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                                                      Calendar No. 185
114th Congress      }                                   {       Report
                                 SENATE
 1st Session        }                                   {      114-106

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



 
                 ELECTRONIC HEALTH FAIRNESS ACT OF 2015

                                _______
                                

                 July 30, 2015.--Ordered to be printed

                                _______
                                

               Mr. Hatch, from the Committee on Finance, 
                        submitted the following

                              R E P O R T

                         [To accompany S. 1347]

    The Committee on Finance, to which was referred the bill 
(S. 1347) to amend title XVIII of the Social Security Act with 
respect to the treatment of patient encounters in ambulatory 
surgical centers in determining meaningful EHR use, and for 
other purposes, having considered the same, reports favorably 
thereon with an amendment and recommends that the bill, as 
amended, do pass.

                       I. LEGISLATIVE BACKGROUND


Background and need for legislative action

    The Health Information Technology for Economic and Clinical 
Health (HITECH) Act of 2009 authorized Medicare and Medicaid 
incentive payments to promote the use of electronic health 
record (EHR) technology. Physicians and other professionals, 
collectively referred to as ``eligible professionals'', and 
eligible hospitals qualify for incentive payments under the 
HITECH Act if they become meaningful users of certified EHR 
technology (CEHRT). In order to demonstrate meaningful EHR use, 
participants must attest to using their EHR systems to meet a 
series of objectives (and associated measures); for example, 
capturing and sharing patient data, electronic prescribing, and 
exchanging summary of care information with other health care 
providers.
    Eligible professionals who demonstrate meaningful CEHRT use 
can receive up to $43,720 in Medicare incentive payments over 
five years. Beginning in 2015, eligible professionals who do 
not successfully demonstrate meaningful use will be subject to 
a payment adjustment which reduces their Part B reimbursement 
for covered professional services furnished for the year; 
payment reductions can range from 1 percent to 5 percent. 
Through The Medicare Access and CHIP Reauthorization Act of 
2015 (MACRA), the existing Medicare meaningful use payment 
adjustments for eligible professionals who fail to meaningfully 
use CEHRT, sunset in 2018. The payment adjustment remains 
unchanged for hospitals. Thereafter, meaningful use will be 
used as one of the components of the composite score under the 
Merit-based Incentive Payment System (MIPS) program established 
by MACRA.
    To qualify for Medicare EHR incentive payments, the 
Secretary determined eligible professionals as those who 
furnish at least 50 percent of their patient encounters during 
the reporting period in locations with CEHRT. HITECH excluded 
physicians from the incentive program who furnish 
``substantially all'' of their services in an inpatient 
hospital or hospital emergency department using CEHRT. The 
Secretary has determined that patient encounters furnished in 
an ambulatory surgical center (ASC), by an eligible 
professional, are included in the denominator when the payment 
adjustment is being calculated. Under HITECH, however, ASC 
facilities are not eligible for the Medicare EHR incentive 
program. As a result, eligible professionals furnishing 
services in an ASC are more likely to receive a payment 
adjustment because ASCs are not required to have the 
technology. Moreover, producing ASC-specific EHR technology has 
not been a vendor priority; additionally, certification of ASC-
specific technology is not included in the Office of the 
National Coordinator (ONC) certification process.

                      II. EXPLANATION OF THE BILL


                              PRESENT LAW

In general

    Under Section 1848(o)(2) of title XVIII of the Social 
Security Act,\1\ Medicare provides incentive payments to 
hospitals and eligible professionals who become ``meaningful 
users'' of certified electronic health technology. Beginning in 
2015, eligible professionals who are not meaningful users may 
be subject to a Medicare payment adjustment (penalty).
---------------------------------------------------------------------------
    \1\Pub. L. No. 74-271.
---------------------------------------------------------------------------

                           REASONS FOR CHANGE

    The Committee recognizes the importance of the Medicare 
``meaningful use'' incentive program to advance the goal of 
providers acquiring electronic health records as a tool to 
provide high quality, more coordinated care. Although HITECH 
requires professionals (and hospitals) to use certified EHR 
technology to receive incentive payments and avoid payment 
reductions, HITECH did not include ASC facilities in the 
Medicare EHR incentive program. Therefore, development of EHR 
products specifically for the ASC setting has not been a vendor 
priority, nor has it been included in the certification 
process. Therefore, providers in ASC facilities should not be 
disadvantaged in the program.

                        EXPLANATION OF PROVISION

    The bill, as modified by the Committee, would exclude ASC 
services from being counted toward the 50 percent meaningful 
use eligibility threshold until CEHRT applicable to the ASC 
setting is available. This exclusion would end three years 
after the Secretary, by rulemaking, determines that CEHRT 
applicable to the ASC setting is available.

Effective date

    The provision applies upon enactment of the bill.

                    III. BUDGET EFFECTS OF THE BILL


                         A. Committee Estimates

    In compliance with paragraph 11(a) of rule XXVI of the 
Standing Rules of the Senate, the following statement is made 
concerning the estimated budget effects of the revenue 
provisions of the ``Electronic Health Fairness Act of 2015'' as 
reported.
    The bill is estimated to have the following effects on 
Federal budget receipts for fiscal years 2016-2025:

                                                                      Fiscal Years
                                                                  [Millions of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
      2015          2016       2017       2018       2019       2020       2021       2022       2023       2024       2025       2016-20      2016-25
--------------------------------------------------------------------------------------------------------------------------------------------------------
        - - -           2          5          6          2          0          0          0          0          0          0            15           15
--------------------------------------------------------------------------------------------------------------------------------------------------------
NOTE: Details do not add to totals due to rounding.
Source: Estimate provided by the staff of the Congressional Budget Office.

                B. Budget Authority and Tax Expenditures


Budget authority

    In compliance with section 308(a)(1) of the Congressional 
Budget and Impoundment Control Act of 1974 (``Budget Act''),\2\ 
the Committee states that no provisions of the bill as reported 
involve new or increased budget authority.
---------------------------------------------------------------------------
    \2\Pub. L. No. 93-344.
---------------------------------------------------------------------------

Tax expenditures

    In compliance with section 308(a)(1) of the Budget Act, the 
Committee states that the revenue-reducing provisions of the 
bill involve increased tax expenditures (see revenue table in 
Part A, above).

               CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

S. 1347--Electronic Health Fairness Act of 2015

    Summary: Under current law, a physician or other 
professional may be subject to payment reductions for services 
furnished to Medicare beneficiaries if the provider fails to 
achieve ``meaningful use'' of electronic health record (EHR) 
technology. The meaningful use standard requires that at least 
half of the provider's patient encounters occur in a setting 
that uses certified EHR technology. S. 1347 would temporarily 
exclude services furnished in an ambulatory surgical center 
(ASC) from being included in the count of patient encounters 
for the purpose of determining whether a provider achieves 
meaningful use of EHR technology.
    CBO estimates that enacting S. 1347 would increase direct 
spending by $15 million over the fiscal year 2016-2025 period. 
Pay-as-you-go procedures apply because enacting the legislation 
would affect direct spending. The legislation would not affect 
revenues.
    S. 1347 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA).
    Estimated cost to the Federal Government: The estimated 
budgetary effect of enacting S. 1347 is shown in the following 
table. The costs of this legislation fall within budget 
function 570 (Medicare).

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                        By fiscal year, in millions of dollars--
---------------------------------------------------------------------------------------------------------------------------------------------------------
                       2016                          2017    2018    2019    2020    2021    2022    2023    2024    2025    2025   2016-2020  2016-2025
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               CHANGES IN DIRECT SPENDING
 
Estimated Budget Authority........................       2       5       6       2       0       0       0       0       0       0        15         15
Estimated Outlays.................................       2       5       6       2       0       0       0       0       0       0        15         15
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Basis of estimate: S. 1347 would amend the criteria used to 
determine whether an eligible professional achieves meaningful 
use of EHR technology. For physicians who fail to achieve 
meaningful use in one year, Medicare's payments for services 
furnished in the following year are reduced. Under current law, 
providers who fail to achieve meaningful use will be subject to 
a 2 percent reduction in Medicare payment rates in calendar 
year 2016 and a 3 percent reduction in 2017 and 2018. After 
2018, providers will not be subject to a payment reduction 
based on meaningful use of EHR technology.
    To qualify as a meaningful EHR user under current law, an 
eligible professional must conduct at least 50 percent of 
patient encounters at a place of service that is equipped with 
certified EHR technology. Many providers furnish services in 
more than one place of service (for example, a physician's 
office, hospital outpatient department, or an ASC). S. 1347 
would exclude services furnished at an ASC from being counted 
as patient encounters for the purpose of determining whether a 
provider satisfies the 50 percent threshold.
    Very few ASCs currently have EHR technology. As a result, 
S. 1347 would make it easier for professionals who furnish some 
of their services in the ASC setting to qualify as meaningful 
users of EHR technology. Based on analysis of the extent to 
which physicians provide a share of services in ASCs, CBO 
estimates that enacting S. 1347 would enable almost 2,000 
providers to avoid payment reductions that will average about 
$2,000 in 2016 and about $3,000 in both 2017 and 2018.
    Enacting S. 1347 would affect the determination of 
meaningful use beginning with services furnished during 2015, 
and would affect payments beginning in 2016. As a result, CBO 
estimates that enacting S. 1347 would increase spending during 
calendar years 2016 through 2018 (fiscal years 2016 through 
2019) by a total of $15 million.
    Pay-as-you-go considerations: The Statutory Pay-As-You-Go 
Act of 2010 establishes budget-reporting and enforcement 
procedures for legislation affecting direct spending or 
revenues. The net changes in outlays that are subject to those 
pay-as-you-go procedures are shown in the following table.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                              By fiscal year, in millions of dollars--
                                           -------------------------------------------------------------------------------------------------------------
                                             2015    2016    2017    2018    2019    2020    2021    2022    2023    2024    2025   2015-2020  2015-2025
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               NET INCREASE IN THE DEFICIT
 
Statutory Pay-As-You-Go Impact............       0       2       5       6       2       0       0       0       0       0       0        15         15
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Intergovernmental and private-sector impact: S. 1347 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would impose no costs on state, local, or 
tribal governments.
    Previous estimate: On March 12, 2015, CBO provided a cost 
estimate for H.R. 887, as ordered reported by the House Ways 
and Means Committee on February 26, 2015. The two versions of 
the bill are almost identical, except that S. 1347 specifies 
that the change in meaningful use determination would go into 
effect after 2015, which would affect spending beginning in 
2016. H.R. 887, by contrast, did not specify an effective date. 
CBO's estimate for H.R. 887 anticipated that the change in 
spending would take effect in 2017--after a rulemaking process.
    The estimated budgetary effects also differ because of 
changes in the Medicare Access and CHIP Reauthorization Act, 
enacted on April 16, 2015. That legislation eliminated payment 
adjustments for eligible professionals after payment year 2018 
and increased payment rates for physicians' services.
    Estimate prepared by: Federal costs: Zoe Williams Impact on 
state, local, and tribal Governments: J'Nell Blanco Suchy; 
Impact on the Private Sector: Amy Petz.
    Estimate approved by: Holly Harvey, Deputy Assistant 
Director for Budget Analysis.

                       IV. VOTES OF THE COMMITTEE

    In compliance with paragraph 7(b) of Rule XXVI of the 
standing rules of the Senate, the Committee states that, with a 
majority present, the ``Electronic Health Fairness Act of 
2015,''--as modified, was ordered favorably reported on June 
24, 2015 as follows:
    Final Passage of ``The Electronic Health Fairness Act of 
2015'' approved, as modified, by voice vote.

                 V. REGULATORY IMPACT AND OTHER MATTERS


                          A. Regulatory Impact

    Pursuant to paragraph 11(b) of Rule XXVI of the Standing 
Rules of the Senate, the Committee makes the following 
statement concerning the regulatory impact that might be 
incurred in carrying out the provisions of the bill as amended.

Impact on individuals and businesses, personal privacy and paperwork

    The bill is not expected to impose additional 
administrative requirements or regulatory burdens on 
individuals. The bill is expected to reduce administrative 
requirements and regulatory burdens on some businesses.
    The provisions of the bill do not impact personal privacy.

                     B. Unfunded Mandates Statement

    This information is provided in accordance with section 423 
of the Unfunded Mandates Reform Act of 1995 (Pub. L. No. 104-
4).
    The Committee has determined that the bill does not contain 
any private sector mandates. The Committee has determined that 
the bill contains no intergovernmental mandate.

       VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

    In the opinion of the Committee, it is necessary in order 
to expedite the business of the Senate, to dispense with the 
requirements of paragraph 12 of Rule XXVI of the Standing Rules 
of the Senate (relating to the showing of changes in existing 
law made by the bill as reported by the Committee).

                                  [all]