criteria specified under 
                                paragraph (2);
                                  (II) whether the service 
                                ordered would not adhere to 
                                such criteria; or
                                  (III) whether such criteria 
                                was not applicable to the 
                                service ordered.
                          (iii) The national provider 
                        identifier of the ordering professional 
                        (if different from the furnishing 
                        professional).
                  (C) Exceptions.--The provisions of 
                subparagraphs (A) and (B) and paragraph (6)(A) 
                shall not apply to the following:
                          (i) Emergency services.--An 
                        applicable imaging service ordered for 
                        an individual with an emergency medical 
                        condition (as defined in section 
                        1867(e)(1)).
                          (ii) Inpatient services.--An 
                        applicable imaging service ordered for 
                        an inpatient and for which payment is 
                        made under part A.
                          (iii) Alternative payment models.--An 
                        applicable imaging service ordered by 
                        an ordering professional with respect 
                        to an individual attributed to an 
                        alternative payment model (as defined 
                        in section 1833(z)(3)(C)).
                          (iv) Significant hardship.--An 
                        applicable imaging service ordered by 
                        an ordering professional who the 
                        Secretary may, on a case-by-case basis, 
                        exempt from the application of such 
                        provisions if the Secretary determines, 
                        subject to annual renewal, that 
                        consultation with applicable 
                        appropriate use criteria would result 
                        in a significant hardship, such as in 
                        the case of a professional who 
                        practices in a rural area without 
                        sufficient Internet access.
                  (D) Applicable payment system defined.--In 
                this subsection, the term ``applicable payment 
                system'' means the following:
                          (i) The physician fee schedule 
                        established under section 1848(b).
                          (ii) The prospective payment system 
                        for hospital outpatient department 
                        services under section 1833(t).
                          (iii) The ambulatory surgical center 
                        payment systems under section 1833(i).
          (5) Identification of outlier ordering 
        professionals.--
                  (A) In general.--With respect to applicable 
                imaging services furnished beginning with 2017, 
                the Secretary shall determine, on a periodic 
                basis (which may be annually), ordering 
                professionals who are outlier ordering 
                professionals.
                  (B) Outlier ordering professionals.--The 
                determination of an outlier ordering 
                professional shall--
                          (i) be based on low adherence to 
                        applicable appropriate use criteria 
                        specified under paragraph (2), which 
                        may be based on comparison to other 
                        ordering professionals; and
                          (ii) include data for ordering 
                        professionals for whom prior 
                        authorization under paragraph (6)(A) 
                        applies.
                  (C) Use of two years of data.--The Secretary 
                shall use two years of data to identify outlier 
                ordering professionals under this paragraph.
                  (D) Consultation with stakeholders.--The 
                Secretary shall consult with physicians, 
                practitioners and other stakeholders in 
                developing methods to identify outlier ordering 
                professionals under this paragraph.
          (6) Prior authorization for ordering professionals 
        who are outliers.--
                  (A) In general.--Beginning January 1, 2020, 
                subject to paragraph (4)(C), with respect to 
                services furnished during a year, the Secretary 
                shall, for a period determined appropriate by 
                the Secretary, apply prior authorization for 
                applicable imaging services that are ordered by 
                an outlier ordering professional identified 
                under paragraph (5).
                  (B) Funding.--For purposes of carrying out 
                this paragraph, the Secretary shall provide for 
                the transfer, from the Federal Supplementary 
                Medical Insurance Trust Fund under section 
                1841, of $5,000,000 to the Centers for Medicare 
                & Medicaid Services Program Management Account 
                for each of fiscal years 2019 through 2021. 
                Amounts transferred under the preceding 
                sentence shall remain available until expended.
  (q) Establishment of Appropriate Use Program for Other Part B 
Services.--
          (1) Establishment.--
                  (A) In general.--The Secretary may establish 
                an appropriate use program for services under 
                this part (other than applicable imaging 
                services under subsection (p)) using a process 
                similar to the process under such subsection.
                  (B) Requirements.--In determining whether to 
                establish a program under subparagraph (A), the 
                Secretary shall take into consideration--
                          (i) the implementation of appropriate 
                        use criteria for applicable imaging 
                        services under subsection (p); and
                          (ii) the report under paragraph (2).
                  (C) Input from stakeholders in advance of 
                rulemaking.--Before issuing a notice of 
                proposed rulemaking to establish a program 
                under subparagraph (A), the Secretary shall 
                issue an advance notice of proposed rulemaking.
          (2) Report on experience of imaging appropriate use 
        criteria program.--Not later than 18 months after the 
        date of the enactment of this subsection, the 
        Comptroller General of the United States shall submit 
        to Congress a report that includes a description of the 
        extent to which appropriate use criteria could be used 
        for other services under this part, such as radiation 
        therapy and clinical diagnostic laboratory services.

           *       *       *       *       *       *       *


                    PAYMENT FOR PHYSICIANS' SERVICES

  Sec. 1848. (a) Payment Based on Fee Schedule.--
          (1) * * *

           *       *       *       *       *       *       *

          (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 2015 [or any subsequent payment 
                        year] or 2016, 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] 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); and
                                  (II) for 2016, 98 percent[; 
                                and].
                                  [(III) for 2017 and each 
                                subsequent year, 97 percent.]
                          [(iii) Authority to decrease 
                        applicable percentage for 2018 and 
                        subsequent years.--For 2018 and each 
                        subsequent year, 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, but in no case shall the 
                        applicable percent be less than 95 
                        percent.]

           *       *       *       *       *       *       *

          (8) Incentives for quality reporting.--
                  (A) Adjustment.--
                          (i) In general.--With respect to 
                        covered professional services furnished 
                        by an eligible professional during 2015 
                        [or any subsequent year] or 2016, 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) * * *
                                  (II) for 2016 [and each 
                                subsequent year], 98 percent.

           *       *       *       *       *       *       *

  (b) Establishment of Fee Schedules.--
          (1) * * *

           *       *       *       *       *       *       *

          (8) Encouraging care management for individuals with 
        chronic care needs.--
                  (A) In general.--In order to encourage the 
                management of care by an applicable provider 
                (as defined in subparagraph (B)) for 
                individuals with chronic care needs the 
                Secretary shall--
                          (i) establish one or more HCPCS codes 
                        for chronic care management services 
                        for such individuals; and
                          (ii) subject to subparagraph (D), 
                        make payment (as the Secretary 
                        determines to be appropriate) under 
                        this section for such management 
                        services furnished on or after January 
                        1, 2015, by an applicable provider.
                  (B) Applicable provider defined.--For 
                purposes of this paragraph, the term 
                ``applicable provider'' means a physician (as 
                defined in section 1861(r)(1)), physician 
                assistant or nurse practitioner (as defined in 
                section 1861(aa)(5)(A)), or clinical nurse 
                specialist (as defined in section 
                1861(aa)(5)(B)) who furnishes services as part 
                of a patient-centered medical home or a 
                comparable specialty practice that--
                          (i) is recognized as such a medical 
                        home or comparable specialty practice 
                        by an organization that is recognized 
                        by the Secretary for purposes of such 
                        recognition as such a medical home or 
                        practice; or
                          (ii) meets such other comparable 
                        qualifications as the Secretary 
                        determines to be appropriate.
                  (C) Budget neutrality.--The budget neutrality 
                provision under subsection (c)(2)(B)(ii)(II) 
                shall apply in establishing the payment under 
                subparagraph (A)(ii).
                  (D) 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 (such as in the case of 
                        hospice care or home health 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) Determination of Relative Values for Physicians' 
Services.--
          (1) * * *
          (2) Determination of relative values.--
                  (A) * * *
                  (B) Periodic review and adjustments in 
                relative values.--
                          (i) * * *
                          (ii) Adjustments.--
                                  (I) In general.--The 
                                Secretary shall, to the extent 
                                the Secretary determines to be 
                                necessary and subject to 
                                [subclause (II)] 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.

           *       *       *       *       *       *       *

                          (v) Exemption of certain reduced 
                        expenditures from budget-neutrality 
                        calculation.--The following reduced 
                        expenditures, as estimated by the 
                        Secretary, shall not be taken into 
                        account in applying clause (ii)(II):
                                  (I) * * *

           *       *       *       *       *       *       *

                                  (VIII) Reductions for 
                                misvalued services if target 
                                not met.--Effective for fee 
                                schedules beginning with 2015, 
                                reduced expenditures 
                                attributable to the application 
                                of the target recapture amount 
                                described in subparagraph 
                                (O)(iii).

           *       *       *       *       *       *       *

                  (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] the service or group of 
                        services based on the relative 
                        resources incorporating physician time 
                        and intensity required in furnishing 
                        [the service] 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] 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] the 
                                service or group of services, 
                                and
                                  (II) the malpractice 
                                percentage for [the service] 
                                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] 
                        the service or group of services.

           *       *       *       *       *       *       *

                  (K) Potentially misvalued codes.--
                          (i) * * *
                          [(ii) Identification of potentially 
                        misvalued codes.--For purposes of 
                        identifying potentially misvalued 
                        services pursuant to clause (i)(I), the 
                        Secretary shall examine (as the 
                        Secretary determines to be appropriate) 
                        codes (and families of codes as 
                        appropriate) for which there has been 
                        the fastest growth; codes (and families 
                        of codes as appropriate) that have 
                        experienced substantial changes in 
                        practice expenses; codes for new 
                        technologies or services within an 
                        appropriate period (such as 3 years) 
                        after the relative values are initially 
                        established for such codes; multiple 
                        codes that are frequently billed in 
                        conjunction with furnishing a single 
                        service; codes with low relative 
                        values, particularly those that are 
                        often billed multiple times for a 
                        single treatment; codes which have not 
                        been subject to review since the 
                        implementation of the RBRVS (the so-
                        called ``Harvard-valued codes''); and 
                        such other codes determined to be 
                        appropriate by the Secretary.]
                          (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) * * *

           *       *       *       *       *       *       *

                                  (VI) The [provisions of 
                                subparagraph (B)(ii)(II)] 
                                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)(II)] under subparagraph 
                                (B)(ii)(I).

           *       *       *       *       *       *       *

                  (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 2015 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 
                        2015.
                          (iv) Target recapture amount.--For 
                        purposes of clause (iii), the target 
                        recapture amount is, with respect to a 
                        year, an amount equal to the difference 
                        between--
                                  (I) the target for the year; 
                                and
                                  (II) the estimated net 
                                reduction in expenditures 
                                determined under clause (i) for 
                                the year.
                          (v) Target.--For purposes of this 
                        subparagraph, with respect to a year, 
                        the target is calculated as 0.5 percent 
                        of the estimated amount of expenditures 
                        under the fee schedule under this 
                        section for the year.

           *       *       *       *       *       *       *

          (7) Phase-in of significant relative value unit (rvu) 
        reductions.--Effective for fee schedules established 
        beginning with 2015, 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.
  (d) Conversion Factors.--
          (1) Establishment.--
                  (A) In general.--The conversion factor for 
                each year shall be the conversion factor 
                established under this subsection for the 
                previous year (or, in the case of 1992, 
                specified in subparagraph (B)) adjusted by the 
                update (established under paragraph (3)) for 
                the year involved (for years before 2001) and, 
                for years beginning with 2001, multiplied by 
                the update (established under paragraph (4) or 
                a subsequent paragraph) for the year involved.

           *       *       *       *       *       *       *

          (4) Update for years beginning with 2001 and ending 
        with 2013.--
                  (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 2013 is equal to the product of--
                          (i) * * *

           *       *       *       *       *       *       *

          (15) Update for 2014 through 2016.--The update to the 
        single conversion factor established in paragraph 
        (1)(C) for each of 2014 through 2016 shall be 0.5 
        percent.
          (16) Update for 2017 through 2023.--The update to the 
        single conversion factor established in paragraph 
        (1)(C) for each of 2017 through 2023 shall be zero 
        percent.
          (17) Update for 2024 and subsequent years.--The 
        update to the single conversion factor established in 
        paragraph (1)(C) for 2024 and each subsequent year 
        shall be--
                  (A) for items and services furnished by a 
                qualifying APM participant (as defined in 
                section 1833(z)(2)) for such year, 2 percent; 
                and
                  (B) for other items and services, 1 percent.
  (e) Geographic Adjustment Factors.--
          (1) * * *

           *       *       *       *       *       *       *

          (6) Use of msas as fee schedule areas in 
        California.--
                  (A) In general.--Subject to the succeeding 
                provisions of this paragraph and 
                notwithstanding the previous provisions of this 
                subsection, for services furnished on or after 
                January 1, 2017, the fee schedule areas used 
                for payment under this section applicable to 
                California shall be the following:
                          (i) Each Metropolitan Statistical 
                        Area (each in this paragraph referred 
                        to as an ``MSA''), as defined by the 
                        Director of the Office of Management 
                        and Budget as of December 31 of the 
                        previous year, shall be a fee schedule 
                        area.
                          (ii) All areas not included in an MSA 
                        shall be treated as a single rest-of-
                        State fee schedule area.
                  (B) Transition for msas previously in rest-
                of-state payment locality or in locality 3.--
                          (i) In general.--For services 
                        furnished in California during a year 
                        beginning with 2017 and ending with 
                        2021 in an MSA in a transition area (as 
                        defined in subparagraph (D)), subject 
                        to subparagraph (C), the geographic 
                        index values to be applied under this 
                        subsection for such year shall be equal 
                        to the sum of the following:
                                  (I) Current law component.--
                                The old weighting factor 
                                (described in clause (ii)) for 
                                such year multiplied by the 
                                geographic index values under 
                                this subsection for the fee 
                                schedule area that included 
                                such MSA that would have 
                                applied in such area (as 
                                estimated by the Secretary) if 
                                this paragraph did not apply.
                                  (II) MSA-based component.--
                                The MSA-based weighting factor 
                                (described in clause (iii)) for 
                                such year multiplied by the 
                                geographic index values 
                                computed for the fee schedule 
                                area under subparagraph (A) for 
                                the year (determined without 
                                regard to this subparagraph).
                          (ii) Old weighting factor.--The old 
                        weighting factor described in this 
                        clause--
                                  (I) for 2017, is \5/6\; and
                                  (II) for each succeeding 
                                year, is the old weighting 
                                factor described in this clause 
                                for the previous year minus \1/
                                6\.
                          (iii) MSA-based weighting factor.--
                        The MSA-based weighting factor 
                        described in this clause for a year is 
                        1 minus the old weighting factor under 
                        clause (ii) for that year.
                  (C) Hold harmless.--For services furnished in 
                a transition area in California during a year 
                beginning with 2017, the geographic index 
                values to be applied under this subsection for 
                such year shall not be less than the 
                corresponding geographic index values that 
                would have applied in such transition area (as 
                estimated by the Secretary) if this paragraph 
                did not apply.
                  (D) Transition area defined.--In this 
                paragraph, the term ``transition area'' means 
                each of the following fee schedule areas for 
                2013:
                          (i) The rest-of-State payment 
                        locality.
                          (ii) Payment locality 3.
                  (E) References to fee schedule areas.--
                Effective for services furnished on or after 
                January 1, 2017, for California, any reference 
                in this section to a fee schedule area shall be 
                deemed a reference to a fee schedule area 
                established in accordance with this paragraph.
  (f) Sustainable Growth Rate.--
          (1) Publication.--The Secretary shall cause to have 
        published in the Federal Register not later than--
                  (A) * * *
                  (B) November 1 of each succeeding year 
                through 2013 the sustainable growth rate for 
                such succeeding year and each of the preceding 
                2 years.
          (2) Specification of growth rate.--The sustainable 
        growth rate for all physicians' services for a fiscal 
        year (beginning with fiscal year 1998 and ending with 
        fiscal year 2000) and a year beginning with 2000 and 
        ending with 2013 shall be equal to the product of--
                  (A) * * *

           *       *       *       *       *       *       *

  (i) Miscellaneous Provisions.--
          (1) Restriction on administrative and judicial 
        review.--There shall be no administrative or judicial 
        review under section 1869 or otherwise of--
                  (A) * * *

           *       *       *       *       *       *       *

                  (D) the establishment of geographic 
                adjustment factors under subsection (e), [and]
                  (E) the establishment of the system for the 
                coding of physicians' services under this 
                section[.], and
                  (F) the collection and use of information in 
                the determination of relative values under 
                subsection (c)(2)(M).

           *       *       *       *       *       *       *

  (j) Definitions.--In this section:
          (1) * * *
          (2) Fee schedule area.-- [The term] Except as 
        provided in subsection (e)(6)(D), the term ``fee 
        schedule area'' means a locality used under section 
        1842(b) for purposes of computing payment amounts for 
        physicians' services.

           *       *       *       *       *       *       *

  (k) Quality Reporting System.--
          (1) * * *

           *       *       *       *       *       *       *

          (9) Continued application for purposes of vbp 
        program.--The Secretary shall, in accordance with 
        subsection (q)(1)(F), carry out the provisions of this 
        subsection for purposes of subsection (q).

           *       *       *       *       *       *       *

  (m) Incentive Payments for Quality Reporting.--
          (1) * * *

           *       *       *       *       *       *       *

          (3) Satisfactory reporting and successful electronic 
        prescriber and described.--
                  (A) * * *

           *       *       *       *       *       *       *

                  (C) Satisfactory reporting measures for group 
                practices.--
                          (i) * * *
                          (ii) Statistical sampling model.--The 
                        process under clause (i) shall provide 
                        and, for 2014 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.

           *       *       *       *       *       *       *

                  (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 2015 
                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) * * *

           *       *       *       *       *       *       *

                          (vi) Access to medicare data to 
                        facilitate quality improvement.--
                                  (I) In general.--To the 
                                extent consistent with 
                                applicable information, 
                                privacy, security, and 
                                disclosure laws, and subject to 
                                other requirements as the 
                                Secretary may specify, 
                                beginning July 1, 2014, the 
                                Secretary shall, if requested 
                                by a qualified clinical data 
                                registry under this 
                                subparagraph, subject to 
                                subclauses (II) and (III), 
                                provide data as described in 
                                section 1874(e)(3) (in a form 
                                and manner determined to be 
                                appropriate) to such registry 
                                for purposes of linking such 
                                data with clinical data and 
                                performing analyses and 
                                research to support quality 
                                improvement or patient safety.
                                  (II) Protection.--A qualified 
                                clinical data registry may not 
                                publicly report any data made 
                                available under subclause (I) 
                                (or any analyses or research 
                                described in such subclause) 
                                that individually identifies a 
                                provider of services, supplier, 
                                or individual unless the 
                                registry obtains the consent of 
                                such provider, supplier, or 
                                individual prior to such 
                                reporting.
                                  (III) Fee.--The data 
                                described in subclause (I) 
                                shall be made available to 
                                qualified clinical data 
                                registries at a fee equal to 
                                the cost of making such data 
                                available. Any fee collected 
                                pursuant to the preceding 
                                sentence shall be deposited in 
                                the Centers for Medicare & 
                                Medicaid Services Program 
                                Management Account.

           *       *       *       *       *       *       *

          (5) Application.--
                  (A) * * *

           *       *       *       *       *       *       *

                  (F) Extension.--For 2008 [and subsequent 
                years] through reporting periods occurring in 
                2013, the Secretary shall establish and, for 
                reporting periods occurring in 2014 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).

           *       *       *       *       *       *       *

          [(7)] (8) Additional incentive payment.--
                  (A) * * *

           *       *       *       *       *       *       *

          (9) Continued application for purposes of vbp 
        program.--The Secretary shall, in accordance with 
        subsection (q)(1)(F), carry out the processes under 
        this subsection for purposes of subsection (q).
  (n) Physician Feedback Program.--
          (1) * * *

           *       *       *       *       *       *       *

          (11) Reports ending with 2016.--Reports under the 
        Program shall not be provided after December 31, 2016. 
        See subsection (q)(13) for reports beginning with 2017.
  (o) Incentives for Adoption and Meaningful Use of Certified 
EHR Technology.--
          (1) * * *
          (2) Meaningful ehr user.--
                  (A) In general.--[For purposes of paragraph 
                (1), an] 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) * * *
                          (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 similar to that 
                        required in the health information 
                        technology donation safe harbor 
                        established under regulations under 
                        section 1128B(b)(3)(E)) that the 
                        professional has not and will not take 
                        any deliberate action to limit or 
                        restrict the use, compatibility, or 
                        interoperability of the certified EHR 
                        technology.
                          (iii) Reporting on measures using 
                        ehr.--Subject to subparagraph (B)(ii) 
                        and subsection (q)(5)(C)(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).

           *       *       *       *       *       *       *

                  (D) Continued application for purposes of vbp 
                program.--With respect to 2017 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 VBP 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.

           *       *       *       *       *       *       *

  (p) Establishment of Value-based Payment Modifier.--
          (1) * * *
          (2) Quality.--
                  (A) * * *

           *       *       *       *       *       *       *

                  (C) Continued application for purposes of vbp 
                program.--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 2017 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) * * *
                  (B) Deadlines for implementation.--
                          (i) * * *

           *       *       *       *       *       *       *

                          [(iii) Application.--The Secretary 
                        shall apply the payment modifier 
                        established under this subsection for 
                        items and services furnished--
                                  [(I) beginning on January 1, 
                                2015, with respect to specific 
                                physicians and groups of 
                                physicians the Secretary 
                                determines appropriate; and
                                  [(II) beginning not later 
                                than January 1, 2017, with 
                                respect to all physicians and 
                                groups of physicians.]
                          (iii) Application.--The Secretary 
                        shall apply the payment modifier 
                        established under this subsection for 
                        items and services furnished on or 
                        after January 1, 2015, but before 
                        January 1, 2017, with respect to 
                        specific physicians and groups of 
                        physicians the Secretary determines 
                        appropriate. Such payment modifier 
                        shall not be applied for items and 
                        services furnished on or after January 
                        1, 2017.

           *       *       *       *       *       *       *

  (q) Value-based Performance Incentive Program.--
          (1) Establishment.--
                  (A) In general.--Subject to the succeeding 
                provisions of this subsection, the Secretary 
                shall establish an eligible professional value-
                based performance incentive program (in this 
                subsection referred to as the ``VBP program'') 
                under which the Secretary shall--
                          (i) develop a methodology for 
                        assessing the total performance of each 
                        VBP 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 VBP eligible professional 
                        for a performance period for a year to 
                        make VBP program incentive payments 
                        under paragraph (7) to the professional 
                        for the year.
                  (B) Program implementation.--The VBP program 
                shall apply to payments for items and services 
                furnished on or after January 1, 2017.
                  (C) VBP eligible professional defined.--
                          (i) In general.--For purposes of this 
                        subsection, subject to clauses (ii) and 
                        (iv), the term ``VBP eligible 
                        professional'' means--
                                  (I) for the first and second 
                                years for which the VBP program 
                                applies to payments (and for 
                                the performance period for such 
                                first and second year), a 
                                physician (as defined in 
                                section 1861(r)(1)), 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) for the third year for 
                                which the VBP program 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) and 
                                such other eligible 
                                professionals (as defined in 
                                subsection (k)(3)(B)) as 
                                specified by the Secretary.
                          (ii) Exclusions.--For purposes of 
                        clause (i), the term ``VBP eligible 
                        professional'' does not include, with 
                        respect to a year, an eligible 
                        professional (as defined in subsection 
                        (k)(3)(B))--
                                  (I) who is a qualifying APM 
                                participant (as defined in 
                                section 1833(z)(2));
                                  (II) who, 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 VBP 
                                program; or
                                  (III) who, 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 2017 and 
                                2018, the reference in 
                                subparagraph (A) of such 
                                paragraph to 25 percent was 
                                instead a reference to 20 
                                percent;
                                  (II) with respect to 2019 and 
                                2020--
                                          (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 2021 
                                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 one of the following low-
                        volume threshold measurements to apply 
                        for purposes of clause (ii)(III):
                                  (I) The minimum number (as 
                                determined by the Secretary) of 
                                individuals enrolled under this 
                                part who are treated by the VBP 
                                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 VBP 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 VBP 
                        eligible professional (including 
                        pursuant to clauses (ii) and (v)) with 
                        respect to a year, in no case shall a 
                        reduction under paragraph (6) or a VBP 
                        program incentive payment under 
                        paragraph (7) apply to such individual 
                        for such year.
                          (vii) Partial qualifying apm 
                        participant clarification.--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 VBP 
                        program, such eligible professional is 
                        considered to be a VBP eligible 
                        professional with respect to such year.
                  (D) Application to group practices.--
                          (i) In general.--Under the VBP 
                        program:
                                  (I) Quality performance 
                                category.--The Secretary shall 
                                establish and apply a process 
                                that includes features of the 
                                provisions of subsection 
                                (m)(3)(C) for VBP 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 VBP 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 full 
                        range of items and services furnished 
                        by the VBP eligible professionals in 
                        the group practice involved.
                          (iii) Clarification.--VBP eligible 
                        professionals electing to be a virtual 
                        group under paragraph (5)(J) shall not 
                        be considered VBP eligible 
                        professionals in a group practice for 
                        purposes of applying this subparagraph.
                  (E) Use of registries.--Under the VBP 
                program, 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.
          (2) Measures and activities under performance 
        categories.--
                  (A) Performance categories.--Under the VBP 
                program, 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 
                        established for such period under 
                        subsections (k) and (m), including 
                        under subsection (m)(3)(E), and the 
                        measures of quality of care established 
                        for such period under subsection 
                        (p)(2).
                          (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 
                        covered part D drugs.
                          (iii) Clinical practice improvement 
                        activities.--For the performance 
                        category described in subparagraph 
                        (A)(iii), clinical practice improvement 
                        activities under subcategories 
                        specified by the Secretary for such 
                        period, which shall include at least 
                        the following:
                                  (I) The subcategory of 
                                expanded practice access, which 
                                shall include activities such 
                                as same day appointments for 
                                urgent needs and after hours 
                                access to clinician advice.
                                  (II) The subcategory of 
                                population management, which 
                                shall include activities 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, which shall 
                                include activities 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, which 
                                shall include activities such 
                                as the establishment of care 
                                plans for individuals with 
                                complex care needs, beneficiary 
                                self-management 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 fewer 
                        than 20 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 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 for purposes 
                        of the performance category described 
                        in subparagraph (A)(i).
                          (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) Request for information for 
                        clinical practice improvement 
                        activities.--In initially applying 
                        subparagraph (B)(iii), the Secretary 
                        shall use a request for information to 
                        solicit recommendations from 
                        stakeholders for identifying activities 
                        described in such subparagraph and 
                        specifying criteria for such 
                        activities.
                          (v) 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--
                                  (I) identifying activities 
                                described in subparagraph 
                                (B)(iii);
                                  (II) specifying criteria for 
                                such activities; and
                                  (III) determining whether a 
                                VBP eligible professional meets 
                                such criteria.
                          (vi) Application of measures and 
                        activities to non-patient-facing 
                        providers.--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 
                                provide 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 VBP eligible 
                                professionals of such 
                                professional types or 
                                subcategories, in lieu of such 
                                a measure or activity, a 
                                comparable measure or activity 
                                that fulfills 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.
          (3) Performance standards.--
                  (A) Establishment.--Under the VBP program, 
                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 take into account the 
                following:
                          (i) Historical performance standards.
                          (ii) Improvement rates.
                          (iii) The opportunity for continued 
                        improvement.
          (4) Performance period.--The Secretary shall 
        establish a performance period (or periods) for a year 
        (beginning with the year described in paragraph 
        (1)(B)). 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 consistent 
                with section 2(g)(2) of the SGR Repeal and 
                Medicare Beneficiary Access Act of 2013, the 
                Secretary shall develop a methodology for 
                assessing the total performance of each VBP 
                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 (in this 
                subsection referred to as the ``composite 
                performance score'') for each such professional 
                for each performance period.
                  (B) Weighting performance categories, 
                measures, and activities.--Under the 
                methodology under subparagraph (A), the 
                Secretary--
                          (i) may assign different scoring 
                        weights (including a weight of 0) for--
                                  (I) each performance category 
                                based on the extent to which 
                                the category is applicable to 
                                the type of eligible 
                                professional involved; and
                                  (II) 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 to 
                                the type of eligible 
                                professional involved; and
                          (ii) with respect to the performance 
                        category described in paragraph 
                        (2)(A)(i)--
                                  (I) shall assign a higher 
                                scoring weight to outcomes 
                                measures than to other measures 
                                and increase the scoring weight 
                                for outcome measures over time; 
                                and
                                  (II) may assign a higher 
                                scoring weight to patient 
                                experience measures.
                  (C) 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 VBP 
                        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 for reporting quality 
                        measures.--Under the methodology 
                        established under subparagraph (A), the 
                        Secretary shall--
                                  (I) encourage VBP 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
                                  (II) with respect to a 
                                performance period, with 
                                respect to a year, for which a 
                                VBP 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.
                  (D) Clinical practice improvement activities 
                performance score.--
                          (i) Rule for accreditation.--A VBP 
                        eligible professional who is in a 
                        practice that is certified as a 
                        patient-centered medical home or 
                        comparable specialty practice pursuant 
                        to subsection (b)(8)(B)(i) 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 VBP 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 one-half of the 
                        highest potential score for the 
                        performance category described in 
                        paragraph (2)(A)(iii) for such 
                        performance period. Nothing in the 
                        previous sentence shall prevent such 
                        professional from earning more than 
                        one-half of such highest potential 
                        score for such performance period by 
                        performing additional activities with 
                        respect to such performance category.
                          (iii) Subcategories.--A VBP eligible 
                        professional shall not be required to 
                        perform activities in each subcategory 
                        under paragraph (2)(B)(iii) to achieve 
                        the highest potential score for the 
                        performance category described in 
                        paragraph (2)(A)(iii).
                  (E) Distribution.--The Secretary shall ensure 
                that the application of the methodology 
                developed under subparagraph (A) results in a 
                continuous distribution of performance scores, 
                which shall result in differential payments 
                under paragraph (7).
                  (F) Achievement and improvement.--
                          (i) Taking into account 
                        improvement.--Beginning with the second 
                        year to which the VBP program applies, 
                        in addition to the achievement score of 
                        a VBP eligible professional, 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.--Beginning with the fourth 
                        year to which the VBP program applies, 
                        under the methodology developed under 
                        subparagraph (A), the Secretary may 
                        assign a higher scoring weight under 
                        subparagraph (B) with respect to the 
                        achievement score of a VBP eligible 
                        professional with respect to a measure 
                        or activity specified under paragraph 
                        (2)(B) (or with respect to such a 
                        measure or activity and with respect to 
                        categories described in paragraph 
                        (2)(A)) than to any improvement score 
                        applied under clause (i) with respect 
                        to such measure or activity (or such 
                        measure or activity and categories).
                  (G) Weights for the performance categories.--
                          (i) In general.--Under the 
                        methodology developed under 
                        subparagraph (A), subject to clauses 
                        (ii) and (iii), the composite 
                        performance score shall be determined 
                        as follows:
                                  (I) Quality.--
                                          (aa) In general.--
                                        Subject to item (bb), 
                                        30 percent of such 
                                        score shall be based on 
                                        performance with 
                                        respect to the category 
                                        described in clause (i) 
                                        of paragraph (2)(A).
                                          (bb) First 2 years 
                                        and test year.--For the 
                                        first and second years 
                                        for which the VBP 
                                        program applies to 
                                        payments, 60 percent of 
                                        such score shall be 
                                        based on performance 
                                        with respect to the 
                                        category described in 
                                        clause (i) of paragraph 
                                        (2)(A). With respect to 
                                        the subsequent year, 
                                        the percent described 
                                        in item (aa) of such 
                                        score shall be based on 
                                        performance with 
                                        respect to such 
                                        category only for 
                                        purposes of feedback 
                                        and 60 percent of such 
                                        score shall be based on 
                                        performance with 
                                        respect to such 
                                        category for any other 
                                        purpose under this 
                                        subsection.
                                  (II) Resource use.--
                                          (aa) In general.--
                                        Subject to item (bb), 
                                        30 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 
                                        and test year.--For the 
                                        first and second years 
                                        for which the VBP 
                                        program applies to 
                                        payments, zero percent 
                                        of such score shall be 
                                        based on performance 
                                        with respect to the 
                                        category described in 
                                        clause (ii) of 
                                        paragraph (2)(A). With 
                                        respect to the 
                                        subsequent year, the 
                                        percent described in 
                                        item (aa) of such score 
                                        shall be based on 
                                        performance with 
                                        respect to such 
                                        category only for 
                                        purposes of feedback 
                                        and zero percent of 
                                        such score shall be 
                                        based on performance 
                                        with respect to such 
                                        category for any other 
                                        purpose under this 
                                        subsection.
                                  (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, the percentages applicable 
                        under one or more of subclauses (I), 
                        (II), and (III) of clause (i) for such 
                        year (or, in the case of a year 
                        described in clause (i)(II)(bb), 
                        applicable under one or more of 
                        subclauses (I) and (III)) 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.
                          (iii) Authority to adjust percentages 
                        for quality and resource use.--Other 
                        than for a year described in clause 
                        (i)(II)(bb), the percentages described 
                        in subclauses (I) and (II) of clause 
                        (i), including after application of 
                        clause (ii), shall be equal.
                  (H) 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.
                  (I) Inclusion of quality measure data from 
                multiple 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 VBP 
                eligible professionals with respect to multiple 
                payers.
                  (J) Use of voluntary virtual groups for 
                certain assessment purposes.--
                          (i) In general.--In the case of VBP 
                        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)--
                                  (I) the assessment of 
                                performance provided under such 
                                methodology with respect to the 
                                performance categories 
                                described in clauses (i) and 
                                (ii) of paragraph (2)(A) 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) the composite score 
                                provided under this paragraph 
                                for such performance period 
                                with respect to each such 
                                performance category for each 
                                such VBP eligible professional 
                                in such virtual group shall be 
                                based on the assessment of the 
                                combined performance under 
                                subclause (I) for the 
                                performance category and 
                                performance period.
                          (ii) Election of practices to be a 
                        virtual group.--The Secretary shall, in 
                        accordance with clause (iii), establish 
                        and have in place a process to allow an 
                        individual VBP eligible professional or 
                        a group practice consisting of not more 
                        than 10 VBP eligible professionals to 
                        elect, with respect to a performance 
                        period for a year, for such individual 
                        VBP eligible professional or all such 
                        VBP eligible professionals in such 
                        group practice, respectively, to be a 
                        virtual group under this subparagraph 
                        with at least one other such individual 
                        VBP eligible professional or group 
                        practice making such an election.
                          (iii) Requirements.--The process 
                        under clause (ii) shall provide that--
                                  (I) 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; and
                                  (II) a practice described in 
                                such clause, and each VBP 
                                eligible professional in such 
                                practice, may elect to be in no 
                                more than one virtual group for 
                                a performance period.
          (6) Funding for vbp program incentive payments.--
                  (A) Total amount for incentive payments.--The 
                total amount for VBP program incentive payments 
                under paragraph (7) for all VBP eligible 
                professionals for a year shall be equal to the 
                total amount of the performance funding pool 
                for all VBP eligible professionals under 
                subparagraph (B) for such year, as estimated by 
                the Secretary.
                  (B) Performance funding pool.--
                          (i) In general.--In the case of items 
                        and services furnished by a VBP 
                        eligible professional during a year 
                        (beginning with 2017), the otherwise 
                        applicable fee schedule amount (as 
                        defined in clause (iii)) with respect 
                        to such items and services and eligible 
                        professional for such year shall be 
                        reduced by the applicable percent under 
                        clause (ii). The total amount of such 
                        reductions for a year shall be referred 
                        to in this subsection as the 
                        ``performance funding pool'' for such 
                        year.
                          (ii) Applicable percent defined.--For 
                        purposes of clause (i), the term 
                        ``applicable percent'' means--
                                  (I) for 2017, 4 percent;
                                  (II) for 2018, 6 percent;
                                  (III) for 2019, 8 percent;
                                  (IV) for 2020, 10 percent; 
                                and
                                  (V) for 2021 and subsequent 
                                years, a percent specified by 
                                the Secretary (but in no case 
                                less than 10 percent or more 
                                than 12 percent).
                          (iii) Otherwise applicable fee 
                        schedule amount.--For purposes of this 
                        subparagraph and paragraph (7), the 
                        term ``otherwise applicable fee 
                        schedule amount'' means, with respect 
                        to items and services furnished by a 
                        VBP eligible professional during a 
                        year, the fee schedule amount for such 
                        items and services and year that would 
                        otherwise apply (without application of 
                        this subparagraph or paragraph (7)) 
                        with respect to such eligible 
                        professional under subsection (b), 
                        after application of subsection (a)(3), 
                        or under another fee schedule under 
                        this part.
          (7) VBP program incentive payments.--
                  (A) VBP program incentive payment adjustment 
                factor.--Consistent with section 2(g)(2) of the 
                SGR Repeal and Medicare Beneficiary Access Act 
                of 2013, the Secretary shall specify a VBP 
                program incentive payment adjustment factor for 
                each VBP eligible professional for a year. Such 
                VBP program incentive payment adjustment factor 
                for a VBP eligible professional for a year 
                shall be determined--
                          (i) by the composite performance 
                        score of the eligible professional for 
                        such year;
                          (ii) in a manner such that the 
                        adjustment factors specified under this 
                        subparagraph for a year results in 
                        differential payments under this 
                        paragraph reflecting the full range of 
                        the distribution of composite 
                        performance scores of VBP eligible 
                        professionals determined under 
                        paragraph (5)(E) for such year, with 
                        such professionals having higher 
                        composite performance scores receiving 
                        higher payment; and
                          (iii) in a manner such that the 
                        adjustment factors specified under this 
                        subparagraph for a year--
                                  (I) does not result in a 
                                payment reduction for such year 
                                by an amount that exceeds the 
                                applicable percent described in 
                                paragraph (6)(B)(ii) for such 
                                year; and
                                  (II) does not result in a 
                                payment increase for such year 
                                by an amount that exceeds the 
                                applicable percent described in 
                                paragraph (6)(B)(ii) for such 
                                year.
                  (B) Calculation of vbp program incentive 
                payment amounts.--The VBP program incentive 
                payment amount with respect to items and 
                services furnished by a VBP eligible 
                professional during a year shall be equal to 
                the difference between--
                          (i) the product of--
                                  (I) the VBP program incentive 
                                payment adjustment factor 
                                determined under subparagraph 
                                (A) for such VBP eligible 
                                professional for such year; and
                                  (II) the otherwise applicable 
                                fee schedule amount (as defined 
                                in paragraph (6)(B)(iii)) with 
                                respect to such items and 
                                services and eligible 
                                professional for such year; and
                          (ii) the otherwise applicable fee 
                        schedule amount, as reduced under 
                        paragraph (6)(B), with respect to such 
                        items and services, eligible 
                        professional, and year.
                The application of the preceding sentence may 
                result in the VBP program incentive payment 
                amount being 0.0 with respect to an item or 
                service furnished by a VBP eligible 
                professional.
                  (C) Application of vbp program incentive 
                payment amount.--In the case of items and 
                services furnished by a VBP eligible 
                professional during a year (beginning with 
                2017), the otherwise applicable fee schedule 
                amount, as reduced under paragraph (6)(B), with 
                respect to such items and services and eligible 
                professional for such year shall be increased, 
                if applicable, by the VBP program incentive 
                payment amount determined under subparagraph 
                (B) with respect to such items and services, 
                professional, and year.
                  (D) Budget neutrality.--In specifying the VBP 
                program incentive payment adjustment factor for 
                each VBP eligible professional for a year under 
                subparagraph (A), the Secretary shall ensure 
                that the total amount of VBP program incentive 
                payment amounts under this paragraph for all 
                VBP eligible professionals in a year shall be 
                equal to the performance funding pool for such 
                year under paragraph (6), as estimated by the 
                Secretary.
          (8) Announcement of result of adjustments.--Under the 
        VBP program, the Secretary shall, not later than 60 
        days prior to the year involved, make available to each 
        VBP eligible professional the VBP program incentive 
        payment adjustment factor under paragraph (7) and the 
        payment reduction under paragraph (6) applicable to the 
        eligible professional for items and services furnished 
        by the professional in such year. The Secretary may 
        include such information in the confidential feedback 
        under paragraph (13).
          (9) No effect in subsequent years.--The VBP program 
        incentive payment under paragraph (7) and the payment 
        reduction under paragraph (6) shall each apply only 
        with respect to the year involved, and the Secretary 
        shall not take into account such VBP program incentive 
        payment or payment reduction in making payments to a 
        VBP eligible professional under this part in a 
        subsequent year.
          (10) Public reporting.--
                  (A) In general.--The Secretary shall, in an 
                easily understandable format, make available on 
                the Physician Compare Internet website under 
                subsection (t) the following:
                          (i) Information regarding the 
                        performance of VBP eligible 
                        professionals under the VBP program, 
                        which--
                                  (I) shall include the 
                                composite score for each such 
                                VBP eligible professional and 
                                the performance of each such 
                                VBP eligible professional with 
                                respect to each performance 
                                category; and
                                  (II) may include the 
                                performance of each such VBP 
                                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 VBP program, including the range of 
                composite scores for all VBP eligible 
                professionals and the range of the performance 
                of all VBP eligible professionals with respect 
                to each performance category.
          (11) Consultation.--The Secretary shall consult with 
        stakeholders in carrying out the VBP program, including 
        for the identification of measures and activities under 
        paragraph (2)(B) and the methodologies developed under 
        paragraphs (5)(A) and (7). Such consultation shall 
        include the use of a request for information or other 
        mechanisms determined appropriate.
          (12) 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 VBP eligible professionals in 
                practices of fewer than 20 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 
                the Public Health Service Act), or 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 implementation.--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 $50,000,000 for each of 
                fiscal years 2014 through 2018. Amounts 
                transferred under this subparagraph for a 
                fiscal year shall be available until expended.
          (13) Feedback and information to improve 
        performance.--
                  (A) Performance feedback.--
                          (i) In general.--Beginning July 1, 
                        2015, the Secretary--
                                  (I) shall make available 
                                timely (such as quarterly) 
                                confidential feedback to each 
                                VBP eligible professional on 
                                the performance of such 
                                professional with respect to 
                                the performance categories 
                                under clauses (i) and (ii) of 
                                paragraph (2)(A); and
                                  (II) may make available 
                                confidential feedback to each 
                                such professional on the 
                                performance of such 
                                professional 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. 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 VBP 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, 
                        2016, the Secretary shall make 
                        available to each VBP eligible 
                        professional information, with respect 
                        to individuals who are patients of such 
                        VBP eligible professional, 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 shall be made 
                        available under the previous sentence 
                        to such VBP eligible professionals by 
                        mechanisms determined appropriate by 
                        the Secretary, which may include use of 
                        a web-based portal. Such information 
                        shall be made available in accordance 
                        with the same or similar terms as data 
                        are made available to accountable care 
                        organizations under section 1899, 
                        including a beneficiary opt-out.
                          (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 VBP 
                                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), 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 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) 
                                for care episodes for such 
                                period.
          (14) Review.--
                  (A) Targeted review.--The Secretary shall 
                establish a process under which a VBP eligible 
                professional may seek an informal review of the 
                calculation of the VBP program incentive 
                payment adjustment factor 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 
                (7) with respect to a year (other than with 
                respect to the calculation of such eligible 
                professional's VBP program incentive payment 
                adjustment factor for such year) after the 
                factors determined in subparagraph (A) 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 VBP program incentive 
                        payment adjustment factor under 
                        paragraph (7) and the determination of 
                        such amount.
                          (ii) The determination of the amount 
                        of funding available for such VBP 
                        program incentive payments under 
                        paragraph (6)(A) and the payment 
                        reduction under paragraph (6)(B)(i).
                          (iii) The establishment of the 
                        performance standards under paragraph 
                        (3) and the performance period under 
                        paragraph (4).
                          (iv) 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 (10).
                          (v) 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 value-based 
        performance incentive program 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 distinct care episode groups and 
                distinct 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 
                60 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 60 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) distinct care episode groups; and
                          (ii) distinct 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 distinct care 
                                episode groups and distinct 
                                patient condition groups, which 
                                account for at least an 
                                estimated two-thirds of 
                                expenditures under parts A and 
                                B; 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 is 
                                anticipated or occurs, and the 
                                principal procedures or 
                                services planned or 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 each 
                                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 120 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 60 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 120 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 2016), 
                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 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 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 60 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, or other appropriate mechanisms.
                  (E) Operational list of patient relationship 
                categories and codes.--Not later than 120 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 2016), 
                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, 2016, 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--
                          (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), as the Secretary determines 
                        appropriate.
                  (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 amounts 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 amounts 
                        (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, or other 
                appropriate mechanisms.
          (6) 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).
          (7) Administration.--Chapter 35 of title 44, United 
        States Code, shall not apply to this section.
          (8) Definitions.--In this section:
                  (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
                          (ii) beginning January 1, 2017, such 
                        other eligible professionals (as 
                        defined in subsection (k)(3)(B)) as 
                        specified by the Secretary.
          (9) Clarification.--The provisions of sections 
        1890(b)(7) and 1890A shall not apply to this 
        subsection.
  (s) Priorities and Funding for Quality Measure Development.--
          (1) Plan identifying measure development priorities 
        and timelines.--
                  (A) Draft measure development plan.--
                          (i) Draft plan.--
                                  (I) In general.--Not later 
                                than October 1, 2014, 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.
                                  (II) Requirement.--Such plan 
                                shall address how measures used 
                                by private payers and 
                                integrated delivery systems 
                                could be incorporated under 
                                such subsection.
                          (ii) Consideration.--In developing 
                        the draft plan under subparagraph (A), 
                        the Secretary shall consider--
                                  (I) gap analyses conducted by 
                                the entity with a contract 
                                under section 1890(a) or other 
                                contractors or entities; and
                                  (II) whether measures are 
                                applicable across health care 
                                settings.
                          (iii) Priorities.--In developing the 
                        draft plan under subparagraph (A), 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.
                          (iv) Definition of applicable 
                        provisions.--In this subsection, the 
                        term ``applicable provisions'' means 
                        the following provisions:
                                  (I) Subsection (q)(2)(B)(i).
                                  (II) Section 1833(z)(2)(C).
                  (B) Stakeholder input.--The Secretary shall 
                accept through December 1, 2014, comments on 
                the draft plan posted under paragraph (1)(A) 
                from the public, including health care 
                providers, payers, consumers, and other 
                stakeholders.
                  (C) Operational measure development plan.--
                Not later than February 1, 2015, taking into 
                account the comments received under 
                subparagraph (B), the Secretary shall post on 
                the Internet website of the Centers for 
                Medicare & Medicaid Services an operational 
                plan for the development of quality measures 
                for use under subsection (q)(2)(A)(i).
          (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 quality 
                measures for application under the applicable 
                provisions. Such entities may include physician 
                specialty societies and other practitioner 
                organizations.
                  (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)(A)(iii).
                          (ii) Consideration.--In selecting 
                        measures for development under this 
                        subsection, the Secretary shall 
                        consider whether such measures would be 
                        electronically specified.
          (3) Annual report by the secretary.--
                  (A) In general.--Not later than February 1, 
                2016, 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 paragraph (1) shall include the 
                following:
                          (i) A description of the Secretary's 
                        efforts to implement this subsection.
                          (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) An update on the progress in 
                        developing the types of measures 
                        described in paragraph (1)(A)(iii), 
                        including a description of issues 
                        affecting such progress.
                          (v) A list of quality topics and 
                        concepts that are being considered for 
                        development of measures and the 
                        rationale for the selection of topics 
                        and concepts including their 
                        relationship to gap analyses.
                          (vi) 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.
                          (vii) Other information the Secretary 
                        determines to be appropriate.
          (4) Stakeholder input.--With respect to measures 
        applicable under the applicable provisions, 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)(A)(iii);
                  (B) prioritizing quality measure development 
                to address such gaps; and
                  (C) other areas related to quality measure 
                development determined appropriate by the 
                Secretary.
          (5) 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 2014 
        through 2018. Amounts transferred under this paragraph 
        shall remain available through the end of fiscal year 
        2021.
  (t) Public Reporting of Performance and Other Information on 
Physician Compare.--
          (1) In general.--
                  (A) Development.--Not later than January 1, 
                2011, the Secretary shall develop a Physician 
                Compare Internet website with information on 
                physicians enrolled in the program under this 
                title under section 1866(j) and other eligible 
                professionals who participate in the Physician 
                Quality Reporting Initiative under section 
                1848.
                  (B) Plan.--Not later than January 1, 2013, 
                and with respect to reporting periods that 
                begin no earlier than January 1, 2012, the 
                Secretary shall also implement a plan for 
                making publicly available through Physician 
                Compare, consistent with paragraph (3), 
                information on physician performance that 
                provides comparable information for the public 
                on quality and patient experience measures with 
                respect to physicians enrolled in the program 
                under this title under section 1866(j). To the 
                extent scientifically sound measures that are 
                developed consistent with the requirements of 
                this subsection are available, such 
                information, to the extent practicable, shall 
                include--
                          (i) measures collected under the 
                        Physician Quality Reporting Initiative;
                          (ii) an assessment of patient health 
                        outcomes and the functional status of 
                        patients;
                          (iii) an assessment of the continuity 
                        and coordination of care and care 
                        transitions, including episodes of care 
                        and risk-adjusted resource use;
                          (iv) an assessment of efficiency;
                          (v) an assessment of patient 
                        experience and patient, caregiver, and 
                        family engagement;
                          (vi) an assessment of the safety, 
                        effectiveness, and timeliness of care; 
                        and
                          (vii) other information as determined 
                        appropriate by the Secretary.
          (2) Other required considerations.--In developing and 
        implementing the plan described in paragraph (1)(B), 
        the Secretary shall, to the extent practicable, 
        include--
                  (A) processes to assure that data made 
                public, either by the Centers for Medicare & 
                Medicaid Services or by other entities, is 
                statistically valid and reliable, including 
                risk adjustment mechanisms used by the 
                Secretary;
                  (B) processes by which a physician or other 
                eligible professional whose performance on 
                measures is being publicly reported has a 
                reasonable opportunity, as determined by the 
                Secretary, to review his or her individual 
                results before they are made public;
                  (C) processes by the Secretary to assure that 
                the implementation of the plan and the data 
                made available on Physician Compare provide a 
                robust and accurate portrayal of a physician's 
                performance;
                  (D) data that reflects the care provided to 
                all patients seen by physicians, under both the 
                program under this title and, to the extent 
                practicable, other payers, to the extent such 
                information would provide a more accurate 
                portrayal of physician performance;
                  (E) processes to ensure appropriate 
                attribution of care when multiple physicians 
                and other providers are involved in the care of 
                a patient;
                  (F) processes to ensure timely statistical 
                performance feedback is provided to physicians 
                concerning the data reported under any program 
                subject to public reporting under this 
                subsection; and
                  (G) implementation of computer and data 
                systems of the Centers for Medicare & Medicaid 
                Services that support valid, reliable, and 
                accurate public reporting activities authorized 
                under this subsection.
          (3) Ensuring patient privacy.--The Secretary shall 
        ensure that information on physician performance and 
        patient experience is not disclosed under this 
        subsection in a manner that violates sections 552 or 
        552a of title 5, United States Code, with regard to the 
        privacy of individually identifiable health 
        information.
          (4) Feedback from multi-stakeholder groups.--The 
        Secretary shall take into consideration input provided 
        by multi-stakeholder groups, consistent with sections 
        1890(b)(7) and 1890A, in selecting quality measures for 
        use under this subsection.
          (5) Consideration of transition to value-based 
        purchasing.--In developing the plan under paragraph 
        (1)(B), the Secretary shall, as the Secretary 
        determines appropriate, consider the plan to transition 
        to a value-based purchasing program for physicians and 
        other practitioners developed under section 131 of the 
        Medicare Improvements for Patients and Providers Act of 
        2008.
          (6) Report to congress.--Not later than January 1, 
        2015, the Secretary shall submit to Congress a report 
        on the Physician Compare Internet website developed 
        under paragraph (1)(A). Such report shall include 
        information on the efforts of and plans made by the 
        Secretary to collect and publish data on physician 
        quality and efficiency and on patient experience of 
        care in support of value-based purchasing and consumer 
        choice, together with recommendations for such 
        legislation and administrative action as the Secretary 
        determines appropriate.
          (7) Expansion.--At any time before the date on which 
        the report is submitted under paragraph (6), the 
        Secretary may expand (including expansion to other 
        providers of services and suppliers under this title) 
        the information made available on such website.
          (8) Financial incentives to encourage consumers to 
        choose high quality providers.--The Secretary may 
        establish a demonstration program, not later than 
        January 1, 2019, to provide financial incentives to 
        Medicare beneficiaries who are furnished services by 
        high quality physicians, as determined by the Secretary 
        based on factors in clauses (i) through (vii) of 
        paragraph (1)(B). In no case may Medicare beneficiaries 
        be required to pay increased premiums or cost sharing 
        or be subject to a reduction in benefits under this 
        title as a result of such demonstration program. The 
        Secretary shall ensure that any such demonstration 
        program does not disadvantage those beneficiaries 
        without reasonable access to high performing physicians 
        or create financial inequities under this title.
          (9) Public availability of eligible professional 
        claims data.--
                  (A) In general.--The Secretary shall make 
                publicly available on Physician Compare the 
                information described in subparagraph (B) with 
                respect to eligible professionals.
                  (B) Information described.--The following 
                information, with respect to an eligible 
                professional, is described in this 
                subparagraph:
                          (i) Information on the number of 
                        services furnished by the eligible 
                        professional, which may include 
                        information on the most frequent 
                        services furnished or groupings of 
                        services.
                          (ii) Information on submitted charges 
                        and payments for services under this 
                        part.
                          (iii) A unique identifier for the 
                        eligible professional that is available 
                        to the public, such as a national 
                        provider identifier.
                  (C) Searchability.--The information made 
                available under this paragraph shall be 
                searchable by at least the following:
                          (i) The specialty or type of the 
                        eligible professional.
                          (ii) Characteristics of the services 
                        furnished, such as volume or groupings 
                        of services.
                          (iii) The location of the eligible 
                        professional.
                  (D) 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.
                  (E) Implementation.--
                          (i) Initial implementation.--
                        Physician Compare shall include the 
                        information described in subparagraph 
                        (B)--
                                  (I) with respect to 
                                physicians, by not later than 
                                July 1, 2015; and
                                  (II) with respect to other 
                                eligible professionals, by not 
                                later than July 1, 2016.
                          (ii) Annual updating.--The 
                        information made available under this 
                        paragraph shall be updated on Physician 
                        Compare not less frequently than on an 
                        annual basis.
                  (F) Opportunity to review and submit 
                corrections.--The Secretary shall provide for 
                an opportunity for an eligible professional to 
                review, and submit corrections for, the 
                information to be made public with respect to 
                the eligible professional under this paragraph 
                prior to such information being made public.
          (10) Definitions.--In this subsection:
                  (A) Eligible professional.--The term 
                ``eligible professional'' has the meaning given 
                that term for purposes of the Physician Quality 
                Reporting Initiative under section 1848.
                  (B) Physician.--The term ``physician'' has 
                the meaning given that term in section 1861(r).
                  (C) Physician compare.--The term ``Physician 
                Compare'' means the Internet website developed 
                under paragraph (1)(A) (or a successor 
                website).

           *       *       *       *       *       *       *


Part E--Miscellaneous Provisions

           *       *       *       *       *       *       *


                             administration

  Sec. 1874. (a) * * *

           *       *       *       *       *       *       *

  (e) Availability of [Medicare] Data.--
          (1) * * *

           *       *       *       *       *       *       *

          (3) Data described.--The data described in this 
        paragraph are standardized extracts (as determined by 
        the Secretary) of claims data under parts A, B, and D 
        for items and services furnished under such parts for 
        one or more specified geographic areas and time periods 
        requested by a qualified entity. Effective July 1, 
        2014, if the Secretary determines appropriate, the data 
        described in this paragraph may also include 
        standardized extracts (as determined by the Secretary) 
        of claims data under titles XIX and XXI for assistance 
        provided under such titles for one or more specified 
        geographic areas and time periods requested by a 
        qualified entity. The Secretary shall take such actions 
        as the Secretary deems necessary to protect the 
        identity of individuals entitled to or enrolled for 
        benefits under such parts or under titles XIX or XXI.
          (4) Requirements.--
                  (A) Fee.--Data described in paragraph (3) 
                shall be made available to a qualified entity 
                under this subsection at a fee equal to the 
                cost of making such data available. Any fee 
                collected pursuant to the preceding sentence 
                shall be deposited, for periods prior to July 
                1, 2014, into the Federal Supplementary Medical 
                Insurance Trust Fund under section 1841, and, 
                beginning July 1, 2014, into the Centers for 
                Medicare & Medicaid Services Program Management 
                Account.

           *       *       *       *       *       *       *

          (5) Expansion of uses of claims data by qualified 
        entities.--
                  (A) Expansion.--To the extent consistent with 
                applicable information, privacy, security, and 
                disclosure laws, beginning July 1, 2014, 
                notwithstanding paragraph (4)(B) (other than 
                clause (iii) of such paragraph) and the second 
                sentence of paragraph (4)(D), a qualified 
                entity may, as determined appropriate by the 
                Secretary, do any or all of the following:
                          (i)(I) Use the combined data 
                        described in paragraph (4)(B)(iii) to 
                        conduct analyses, other than for 
                        reports described in paragraph (4), for 
                        entities described in subparagraph (B) 
                        for non-public uses, as determined 
                        appropriate by the Secretary, such as 
                        for the purposes described in subclause 
                        (II).
                          (II) The purposes described in this 
                        subclause are assisting providers of 
                        services and suppliers in developing 
                        and participating in quality and 
                        patient care improvement activities 
                        (including developing new models of 
                        care), population health management, 
                        and disease monitoring, and the 
                        purposes described in subparagraph (C).
                          (ii) Provide or sell such analyses to 
                        entities described in subparagraph (B).
                          (iii) Provide entities described in 
                        clauses (i), (ii), (v), and (vi) of 
                        subparagraph (B) with access to the 
                        combined data described in paragraph 
                        (4)(B)(iii) through a qualified data 
                        enclave (as defined in subparagraph 
                        (F)) that is maintained by the 
                        qualified entity in order for entities 
                        described in such clauses to conduct 
                        analyses for non-public uses, such as 
                        for the purposes described in clause 
                        (i)(II).
                  (B) Entities described.--For the purpose of 
                subparagraph (A) clauses (i) and (ii), the 
                entities described in this subparagraph are the 
                following:
                          (i) A provider of services.
                          (ii) A supplier.
                          (iii) Subject to subparagraph (C), an 
                        employer (as defined in section 3(5) of 
                        the Employee Retirement Insurance 
                        Security Act of 1974).
                          (iv) A health insurance issuer (as 
                        defined in section 2791 of the Public 
                        Health Service Act) that provides data 
                        under paragraph (4)(B)(iii).
                          (v) A medical society or hospital 
                        association.
                          (vi) Other entities approved by the 
                        Secretary (other than an employer (as 
                        so defined) and a health insurance 
                        issuer (as so defined)).
                  (C) Limitation with respect to employers.--
                Any analyses provided or sold under this 
                paragraph to an employer (as so defined) may 
                only be used by such employer for purposes of 
                providing health insurance to employees and 
                retirees of the employer.
                  (D) Protection of patient identification.--
                          (i) In general.--Except as provided 
                        in clause (ii), an analysis provided or 
                        sold under this paragraph shall not 
                        contain information that individually 
                        identifies a patient.
                          (ii) Information on patients of the 
                        provider of services or supplier.--An 
                        analysis that is provided or sold under 
                        this paragraph to a provider of 
                        services or supplier may contain data 
                        that individually identifies a patient 
                        of such provider or supplier but only 
                        with respect to items and services 
                        furnished by such provider or supplier 
                        to such patient.
                          (iii) Opportunity for providers of 
                        services and suppliers to review.--
                        Prior to a qualified entity providing 
                        or selling an analysis under this 
                        paragraph to an entity described in 
                        subparagraph (B), to the extent that 
                        such analysis would individually 
                        identify a provider of services or 
                        supplier who is not being provided or 
                        sold such analysis, such qualified 
                        entity shall provide an opportunity for 
                        such provider or supplier to review and 
                        submit corrections to such analysis.
                  (E) No redisclosure.--An entity described in 
                subparagraph (B) that is provided or sold an 
                analysis under this paragraph shall not 
                redisclose or make public such an analysis.
                  (F) Requirements for a qualified data 
                enclave.--
                          (i) Definition.--For purposes of this 
                        paragraph, the term ``qualified data 
                        enclave'' means a data enclave that the 
                        Secretary determines meets the 
                        following:
                                  (I) The data enclave is a 
                                web-based portal or comparable 
                                mechanism.
                                  (II) Subject to the 
                                requirements described in 
                                clause (ii) and such other 
                                requirements as the Secretary 
                                may specify, the data enclave 
                                is capable of providing access 
                                to the combined data described 
                                in subparagraph (A)(iii).
                          (ii) Enclave access requirements.--
                        The requirements described in this 
                        clause are the following:
                                  (I) A qualified data enclave 
                                shall preclude any entity that 
                                obtains access to the data from 
                                removing or extracting the data 
                                from such enclave.
                                  (II) Subject to the 
                                succeeding sentence, the 
                                enclave shall preclude access 
                                to data that individually 
                                identifies a patient, including 
                                data on the patient's name and 
                                date of birth and such other 
                                data as the Secretary shall 
                                specify. Such data enclave may 
                                provide providers of services 
                                and suppliers with access to 
                                such individually identifiable 
                                patient data but only with 
                                respect to items and services 
                                furnished by such provider or 
                                supplier to such patient.
                                  (III) Access to data in the 
                                enclave shall not be provided 
                                to any entity unless the 
                                qualified entity and the entity 
                                have entered into a data use 
                                agreement, the terms of which 
                                contain the requirements of 
                                this paragraph and such other 
                                terms the Secretary may 
                                specify.
                  (G) Annual reports.--Any qualified entity 
                that provides or sells analyses pursuant to 
                subparagraph (A)(ii) or provides access to a 
                qualified data enclave pursuant to subparagraph 
                (A)(iii) shall annually submit to the Secretary 
                a report that includes--
                          (i) a summary of the analyses 
                        provided or sold, including the number 
                        of such analyses, the number of 
                        purchasers of such analyses, and the 
                        total amount of fees received for such 
                        analyses;
                          (ii) a description of the topics and 
                        purposes of such analyses;
                          (iii) information on the entities who 
                        obtained access to the qualified data 
                        enclave, the uses of the data, and the 
                        total amount of fees received for 
                        providing such access; and
                          (iv) other information determined 
                        appropriate by the Secretary.

           *       *       *       *       *       *       *


          payment to hospitals for inpatient hospital services

  Sec. 1886. (a) * * *

           *       *       *       *       *       *       *

  (n) Incentives for Adoption and Meaningful Use of Certified 
EHR Technology.--
          (1) * * *

           *       *       *       *       *       *       *

          (3) Meaningful ehr user.--
                  (A) In general.--For purposes of paragraph 
                (1), an eligible hospital shall be treated as a 
                meaningful EHR user for an EHR reporting period 
                for a payment year (or, for purposes of 
                subsection (b)(3)(B)(ix), for an EHR reporting 
                period under such subsection for a fiscal year) 
                if each of the following requirements are met:
                          (i) * * *
                          (ii) Information exchange.--The 
                        eligible hospital 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 hospital 
                        demonstrates (through a process 
                        specified by the Secretary, such as the 
                        use of an attestation referred to in 
                        section 1848(o)(2)(A)(ii)) that the 
                        hospital has not and will not take any 
                        deliberate action to limit or restrict 
                        the use, compatibility, or 
                        interoperability of the certified EHR 
                        technology.

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           PATIENT PROTECTION AND AFFORDABLE HEALTH CARE ACT

(Public Law 111-148)

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    TITLE X--STRENGTHENING QUALITY, AFFORDABLE HEALTH CARE FOR ALL 
AMERICANS

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Subtitle C--Provisions Relating to Title III

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[SEC. 10331. PUBLIC REPORTING OF PERFORMANCE INFORMATION.

  [(a) In general.--
          [(1) Development.--Not later than January 1, 2011, 
        the Secretary shall develop a Physician Compare 
        Internet website with information on physicians 
        enrolled in the Medicare program under section 1866(j) 
        of the Social Security Act (42 U.S.C. 1395cc(j)) and 
        other eligible professionals who participate in the 
        Physician Quality Reporting Initiative under section 
        1848 of such Act (42 U.S.C. 1395w-4).
          [(2) Plan.--Not later than January 1, 2013, and with 
        respect to reporting periods that begin no earlier than 
        January 1, 2012, the Secretary shall also implement a 
        plan for making publicly available through Physician 
        Compare, consistent with subsection (c), information on 
        physician performance that provides comparable 
        information for the public on quality and patient 
        experience measures with respect to physicians enrolled 
        in the Medicare program under such section 1866(j). To 
        the extent scientifically sound measures that are 
        developed consistent with the requirements of this 
        section are available, such information, to the extent 
        practicable, shall include--
                  [(A) measures collected under the Physician 
                Quality Reporting Initiative;
                  [(B) an assessment of patient health outcomes 
                and the functional status of patients;
                  [(C) an assessment of the continuity and 
                coordination of care and care transitions, 
                including episodes of care and risk-adjusted 
                resource use;
                  [(D) an assessment of efficiency;
                  [(E) an assessment of patient experience and 
                patient, caregiver, and family engagement;
                  [(F) an assessment of the safety, 
                effectiveness, and timeliness of care; and
                  [(G) other information as determined 
                appropriate by the Secretary.
  [(b) Other required considerations.--In developing and 
implementing the plan described in subsection (a)(2), the 
Secretary shall, to the extent practicable, include--
          [(1) processes to assure that data made public, 
        either by the Centers for Medicare & Medicaid Services 
        or by other entities, is statistically valid and 
        reliable, including risk adjustment mechanisms used by 
        the Secretary;
          [(2) processes by which a physician or other eligible 
        professional whose performance on measures is being 
        publicly reported has a reasonable opportunity, as 
        determined by the Secretary, to review his or her 
        individual results before they are made public;
          [(3) processes by the Secretary to assure that the 
        implementation of the plan and the data made available 
        on Physician Compare provide a robust and accurate 
        portrayal of a physician's performance;
          [(4) data that reflects the care provided to all 
        patients seen by physicians, under both the Medicare 
        program and, to the extent practicable, other payers, 
        to the extent such information would provide a more 
        accurate portrayal of physician performance;
          [(5) processes to ensure appropriate attribution of 
        care when multiple physicians and other providers are 
        involved in the care of a patient;
          [(6) processes to ensure timely statistical 
        performance feedback is provided to physicians 
        concerning the data reported under any program subject 
        to public reporting under this section; and
          [(7) implementation of computer and data systems of 
        the Centers for Medicare & Medicaid Services that 
        support valid, reliable, and accurate public reporting 
        activities authorized under this section.
  [(c) Ensuring patient privacy.--The Secretary shall ensure 
that information on physician performance and patient 
experience is not disclosed under this section in a manner that 
violates sections 552 or 552a of title 5, United States Code, 
with regard to the privacy of individually identifiable health 
information.
  [(d) Feedback from multi-stakeholder groups.--The Secretary 
shall take into consideration input provided by multi-
stakeholder groups, consistent with sections 1890(b)(7) and 
1890A of the Social Security Act, as added by section 3014 of 
this Act, in selecting quality measures for use under this 
section.
  [(e) Consideration of transition to value-based purchasing.--
In developing the plan under this subsection (a)(2), the 
Secretary shall, as the Secretary determines appropriate, 
consider the plan to transition to a value-based purchasing 
program for physicians and other practitioners developed under 
section 131 of the Medicare Improvements for Patients and 
Providers Act of 2008 (Public Law 110-275).
  [(f) Report to Congress.--Not later than January 1, 2015, the 
Secretary shall submit to Congress a report on the Physician 
Compare Internet website developed under subsection (a)(1). 
Such report shall include information on the efforts of and 
plans made by the Secretary to collect and publish data on 
physician quality and efficiency and on patient experience of 
care in support of value-based purchasing and consumer choice, 
together with recommendations for such legislation and 
administrative action as the Secretary determines appropriate.
  [(g) Expansion.--At any time before the date on which the 
report is submitted under subsection (f), the Secretary may 
expand (including expansion to other providers of services and 
suppliers under title XVIII of the Social Security Act) the 
information made available on such website.
  [(h) Financial incentives to encourage consumers to choose 
high quality providers.--The Secretary may establish a 
demonstration program, not later than January 1, 2019, to 
provide financial incentives to Medicare beneficiaries who are 
furnished services by high quality physicians, as determined by 
the Secretary based on factors in subparagraphs (A) through (G) 
of subsection (a)(2). In no case may Medicare beneficiaries be 
required to pay increased premiums or cost sharing or be 
subject to a reduction in benefits under title XVIII of the 
Social Security Act as a result of such demonstration program. 
The Secretary shall ensure that any such demonstration program 
does not disadvantage those beneficiaries without reasonable 
access to high performing physicians or create financial 
inequities under such title.
  [(i) Definitions.--In this section:
          [(1) Eligible professional.--The term ``eligible 
        professional'' has the meaning given that term for 
        purposes of the Physician Quality Reporting Initiative 
        under section 1848 of the Social Security Act (42 
        U.S.C. 1395w-4).
          [(2) Physician.--The term ``physician'' has the 
        meaning given that term in section 1861(r) of such Act 
        (42 U.S.C. 1395x(r)).
          [(3) Physician compare.--The term ``Physician 
        Compare'' means the Internet website developed under 
        subsection (a)(1).
          [(4) Secretary.--The term ``Secretary'' means the 
        Secretary of Health and Human Services.]

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