Sec. 220. ENSURING ACCURATE VALUATION OF SERVICES UNDER THE PHYSICIAN FEE SCHEDULE
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## SEC. 220 ENSURING ACCURATE VALUATION OF SERVICES UNDER THE PHYSICIAN FEE SCHEDULE ###
(a)Authority To Collect and Use Information on Physicians’ Services in the Determination of Relative Values ####
(1)In general Section 1848(c)(2) of the Social Security Act (42 U.S.C. 1395w-4(c)(2)) is amended by adding at the end the following new subparagraph: > > ##### “(M) Authority to collect and use information on physicians’ services in the determination of relative values > > > ###### “(i) Collection of information > > Notwithstanding any other provision of law, the Secretary may collect or obtain information on the resources directly or indirectly related to furnishing services for which payment is made under the fee schedule established under subsection (b). Such information may be collected or obtained from any eligible professional or any other source. > > > ###### “(ii) Use of information > > Notwithstanding any other provision of law, subject to clause (v), the Secretary may (as the Secretary determines appropriate) use information collected or obtained pursuant to clause
(i)in the determination of relative values for services under this section. > > > ###### “(iii) Types of information > > The types of information described in clauses
(i)and
(ii)may, at the Secretary’s discretion, include any or all of the following: > > > ###### “(I) > > Time involved in furnishing services. > > > ###### “(II) > > Amounts and types of practice expense inputs involved with furnishing services. > > > ###### “(III) > > Prices (net of any discounts) for practice expense inputs, which may include paid invoice prices or other documentation or records. > > > ###### “(IV) > > Overhead and accounting information for practices of physicians and other suppliers. > > > ###### “(V) > > Any other element that would improve the valuation of services under this section. > > > ###### “(iv) Information collection mechanisms > > Information may be collected or obtained pursuant to this subparagraph from any or all of the following: > > > ###### “(I) > > Surveys of physicians, other suppliers, providers of services, manufacturers, and vendors. > > > ###### “(II) > > Surgical logs, billing systems, or other practice or facility records. > > > ###### “(III) > > Electronic health records. > > > ###### “(IV) > > Any other mechanism determined appropriate by the Secretary. > > > ###### “(v) Transparency of use of information > > > ###### “(I) In general > > Subject to subclauses
(II)and (III), if the Secretary uses information collected or obtained under this subparagraph in the determination of relative values under this subsection, the Secretary shall disclose the information source and discuss the use of such information in such determination of relative values through notice and comment rulemaking. > > > ###### “(II) Thresholds for use > > The Secretary may establish thresholds in order to use such information, including the exclusion of information collected or obtained from eligible professionals who use very high resources (as determined by the Secretary) in furnishing a service. > > > ###### “(III) Disclosure of information > > The Secretary shall make aggregate information available under this subparagraph but shall not disclose information in a form or manner that identifies an eligible professional or a group practice, or information collected or obtained pursuant to a nondisclosure agreement. > > > ###### “(vi) Incentive to participate > > The Secretary may provide for such payments under this part to an eligible professional that submits such solicited information under this subparagraph as the Secretary determines appropriate in order to compensate such eligible professional for such submission. Such payments shall be provided in a form and manner specified by the Secretary. > > > ###### “(vii) Administration > > Chapter 35 of title 44, United States Code, shall not apply to information collected or obtained under this subparagraph. > > > ###### “(viii) Definition of eligible professional > > In this subparagraph, the term ‘eligible professional’ has the meaning given such term in subsection (k)(3)(B). > > > ###### “(ix) Funding > > For purposes of carrying out this subparagraph, in addition to funds otherwise appropriated, the Secretary shall provide for the transfer, from the Federal Supplementary Medical Insurance Trust Fund under section 1841, of $2,000,000 to the Centers for Medicare & Medicaid Services Program Management Account for each fiscal year beginning with fiscal year 2014. Amounts transferred under the preceding sentence for a fiscal year shall be available until expended.” > . ####
(2)Limitation on review Section 1848(i)(1) of the Social Security Act (42 U.S.C. 1395w-4(i)(1)) is amended— #####
(A)in subparagraph (D), by striking “and” at the end; #####
(B)in subparagraph (E), by striking the period at the end and inserting “, and”; and #####
(C)by adding at the end the following new subparagraph: > > ##### “(F) > > the collection and use of information in the determination of relative values under subsection (c)(2)(M).” > . ###
(b)Authority for alternative approaches to establishing practice expense relative values Section 1848(c)(2) of the Social Security Act (42 U.S.C. 1395w-4(c)(2)), as amended by subsection (a), is amended by adding at the end the following new subparagraph: > > ##### “(N) Authority for Alternative Approaches To Establishing Practice Expense Relative Values > > The Secretary may establish or adjust practice expense relative values under this subsection using cost, charge, or other data from suppliers or providers of services, including information collected or obtained under subparagraph (M).” > . ###
(c)Revised and Expanded Identification of Potentially Misvalued Codes Section 1848(c)(2)(K)(ii) of the Social Security Act (42 U.S.C. 1395w-4(c)(2)(K)(ii)) is amended to read as follows: > > ###### “(ii) Identification of potentially misvalued codes > > For purposes of identifying potentially misvalued codes pursuant to clause (i)(I), the Secretary shall examine codes (and families of codes as appropriate) based on any or all of the following criteria: > > > ###### “(I) > > Codes that have experienced the fastest growth. > > > ###### “(II) > > Codes that have experienced substantial changes in practice expenses. > > > ###### “(III) > > Codes that describe new technologies or services within an appropriate time period (such as 3 years) after the relative values are initially established for such codes. > > > ###### “(IV) > > Codes which are multiple codes that are frequently billed in conjunction with furnishing a single service. > > > ###### “(V) > > Codes with low relative values, particularly those that are often billed multiple times for a single treatment. > > > ###### “(VI) > > Codes that have not been subject to review since implementation of the fee schedule. > > > ###### “(VII) > > Codes that account for the majority of spending under the physician fee schedule. > > > ###### “(VIII) > > Codes for services that have experienced a substantial change in the hospital length of stay or procedure time. > > > ###### “(IX) > > Codes for which there may be a change in the typical site of service since the code was last valued. > > > ###### “(X) > > Codes for which there is a significant difference in payment for the same service between different sites of service. > > > ###### “(XI) > > Codes for which there may be anomalies in relative values within a family of codes. > > > ###### “(XII) > > Codes for services where there may be efficiencies when a service is furnished at the same time as other services. > > > ###### “(XIII) > > Codes with high intra-service work per unit of time. > > > ###### “(XIV) > > Codes with high practice expense relative value units. > > > ###### “(XV) > > Codes with high cost supplies. > > > ###### “(XVI) > > Codes as determined appropriate by the Secretary.” > . ###
(d)Target for relative value adjustments for misvalued services ####
(1)In general Section 1848(c)(2) of the Social Security Act (42 U.S.C. 1395w-4(c)(2)), as amended by subsections
(a)and (b), is amended by adding at the end the following new subparagraph: > > ##### “(O) Target for Relative Value Adjustments for Misvalued Services > > With respect to fee schedules established for each of 2017 through 2020, 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 2017. > > > ###### “(iv) Target recapture amount > > For purposes of clause (iii), the target recapture amount is, with respect to a year, an amount equal to the difference between— > > > ###### “(I) > > the target for the year; and > > > ###### “(II) > > the estimated net reduction in expenditures determined under clause
(i)for the year. > > > ###### “(v) Target > > For purposes of this subparagraph, with respect to a year, the target is calculated as 0.5 percent of the estimated amount of expenditures under the fee schedule under this section for the year.” > . ####
(2)Conforming amendment Section 1848(c)(2)(B)(v) of the Social Security Act (42 U.S.C. 1395w-4(c)(2)(B)(v)) is amended by adding at the end the following new subclause: > > ###### “(VIII) Reductions for misvalued services if target not met > > Effective for fee schedules beginning with 2017, reduced expenditures attributable to the application of the target recapture amount described in subparagraph (O)(iii).” > . ###
(e)Phase-in of significant relative value unit
(rvu)reductions ####
(1)In general Section 1848(c) of the Social Security Act (42 U.S.C. 1395w-4(c)) is amended by adding at the end the following new paragraph: > > #### “(7) Phase-In of Significant Relative Value Unit
(RVU)Reductions > > Effective for fee schedules established beginning with 2017, 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.” > . ####
(2)Conforming Amendments Section 1848(c)(2) of the Social Security Act (42 U.S.C. 1395w-4(c)(2)) is amended— #####
(A)in subparagraph (B)(ii)(I), by striking “subclause (II)” and inserting “subclause
(II)and paragraph (7)”; and #####
(B)in subparagraph (K)(iii)(VI)— ######
(i)by striking “provisions of subparagraph (B)(ii)(II)” and inserting “provisions of subparagraph (B)(ii)(II) and paragraph (7)”; and ######
(ii)by striking “under subparagraph (B)(ii)(II)” and inserting “under subparagraph (B)(ii)(I)”. ###
(f)Authority To Smooth Relative Values Within Groups of Services Section 1848(c)(2)(C) of the Social Security Act (42 U.S.C. 1395w-4(c)(2)(C)) is amended— ####
(1)in each of clauses
(i)and (iii), by striking “the service” and inserting “the service or group of services” each place it appears; and ####
(2)in the first sentence of clause (ii), by inserting “or group of services” before the period. ###
(g)GAO Study and Report on Relative Value Scale Update Committee ####
(1)Study The Comptroller General of the United States (in this subsection referred to as the “Comptroller General”) shall conduct a study of the processes used by the Relative Value Scale Update Committee
(RUC)to provide recommendations to the Secretary of Health and Human Services regarding relative values for specific services under the Medicare physician fee schedule under section 1848 of the Social Security Act (42 U.S.C. 1395w-4). ####
(2)Report Not later than 1 year after the date of the enactment of this Act, the Comptroller General shall submit to Congress a report containing the results of the study conducted under paragraph (1). ###
(h)Adjustment to Medicare Payment Localities ####
(1)In general Section 1848(e) of the Social Security Act (42 U.S.C. 1395w-4(e)) is amended by adding at the end the following new paragraph: > > #### “(6) Use of msas as fee schedule areas in california > > > ##### “(A) In general > > Subject to the succeeding provisions of this paragraph and notwithstanding the previous provisions of this subsection, for services furnished on or after January 1, 2017, the fee schedule areas used for payment under this section applicable to California shall be the following: > > > ###### “(i) > > Each Metropolitan Statistical Area (each in this paragraph referred to as an ‘MSA’), as defined by the Director of the Office of Management and Budget as of December 31 of the previous year, shall be a fee schedule area. > > > ###### “(ii) > > All areas not included in an MSA shall be treated as a single rest-of-State fee schedule area. > > > ##### “(B) Transition for msas previously in rest-of-state payment locality or in locality 3 > > > ###### “(i) In general > > For services furnished in California during a year beginning with 2017 and ending with 2021 in an MSA in a transition area (as defined in subparagraph (D)), subject to subparagraph (C), the geographic index values to be applied under this subsection for such year shall be equal to the sum of the following: > > > ###### “(I) Current law component > > The old weighting factor (described in clause (ii)) for such year multiplied by the geographic index values under this subsection for the fee schedule area that included such MSA that would have applied in such area (as estimated by the Secretary) if this paragraph did not apply. > > > ###### “(II) MSA-based component > > The MSA-based weighting factor (described in clause (iii)) for such year multiplied by the geographic index values computed for the fee schedule area under subparagraph
(A)for the year (determined without regard to this subparagraph). > > > ###### “(ii) Old weighting factor > > The old weighting factor described in this clause— > > > ###### “(I) > > for 2017, is ⅚; and > > > ###### “(II) > > for each succeeding year, is the old weighting factor described in this clause for the previous year minus ⅙. > > > ###### “(iii) MSA-based weighting factor > > The MSA-based weighting factor described in this clause for a year is 1 minus the old weighting factor under clause
(ii)for that year. > > > ##### “(C) Hold harmless > > For services furnished in a transition area in California during a year beginning with 2017, the geographic index values to be applied under this subsection for such year shall not be less than the corresponding geographic index values that would have applied in such transition area (as estimated by the Secretary) if this paragraph did not apply. > > > ##### “(D) Transition area defined > > In this paragraph, the term ‘transition area’ means each of the following fee schedule areas for 2013: > > > ###### “(i) > > The rest-of-State payment locality. > > > ###### “(ii) > > Payment locality 3. > > > ##### “(E) References to fee schedule areas > > Effective for services furnished on or after January 1, 2017, for California, any reference in this section to a fee schedule area shall be deemed a reference to a fee schedule area established in accordance with this paragraph.” > . ####
(2)Conforming amendment to definition of fee schedule area Section 1848(j)(2) of the Social Security Act (42 U.S.C. 1395w-4(j)(2)) is amended by striking “The term” and inserting “Except as provided in subsection (e)(6)(D), the term”.
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Sec. 220
ENSURING ACCURATE VALUATION OF SERVICES UNDER THE PHYSICIAN FEE SCHEDULE
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