SGR Repeal and Medicare Provider Payment Modernization Act of 2014

“(15) Update for 2014 through 2018—The update to the single conversion factor established in paragraph (1)(C) for 2014 and each subsequent year through 2018 shall be 0.5 percent.

“(16) Update for 2019 through 2023—The update to the single conversion factor established in paragraph (1)(C) for 2019 and each subsequent year through 2023 shall be zero percent.

“(17) Update for 2024 and subsequent years—The update to the single conversion factor established in paragraph (1)(C) for 2024 and each subsequent year shall be—

“(A) for items and services furnished by a qualifying APM participant (as defined in section 1833(z)(2)) for such year, 1.0 percent; and

“(B) for other items and services, 0.5 percent.”

“(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.

“(B) Program implementation—The MIPS shall apply to payments for items and services furnished on or after January 1, 2018.

“(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)), and 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) and 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 2018 and 2019, the reference in subparagraph (A) of such paragraph to 25 percent was instead a reference to 20 percent;

“(II) with respect to 2020 and 2021—

“(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 2022 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.

“(iii) Clarification—MIPS eligible professionals electing to be a virtual group under paragraph (5)(I) shall not be considered MIPS eligible professionals in a group practice for purposes of applying this subparagraph.

“(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(f)(1) of the SGR Repeal and Medicare Provider Payment Modernization Act of 2014, the Secretary, on an ongoing basis, shall estimate how an individual’s health status and other risk factors affect quality and resource use outcome measures and, as feasible, shall incorporate information from quality and resource use outcome measurement (including care episode and patient condition groups) into the MIPS.

“(ii) Accounting for other factors in payment adjustments—Taking into account the studies conducted and recommendations made in reports under section 2(f)(1) of the SGR Repeal and Medicare Provider Payment Modernization Act of 2014 and other information as appropriate, the Secretary shall account for identified factors with an effect on quality and resource use outcome measures when determining 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, which shall include activities such as same day appointments for urgent needs and after hours access to clinician advice.

“(II) The subcategory of population management, which shall include activities 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, which shall include activities 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, which shall include activities 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)).

“(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 emergency physicians.

“(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.

“(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 multispecialty 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 or a measure described in clause (i)(II)(cc) 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).

“(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 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 the year described in paragraph (1)(B)). 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 accreditation—A MIPS eligible professional who is in a practice that is certified as a patient-centered medical home or comparable specialty practice pursuant to subsection (b)(8)(B)(i) 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—Beginning with the fourth year to which the MIPS applies, 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 clauses (ii) and (iii), 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 clinical practice improvement activities 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)—

“(I) the assessment of performance provided under such methodology with respect to the performance categories described in clauses (i) and (ii) of paragraph (2)(A) 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) the composite score provided under this paragraph for such performance period with respect to each such performance category for each such MIPS eligible professional in such virtual group shall be based on the assessment of the combined performance under subclause (I) for the performance category and performance period.

“(ii) Election of practices to be a virtual group—The Secretary shall, in accordance with 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, for such individual MIPS eligible professional or all such MIPS eligible professionals in such group practice, respectively, to be a virtual group under this subparagraph with at least one other such individual MIPS eligible professional or group practice making such an election. Such a virtual group may be based on geographic areas or on provider specialties defined by nationally recognized multispecialty boards of certification or equivalent certification boards and such other eligible professional groupings in order to capture classifications of providers across eligible professional organizations and other practice areas or categories.

“(iii) Requirements—The process under clause (ii)—

“(I) shall provide that an election under such clause, with respect to a performance period, shall be made before or during the beginning of such performance period and may not be changed during such performance period;

“(II) shall provide that a practice described in such clause, and each MIPS eligible professional in such practice, may elect to be in no more than one virtual group for a performance period; and

“(III) may provide that a virtual group may be combined at the tax identification number level.

“(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 incentive 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 2018, 4 percent;

“(ii) for 2019, 5 percent;

“(iii) for 2020, 7 percent; and

“(iv) for 2021 and subsequent years, 9 percent.

“(C) Additional MIPS adjustment factors for exceptional performance

“(i) In general—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 the availability of funds under clause (ii), the Secretary shall specify an additional positive MIPS adjustment factor for such professional and year. Such additional MIPS adjustment factors shall be 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.

“(ii) Additional funding pool—For 2018 and each subsequent year through 2023, there is appropriated from the Federal Supplementary Medical Insurance Trust Fund $500,000,000 for MIPS payments under this paragraph resulting from the application of the additional MIPS adjustment factors under clause (i).

“(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 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)(i). 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 with respect to the prior period described in 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)(i). 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 2018), 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)(i) 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 be 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) 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—In specifying the MIPS additional adjustment factors under subparagraph (C)(i) for each applicable MIPS eligible professional for a year, the Secretary shall ensure that the estimated 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 the additional funding pool amount for such year under subparagraph (C)(ii).

“(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 implementation

“(i) In general—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 $40,000,000 for each of fiscal years 2015 through 2019. Amounts transferred under this subparagraph for a fiscal year shall be available until expended.

“(ii) Technical assistance—Of the amounts transferred pursuant to clause (i) for each of fiscal years 2015 through 2019, not less than $10,000,000 shall be made available for each such year for technical assistance to small practices in health professional shortage areas (as so designated) and medically underserved areas.

“(12) Feedback and information to improve performance

“(A) Performance feedback

“(i) In general—Beginning July 1, 2016, 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 each such professional on the performance of such professional 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, 2017, the Secretary shall make available to each MIPS eligible professional information, with respect to individuals who are patients of such MIPS eligible professional, 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, including a beneficiary opt-out.

“(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 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)(i) 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.”

“(11) Reports ending with 2016—Reports under the Program shall not be provided after December 31, 2016. See subsection (q)(12) for reports under the eligible professionals Merit-based Incentive Payment System.”

“(c) Physician focused payment models

“(1) Technical advisory committee

“(A) Establishment—There is established an ad hoc committee to be known as the “Payment Model Technical Advisory Committee” (referred to in this subsection as the “Committee”).

“(B) Membership

“(i) Number and appointment—The Committee shall be composed of 11 members appointed by the Comptroller General of the United States.

“(ii) Qualifications—The membership of the Committee shall include individuals with national recognition for their expertise in payment models and related delivery of care. No more than 5 members of the Committee shall be providers of services or suppliers, or representatives of providers of services or suppliers.

“(iii) Prohibition on federal employment—A member of the Committee shall not be an employee of the Federal Government.

“(iv) Ethics disclosure—The Comptroller General shall establish a system for public disclosure by members of the Committee of financial and other potential conflicts of interest relating to such members. Members of the Committee shall be treated as employees of Congress for purposes of applying title I of the Ethics in Government Act of 1978 (Public Law 95–521).

“(v) Date of initial appointments—The initial appointments of members of the Committee shall be made by not later than 180 days after the date of enactment of this subsection.

“(C) Term; vacancies

“(i) Term—The terms of members of the Committee shall be for 3 years except that the Comptroller General shall designate staggered terms for the members first appointed.

“(ii) Vacancies—Any member appointed to fill a vacancy occurring before the expiration of the term for which the member’s predecessor was appointed shall be appointed only for the remainder of that term. A member may serve after the expiration of that member’s term until a successor has taken office. A vacancy in the Committee shall be filled in the manner in which the original appointment was made.

“(D) Duties—The Committee shall meet, as needed, to provide comments and recommendations to the Secretary, as described in paragraph (2)(C), on physician-focused payment models.

“(E) Compensation of members

“(i) In general—Except as provided in clause (ii), a member of the Committee shall serve without compensation.

“(ii) Travel expenses—A member of the Committee shall be allowed travel expenses, including per diem in lieu of subsistence, at rates authorized for an employee of an agency under subchapter I of chapter 57 of title 5, United States Code, while away from the home or regular place of business of the member in the performance of the duties of the Committee.

“(F) Operational and technical support

“(i) In general—The Assistant Secretary for Planning and Evaluation shall provide technical and operational support for the Committee, which may be by use of a contractor. The Office of the Actuary of the Centers for Medicare & Medicaid Services shall provide to the Committee actuarial assistance as needed.

“(ii) Funding—The Secretary shall provide for the transfer, from the Federal Supplementary Medical Insurance Trust Fund under section 1841, such amounts as are necessary to carry out clause (i) (not to exceed $5,000,000) for fiscal year 2014 and each subsequent fiscal year. Any amounts transferred under the preceding sentence for a fiscal year shall remain available until expended.

“(G) Application—Section 14 of the Federal Advisory Committee Act (5 U.S.C. App.) shall not apply to the Committee.

“(2) Criteria and process for submission and review of physician-focused payment models

“(A) Criteria for assessing physician-focused payment models

“(i) Rulemaking—Not later than November 1, 2015, the Secretary shall, through notice and comment rulemaking, following a request for information, establish criteria for physician-focused payment models, including models for specialist physicians, that could be used by the Committee for making comments and recommendations pursuant to paragraph (1)(D).

“(ii) MedPAC submission of comments—During the comment period for the proposed rule described in clause (i), the Medicare Payment Advisory Commission may submit comments to the Secretary on the proposed criteria under such clause.

“(iii) Updating—The Secretary may update the criteria established under this subparagraph through rulemaking.

“(B) Stakeholder submission of physician focused payment models—On an ongoing basis, individuals and stakeholder entities may submit to the Committee proposals for physician-focused payment models that such individuals and entities believe meet the criteria described in subparagraph (A).

“(C) TAC review of models submitted—The Committee shall, on a periodic basis, review models submitted under subparagraph (B), prepare comments and recommendations regarding whether such models meet the criteria described in subparagraph (A), and submit such comments and recommendations to the Secretary.

“(D) Secretary review and response—The Secretary shall review the comments and recommendations submitted by the Committee under subparagraph (C) and post a detailed response to such comments and recommendations on the Internet Website of the Centers for Medicare & Medicaid Services.

“(3) Rule of construction—Nothing in this subsection shall be construed to impact the development or testing of models under this title or titles XI, XIX, or XXI.”

“(z) Incentive payments for participation in eligible alternative payment models

“(1) Payment incentive

“(A) In general—In the case of covered professional services furnished by an eligible professional during a year that is in the period beginning with 2018 and ending with 2023 and for which the professional is a qualifying APM participant, in addition to the amount of payment that would otherwise be made for such covered professional services under this part for such year, there also shall be paid to such professional an amount equal to 5 percent of the payment amount for the covered professional services under this part for the preceding year. For purposes of the previous sentence, the payment amount for the preceding year may be an estimation for the full preceding year based on a period of such preceding year that is less than the full year. The Secretary shall establish policies to implement this subparagraph in cases where payment for covered professional services furnished by a qualifying APM participant in an alternative payment model is made to an entity participating in the alternative payment model rather than directly to the qualifying APM participant.

“(B) Form of payment—Payments under this subsection shall be made in a lump sum, on an annual basis, as soon as practicable.

“(C) Treatment of payment incentive—Payments under this subsection shall not be taken into account for purposes of determining actual expenditures under an alternative payment model and for purposes of determining or rebasing any benchmarks used under the alternative payment model.

“(D) Coordination—The amount of the additional payment for an item or service under this subsection or subsection (m) shall be determined without regard to any additional payment for the item or service under subsection (m) and this subsection, respectively. The amount of the additional payment for an item or service under this subsection or subsection (x) shall be determined without regard to any additional payment for the item or service under subsection (x) and this subsection, respectively. The amount of the additional payment for an item or service under this subsection or subsection (y) shall be determined without regard to any additional payment for the item or service under subsection (y) and this subsection, respectively.

“(2) Qualifying APM participant—For purposes of this subsection, the term qualifying APM participant means the following:

“(A) 2018 and 2019—With respect to 2018 and 2019, an eligible professional for whom the Secretary determines that at least 25 percent of payments under this part for covered professional services furnished by such professional during the most recent period for which data are available (which may be less than a year) were attributable to such services furnished under this part through an entity that participates in an eligible alternative payment model with respect to such services.

“(B) 2020 and 2021—With respect to 2020 and 2021, an eligible professional described in either of the following clauses:

“(i) Medicare revenue threshold option—An eligible professional for whom the Secretary determines that at least 50 percent of payments under this part for covered professional services furnished by such professional during the most recent period for which data are available (which may be less than a year) were attributable to such services furnished under this part through an entity that participates in an eligible alternative payment model with respect to such services.

“(ii) Combination all-payer and Medicare revenue threshold option—An eligible professional—

“(I) for whom the Secretary determines, with respect to items and services furnished by such professional during the most recent period for which data are available (which may be less than a year), that at least 50 percent of the sum of—

“(aa) payments described in clause (i); and

“(bb) all other payments, regardless of payer (other than payments made by the Secretary of Defense or the Secretary of Veterans Affairs under chapter 55 of title 10, United States Code, or title 38, United States Code, or any other provision of law, and other than payments made under title XIX in a State in which no medical home or alternative payment model is available under the State program under that title),

“(II) for whom the Secretary determines at least 25 percent of payments under this part for covered professional services furnished by such professional during the most recent period for which data are available (which may be less than a year) were attributable to such services furnished under this part through an entity that participates in an eligible alternative payment model with respect to such services; and

“(III) who provides to the Secretary such information as is necessary for the Secretary to make a determination under subclause (I), with respect to such professional.

“(iii) Requirement—For purposes of clause (ii)(I)—

“(I) the requirement described in this subclause, with respect to payments described in item (aa) of such clause, is that such payments are made under an eligible alternative payment model; and

“(II) the requirement described in this subclause, with respect to payments described in item (bb) of such clause, is that such payments are made under an arrangement in which—

“(aa) quality measures comparable to measures under the performance category described in section 1848(q)(2)(B)(i) apply;

“(bb) certified EHR technology is used; and

“(cc) the eligible professional (AA) bears more than nominal financial risk if actual aggregate expenditures exceeds expected aggregate expenditures; or (BB) is a medical home (with respect to beneficiaries under title XIX) that meets criteria comparable to medical homes expanded under section 1115A(c).

“(C) Beginning in 2022—With respect to 2022 and each subsequent year, an eligible professional described in either of the following clauses:

“(i) Medicare revenue threshold option—An eligible professional for whom the Secretary determines that at least 75 percent of payments under this part for covered professional services furnished by such professional during the most recent period for which data are available (which may be less than a year) were attributable to such services furnished under this part through an entity that participates in an eligible alternative payment model with respect to such services.

“(ii) Combination all-payer and Medicare revenue threshold option—An eligible professional—

“(I) for whom the Secretary determines, with respect to items and services furnished by such professional during the most recent period for which data are available (which may be less than a year), that at least 75 percent of the sum of—

“(aa) payments described in clause (i); and

“(bb) all other payments, regardless of payer (other than payments made by the Secretary of Defense or the Secretary of Veterans Affairs under chapter 55 of title 10, United States Code, or title 38, United States Code, or any other provision of law, and other than payments made under title XIX in a State in which no medical home or alternative payment model is available under the State program under that title),

“(II) for whom the Secretary determines at least 25 percent of payments under this part for covered professional services furnished by such professional during the most recent period for which data are available (which may be less than a year) were attributable to such services furnished under this part through an entity that participates in an eligible alternative payment model with respect to such services; and

“(III) who provides to the Secretary such information as is necessary for the Secretary to make a determination under subclause (I), with respect to such professional.

“(iii) Requirement—For purposes of clause (ii)(I)—

“(I) the requirement described in this subclause, with respect to payments described in item (aa) of such clause, is that such payments are made under an eligible alternative payment model; and

“(II) the requirement described in this subclause, with respect to payments described in item (bb) of such clause, is that such payments are made under an arrangement in which—

“(aa) quality measures comparable to measures under the performance category described in section 1848(q)(2)(B)(i) apply;

“(bb) certified EHR technology is used; and

“(cc) the eligible professional (AA) bears more than nominal financial risk if actual aggregate expenditures exceeds expected aggregate expenditures; or (BB) is a medical home (with respect to beneficiaries under title XIX) that meets criteria comparable to medical homes expanded under section 1115A(c).

“(3) Additional definitions—In this subsection:

“(A) Covered professional services—The term covered professional services has the meaning given that term in section 1848(k)(3)(A).

“(B) Eligible professional—The term eligible professional has the meaning given that term in section 1848(k)(3)(B).

“(C) Alternative payment model (APM)—The term alternative payment model means any of the following:

“(i) A model under section 1115A (other than a health care innovation award).

“(ii) The shared savings program under section 1899.

“(iii) A demonstration under section 1866C.

“(iv) A demonstration required by Federal law.

“(D) Eligible alternative payment model (APM)

“(i) In general—The term eligible alternative payment model means, with respect to a year, an alternative payment model—

“(I) that requires use of certified EHR technology (as defined in subsection (o)(4));

“(II) that provides for payment for covered professional services based on quality measures comparable to measures under the performance category described in section 1848(q)(2)(B)(i); and

“(III) that satisfies the requirement described in clause (ii).

“(ii) Additional requirement—For purposes of clause (i)(III), the requirement described in this clause, with respect to a year and an alternative payment model, is that the alternative payment model—

“(I) is one in which one or more entities bear financial risk for monetary losses under such model that are in excess of a nominal amount; or

“(II) is a medical home expanded under section 1115A(c).

“(4) Limitation—There shall be no administrative or judicial review under section 1869, 1878, or otherwise, of the following:

“(A) The determination that an eligible professional is a qualifying APM participant under paragraph (2) and the determination that an alternative payment model is an eligible alternative payment model under paragraph (3)(D).

“(B) The determination of the amount of the 5 percent payment incentive under paragraph (1)(A), including any estimation as part of such determination.”

“(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.”

“(O) Target for relative value adjustments for misvalued services—With respect to fee schedules established for each of 2015 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 2015.

“(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.”

“(VIII) Reductions for misvalued services if target not met—Effective for fee schedules beginning with 2015, reduced expenditures attributable to the application of the target recapture amount described in subparagraph (O)(iii).”

“(7) Phase-in of significant relative value unit (RVU) reductions—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.”

“(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.”