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