Sec. 3007. VALUE-BASED PAYMENT MODIFIER UNDER THE PHYSICIAN FEE SCHEDULE

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## SEC. 3007 VALUE-BASED PAYMENT MODIFIER UNDER THE PHYSICIAN FEE SCHEDULE Section 1848 of the Social Security Act (42 U.S.C. 1395w–4) is amended— ####

(1)in subsection (b)(1), by inserting “subject to subsection (p),” after “1998,”; and ####

(2)by adding at the end the following new subsection: > > ### “(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). > > > #### “(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. > > > #### “(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— > > > ###### “(I) > > beginning on January 1, 2015, with respect to specific physicians and groups of physicians the Secretary determines appropriate; and > > > ###### “(II) > > beginning not later than January 1, 2017, with respect to all physicians and groups of physicians. > > > ##### “(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).” > .

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42 USC 1395w–4

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Sec. 3007

VALUE-BASED PAYMENT MODIFIER UNDER THE PHYSICIAN FEE SCHEDULE

Cite42 USC 1395w–4

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