Sec. 104. Ensuring accurate valuation of services under the physician fee schedule

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Section 1848(c)(2) of the Social Security Act ( 42 U.S.C. 1395w–4(c)(2) ) is amended by adding at the end the following new subparagraph: 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. 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. The types of information described in clauses

(i)and

(ii)may, at the Secretary’s discretion, include any or all of the following: Time involved in furnishing services. Amounts and types of practice expense inputs involved with furnishing services. Prices (net of any discounts) for practice expense inputs, which may include paid invoice prices or other documentation or records. Overhead and accounting information for practices of physicians and other suppliers. Any other element that would improve the valuation of services under this section. Information may be collected or obtained pursuant to this subparagraph from any or all of the following: Surveys of physicians, other suppliers, providers of services, manufacturers, and vendors. Surgical logs, billing systems, or other practice or facility records. Electronic health records. Any other mechanism determined appropriate by the Secretary. 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. 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. 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. 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. Chapter 35 of title 44, United States Code, shall not apply to information collected or obtained under this subparagraph. In this subparagraph, the term eligible professional has the meaning given such term in subsection (k)(3)(B). 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. . Section 1848(i)(1) of the Social Security Act ( 42 U.S.C. 1395w–4(i)(1) ) is amended— in subparagraph (D), by striking and at the end; in subparagraph (E), by striking the period at the end and inserting , and ; and by adding at the end the following new subparagraph: the collection and use of information in the determination of relative values under subsection (c)(2)(M). . Section 1848(c)(2) of the Social Security Act ( 42 U.S.C. 1395w–4(c)(2) ), as amended by subsection (a), is amended by adding at the end the following new subparagraph: 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). . Section 1848(c)(2)(K)(ii) of the Social Security Act ( 42 U.S.C. 1395w–4(c)(2)(K)(ii) ) is amended to read as follows: 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: Codes that have experienced the fastest growth. Codes that have experienced substantial changes in practice expenses. 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. Codes which are multiple codes that are frequently billed in conjunction with furnishing a single service. Codes with low relative values, particularly those that are often billed multiple times for a single treatment. Codes that have not been subject to review since implementation of the fee schedule. Codes that account for the majority of spending under the physician fee schedule. Codes for services that have experienced a substantial change in the hospital length of stay or procedure time. Codes for which there may be a change in the typical site of service since the code was last valued. Codes for which there is a significant difference in payment for the same service between different sites of service. Codes for which there may be anomalies in relative values within a family of codes. Codes for services where there may be efficiencies when a service is furnished at the same time as other services. Codes with high intra-service work per unit of time. Codes with high practice expense relative value units. Codes with high cost supplies. Codes as determined appropriate by the Secretary. . Section 1848(c)(2) of the Social Security Act ( 42 U.S.C. 1395w–4(c)(2) ), as amended by subsections

(a)and (b), is amended by adding at the end the following new subparagraph: With respect to fee schedules established for each of 2015 through 2018, the following shall apply: 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. 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— 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 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. If the estimated net reduction in expenditures determined under clause

(i)for the year is less than the target for the year, reduced expenditures in an amount equal to the target recapture amount shall not be taken into account in applying subparagraph (B)(ii)(II) with respect to fee schedules beginning with 2015. For purposes of clause (iii), the target recapture amount is, with respect to a year, an amount equal to the difference between— the target for the year; and the estimated net reduction in expenditures determined under clause

(i)for the year. For purposes of this subparagraph, with respect to a year, the target is calculated as 0.5 percent of the estimated amount of expenditures under the fee schedule under this section for the year. . Section 1848(c)(2)(B)(v) of the Social Security Act ( 42 U.S.C. 1395w–4(c)(2)(B)(v) ) is amended by adding at the end the following new subclause: Effective for fee schedules beginning with 2015, reduced expenditures attributable to the application of the target recapture amount described in subparagraph (O)(iii). . Section 1848(c) of the Social Security Act ( 42 U.S.C. 1395w–4(c) ) is amended by adding at the end the following new paragraph: Effective for fee schedules established beginning with 2015, if the total relative value units for a service for a year would otherwise be decreased by an estimated amount equal to or greater than 20 percent as compared to the total relative value units for the previous year, the applicable adjustments in work, practice expense, and malpractice relative value units shall be phased-in over a 2-year period. . Section 1848(c)(2) of the Social Security Act ( 42 U.S.C. 1395w–4(c)(2) ) is amended— in subparagraph (B)(ii)(I), by striking subclause

(II)and inserting subclause

(II)and paragraph

(7); and in subparagraph (K)(iii)(VI)— by striking provisions of subparagraph (B)(ii)(II) and inserting provisions of subparagraph (B)(ii)(II) and paragraph

(7); and by striking under subparagraph (B)(ii)(II) and inserting under subparagraph (B)(ii)(I) . Section 1848(c)(2)(C) of the Social Security Act ( 42 U.S.C. 1395w–4(c)(2)(C) ) is amended— in each of clauses

(i)and (iii), by striking the service and inserting the service or group of services each place it appears; and in the first sentence of clause (ii), by inserting or group of services before the period. The Comptroller General of the United States (in this subsection referred to as the Comptroller General ) shall conduct a study of the processes used by the Relative Value Scale Update Committee

(RUC)to provide recommendations to the Secretary of Health and Human Services regarding relative values for specific services under the Medicare physician fee schedule under section 1848 of the Social Security Act (42 U.S.C. 1395w–4). Not later than 1 year after the date of the enactment of this Act, the Comptroller General shall submit to Congress a report containing the results of the study conducted under paragraph (1). Section 1848(e) of the Social Security Act ( 42 U.S.C. 1395w–4(e) ) is amended by adding at the end the following new paragraph: 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: 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. All areas not included in an MSA shall be treated as a single rest-of-State fee schedule area. 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: 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. 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). The old weighting factor described in this clause— for 2017, is 5/6 ; and for each succeeding year, is the old weighting factor described in this clause for the previous year minus 1/6 . 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. 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. In this paragraph, the term transition area means each of the following fee schedule areas for 2013: The rest-of-State payment locality. Payment locality 3. 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. . Section 1848(j)(2) of the Social Security Act ( 42 U.S.C. 1395w–4(j)(2) ) is amended by striking The term and inserting Except as provided in subsection (e)(6)(D), the term . The Secretary of Health and Human Services shall make publicly available the information used to establish the multiple procedure payment reduction policy to the professional component of imaging services in the final rule published in the Federal Register, v. 77, n. 222, November 16, 2012, pages 68891–69380 under the physician fee schedule under section 1848 of the Social Security Act ( 42 U.S.C. 1395w–4 ).

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42 USC 1395w–4(c)(2)
42 USC 1395w–4(i)(1)
42 USC 1395w–4(c)(2)(K)(ii)
42 USC 1395w–4(c)(2)(B)(v)
42 USC 1395w–4(c)
42 USC 1395w–4(c)(2)(C)
42 USC 1395w–4
42 USC 1395w–4(e)
42 USC 1395w–4(j)(2)

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Sec. 104

Ensuring accurate valuation of services under the physician fee schedule

Cite42 USC 1395w–4(c)(2)

Cite42 USC 1395w–4(i)(1)

Cite42 USC 1395w–4(c)(2)(K)(ii)

Cite42 USC 1395w–4(c)(2)(B)(v)

Cite42 USC 1395w–4(c)

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