,i #aacth ,,congress #b;d ,session ,h4 ,r4 #ehbc ,,in ,,the ,,house ,,of ,,representatives ,december #i1 #bjad ,mr4 ,matheson introduced the following bill2 which was referred to the ,committee on ,energy and ,commerce1 and in addition to the ,committee on ,ways and ,means1 for a period to be subsequently determined by the ,speaker1 in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned ,a ,,bill ,to amend title ,,xviii of the ,social ,security ,act to create incentives for healthcare providers to promote quality healthcare outcomes1 and for other purposes4 #a4 ,short title2 findings 7a7 ,short title ,this ,act may be cited as the ,incentivizing ,healthcare ,quality ,outcomes ,act of #bjad4 7b7 ,findings ,congress makes the following findings3 7#a7 ,healthcare delivery organizations are faced with an unmanageable array of quality measures and methods of risk adjustment that are overly process oriented1 may not relate to health outcomes1 and create a significant administrative burden4 7#b7 ,existing quality measures and methods of risk adjustment used to adjust ,medicare payments should be replaced with a comprehensive and clinically credible quality measurement system based on the rate of occurrence of potentially preventable outcomes4 7#c7 ,payment adjustment for quality outcomes should be applied to all types of healthcare delivery organizations including hospitals1 health systems1 ,medicare ,advantage plans1 health homes1 and accountable care organizations as well as healthcare professionals4 #b4 ,incentivizing healthcare quality outcomes 7a7 ,in general ,title ,,xviii of the ,social ,security ,act 7#db ,u4,s4,c4 #acie et seq47 is amended by adding at the end the following new section3 #ahii;,b4 ,incentivizing healthcare quality outcomes 7a7 ,adjustment of payments to health-,care delivery organization for potentially preventable outcomes 7#a7 ,in general ,in order to provide an incentive for each applicable healthcare delivery organization 7as defined in subsection 7k77 to reduce potentially preventable outcomes1 the amount of payments to the organization under this title for an applicable prospective period 7as defined in such subsection7 shall be the amount otherwise determined multiplied by the healthcare delivery organization-specific adjustment factor determined under paragraph 7#b7 for such period4 7#b7 ,healthcare delivery organization specific payment adjustment factor 7,a7 ,in general ,for purposes of paragraph 7#a71 subject to subparagraph 7,b71 the healthcare delivery organization-specific payment adjustment factor described in this paragraph for an applicable healthcare delivery organization for an applicable prospective period is equal to #a minus the ratio 7expressed as a percentage71 as determined by the ,secretary1 of-- 7i7 the composite aggregate payments for excess potentially preventable outcomes 7described in subsection 7c77#a77 for the organization and period2 to 7ii7 the aggregate payments under this title to the organization for such period4 7,b7 ,phase-in of healthcare delivery organization-specific adjustment factor ,in no case shall the healthcare delivery organization-specific payment adjustment factor under subparagraph 7,a7 be-- 7i7 less than #ig percent or more than #ajc percent for fiscal year #bjaf2 7ii7 be less than #id percent or more than #ajf percent for fiscal year #bjag2 or 7iii7 be less than #ij percent or more than #aaj percent for fiscal year #bjah and each subsequent fiscal year4 7b7 ,adjustment to the annual update factor for payments to healthcare professionals in a geographic region for potentially preventable outcomes 7#a7 ,in general ,in order to provide an incentive for healthcare professionals 7that are not part of an applicable healthcare delivery organization7 in a geographic region to coordinate care and reduce potentially preventable outcomes1 the annual update factor for traditional ,medicare fee-for-service payments to all such professionals in a geographic region established under paragraph 7#c7 for an applicable prospective period 7beginning on or after ,october #a1 #bjae7 shall be equal to the annual update factor that would otherwise apply multiplied by the geographic-specific potentially preventable outcomes adjustment factor 7as described in paragraph 7#b77 for the geographic region and period4 7#b7 ,geographic-specific potentially preventable outcomes adjustment factor 7,a7 ,in general ,for purposes of paragraph 7#a71 subject to subparagraph 7,b71 the geographic-specific potentially preventable outcomes adjustment factor described in this paragraph for a geographic region for an applicable prospective period is equal to #a minus the ratio 7expressed as a percentage71 as determined by the ,secretary1 of-- 7i7 the sum of the composite aggregate payments for excess potentially preventable outcomes 7described in subsection 7c77#a77 for ,medicare beneficiaries enrolled in traditional ,medicare fee-for-service across all applicable healthcare delivery organizations physically located in the geographic region for the applicable historical period2 to 7ii7 the aggregate payments for ,medicare beneficiaries enrolled in traditional ,medicare fee-for-service across all applicable healthcare delivery organizations physically located in the geographic region for such applicable historical period4 7,b7 ,phase-in ,in no case shall the geographic-specific potentially preventable outcomes adjustment factor for a geographic region under this paragraph-- 7i7 be less than #ie percent or more than #aje percent for fiscal year #bjaf2 7ii7 be less than #ij percent or more than #aaj percent for fiscal year #bjag2 or 7iii7 be less than #hj percent or more than #abj percent for fiscal year #bjah and each subsequent fiscal year4 7#c7 ,geographic region 7,a7 ,in general ,for the purposes of this subsection and subject to subparagraph 7,b71 the ,secretary shall establish geographic regions to which healthcare professionals shall be assigned4 7,b7 ,restrictions 7i7 ,geographic regions ,to the extent practical1 the ,secretary shall define geographic regions based on core base statistical areas as defined by the ,director of the ,office of ,management and ,budget4 7ii7 ,assignment of healthcare professionals to geographic regions ,the geographic region to which a healthcare professional is assigned shall be the geographic region in which a plurality of ,medicare beneficiaries treated by such professional for the applicable historical period reside1 as determined by the ,secretary4 7#d7 ,report on using individual healthcare professional performance ,no later than ,january #a1 #bjag1 the ,secretary shall submit to ,congress a report proposing a method of combining the potentially preventable outcomes performance of individual healthcare professionals with the geographic-specific potentially preventable outcomes performance for a geographic region under paragraph 7#b7 for the purpose of determining the potentially preventable outcomes adjustment factor under paragraph 7#a7 to the annual adjustment factor for payments to such individual healthcare professionals4 7c7 ,composite aggregate payments for excess potentially preventable outcomes 7#a7 ,in general ,the composite aggregate payments for excess potentially preventable outcomes for an applicable healthcare delivery organization or geographic region for an applicable historical period described in this paragraph is equal to the sum of the following for the healthcare delivery organization or geographic region and period3 7,a7 ,preventable complications ,the aggregate payments for excess inpatient potentially preventable complications 7as defined in subsection 7e77#a77;,b774 7,b7 ,preventable readmissions ,the aggregate payments for excess potentially preventable readmissions 7as defined in subsection 7f77#a77;,b774 7,c7 ,preventable admissions ,the aggregate payments for excess potentially preventable admissions computed 7as defined in subsection 7g77#a77;,b774 7,d7 ,preventable emergency room visits ,the aggregate payments for excess potentially preventable emergency room visits 7as defined in subsection 7h77#a77;,b774 7,e7 ,preventable outpatient ancillary services ,the aggregate payments for excess potentially preventable outpatient ancillary services 7as defined in subsection 7i77#a77;,b774 7#b7 ,offsetting potentially preventable outcome values being positive or negative ,the aggregate payments for individual excess potentially preventable outcomes under subsections 7e77#a77;,b71 7f77#a77;,b71 7g77#a77;,b71 7h77#a77;,b71 and 7i77#a77;,b7 may have a positive value 7indicating the healthcare delivery organization had more potentially preventable outcomes than expected7 or a negative value 7indicating the healthcare delivery organization had fewer potentially preventable outcomes than expected74 ,the summing of the individual excess potentially preventable outcomes in paragraph 7#a7 for potentially preventable outcomes allows negative values for individual potentially preventable outcomes to offset in part or in whole positive values of other potentially preventable outcomes4 7#c7 ,exclusions ,the ,secretary shall determine the applicability of each type of potentially preventable outcome to different types of healthcare delivery organizations and may exclude potentially preventable outcomes from the calculation of aggregate payments referred to in paragraph 7#a7 for types of healthcare delivery organizations if the ,secretary determines that such outcomes are not applicable for such types of organizations4 7d7 ,superseding existing payment adjustments for quality2 budget neutral adjustment 7#a7 ,in general ,for applicable prospective periods beginning on or after ,october #a1 #bjae1 no payment adjustment for quality performance shall be made pursuant any of the following provisions3 7,a7 ,payment adjustments for hospital acquired conditions under section #ahhf7;d77#d77;,d71 as added by section #ejja7;c7 of ,deficit ,reduction ,act of #bjje4 7,b7 ,payment adjustments for value based purchasing for inpatient hospital services under section #ahhf7o7 and for physicians' services under section #ahdh7p74 7,c7 ,payment adjustments for hospital readmissions under section #ahhf7q71 as added by section #cjbe of the ,patient ,protection and ,affordable ,care ,act4 7,d7 ,payment adjustments for hospital acquired conditions under section #ahhf7p71 as added by section #cjjh of the ,patient ,protection and ,affordable ,care ,act4 7,e7 ,payment adjustments for ,medicare ,advantage ,plans under ,sections #ahec7n7 and #ahec7o74 7,f7 ,other payment adjustments for quality as determined by the ,secretary4 7#b7 ,payment adjustments for reporting quality information unchanged ,payment adjustments for reporting quality information that are unrelated to actual quality performance under sections #ahcc7t77#ag71 #ahdh7;a71 #ahdh7k71 #ahdh7m7 and #ahcc7;i77#b77;,d7 shall not be affected by this subsection4 7#c7 ,mandated reductions under current law ,the ,secretary shall determine the annual reductions in payment mandated by the provisions described in paragraph 7#a7 for fiscal year #bjaf and for each subsequent fiscal year4 7#d7 ,payment reduction factor to achieve budget neutrality ,the ,secretary shall determine a payment reduction factor for fiscal year #bjaf and for each subsequent fiscal year1 to be applied under subsections 7e77#a77;,a77ii71 7f77#a77;,a77ii71 7g77#a77;,a77ii71 7h77#a77;,a77ii71 and 7i77#a77;,a77ii71 subject to the limitations in subsections 7a77#b77;,b7 and 7b77#b77;,b71 so that there is an aggregate payment reduction under this section for such fiscal year equivalent to the aggregate reduction in payment determined under paragraph 7#c7 for such fiscal year4 7e7 ,aggregate payments for excess inpatient potentially preventable complications 7#a7 ,excess inpatient potentially preventable complications2 aggregate payments for excess inpatient potentially preventable complications defined ,in this section3 7,a7 ,excess inpatient potentially preventable complications 7i7 ,in general ,the term excess inpatient potentially preventable complications means1 for an applicable hospital and other applicable healthcare delivery organizations determined appropriate by the ,secretary for an applicable historical period for each type of inpatient hospital potentially preventable complication identified under paragraph 7#b71 the sum across all risk classes 7as defined in clause 7iii77 of the difference between-- 7,i7 the expected number of inpatient hospital potentially preventable complications for the type of complication for the applicable hospital based on the standard complication rate computed under clause 7ii7 in each risk class2 and 7,,ii7 the applicable hospital's actual number of inpatient hospital potentially preventable complications for the type of inpatient potentially preventable complication in each risk class in the applicable historical period4 ,such difference may be a positive or negative number4 7ii7 ,standard complication rate ,in carrying out clause 7i77,i71 the standard complication rate shall be based on the average rate of each type of inpatient hospital potentially preventable complication in each risk class in the applicable historical period1 multiplied by the payment reduction factor established under subsection 7d77#c7 for the applicable prospective period4 7iii7 ,risk classes ,in this subparagraph1 the term risk classes means such exhaustive and mutually exclusive risk classes as the ,secretary shall establish in order to apply a risk-adjustment methodology that meets the criteria in subsection 7j77#b7 and account for the age1 reason for admission1 severity of illness1 and other risk factors identified by the ,secretary of patients at the time of hospital admission4 7,b7 ,aggregate payments for excess inpatient hospital potentially preventable complications 7i7 ,in general ,the term aggregate payments for excess inpatient hospital potentially preventable complications means1 for an applicable hospital and other applicable healthcare delivery organizations determined appropriate by the ,secretary and applicable historical period1 for all types of inpatient hospital potentially preventable complications identified under paragraph 7#b71 an amount equal to the sum of the amount determined under clause 7ii7 for such hospital and other applicable healthcare delivery organizations determined appropriate by the ,secretary for each type of inpatient hospital potentially preventable complication for such period4 7ii7 ,amount determined ,the amount determined under this clause1 with respect to an applicable hospital and other applicable healthcare delivery organizations determined appropriate by the ,secretary and an applicable historical period1 for a type of inpatient hospital potentially preventable complication identified under paragraph 7#b7 is equal to the product of-- 7,i7 the excess inpatient hospital potentially preventable complications 7as defined in subparagraph 7,a77 of the applicable hospital and other applicable healthcare delivery organizations determined appropriate by the ,secretary for the type of inpatient hospital potentially preventable complication during the applicable historical period2 and 7,,ii7 the estimated national average standardized incremental cost of that inpatient hospital potentially preventable complication for applicable hospitals and other applicable healthcare delivery organizations determined appropriate by the ,secretary during the applicable historical period 7as determined under clause 7iii77 adjusted by each hospital's applicable payment adjustment factors4 7iii7 ,methodology for estimating national average incremental cost of inpatient hospital potentially preventable complications ,in carrying out clause 7ii77,,ii71 the ,secretary shall establish and apply a methodology to estimate the national average standardized incremental cost of each inpatient hospital potentially preventable complication identified under paragraph 7#b74 7#b7 ,inpatient hospital potentially preventable complications ,for purposes of this subsection1 the ,secretary shall select a methodology of identifying potentially preventable complications that includes each inpatient hospital complication that meets all of the following requirements3 7,a7 ,the complication occurs during the stay and was not present on admission as an inpatient4 7,b7 ,the complication is a harmful event1 such as a surgical complication1 or an acute illness1 such as an infection or an acute exacerbation of underlying chronic disease4 7,c7 ,the complication could reasonably be prevented with adequate care and treatment and is not a natural progression of a patient's underlying illnesses present on admission4 7,d7 ,the complication may be reasonably construed as related to the care rendered during the stay4 7,e7 ,the complication meets criteria applicable under subsection 7j77#a7 to the outcome described in this subsection4 7f7 ,aggregate payments for excess potentially preventable readmissions 7#a7 ,excess potentially preventable readmissions2 aggregate payments for excess potentially preventable readmissions defined ,for purposes of this subsection3 7,a7 ,excess potentially preventable readmissions 7i7 ,in general ,the term excess potentially preventable readmissions means1 for an applicable hospital or other applicable healthcare delivery organization determined appropriate by the ,secretary for an applicable historical period and with respect to potentially preventable readmissions identified under paragraph 7#b7 for each risk class 7as defined in clause 7iii77 the difference between-- 7,i7 the expected number of potentially preventable readmissions for the applicable hospital based on the standard readmission rate in each risk class 7as defined in clause 7ii772 and 7,,ii7 the applicable hospital's actual number of potentially preventable readmissions in each risk class for the applicable historical period4 ,such difference may be a positive or negative number4 7ii7 ,standard readmission rate ,in carrying out clause 7i77,i71 the standard readmission rate shall be based on the average potentially preventable readmission rate in each risk class1 as established under clause 7iii71 in the applicable historical period1 multiplied by the payment reduction factor established under subsection 7d77#c7 for the applicable prospective period4 7iii7 ,risk adjustment ,in this subparagraph1 the term risk classes means such exhaustive and mutually exclusive risk classes as the ,secretary shall establish in order to apply a risk-adjustment methodology that meets the criteria in subsection 7j77#b7 and account for the age1 reason for admission1 severity of illness1 and other risk factors identified by the ,secretary of patients that were present in patients at the time of hospital discharge from the hospital admission that preceded their readmission4 7,b7 ,aggregate payments for excess potentially preventable readmissions 7i7 ,in general ,the term aggregate payments for excess potentially preventable readmissions means1 for an applicable historical period1 for all potentially preventable readmissions identified under paragraph 7#b71 an amount equal to the amount determined under clause 7ii74 7ii7 ,amount determined ,the amount determined under this clause1 with respect to an applicable hospital and other applicable healthcare delivery organizations determined appropriate by the ,secretary and an applicable historical period1 is equal to the sum across all risk classes of the product of-- 7,i7 the excess potentially preventable readmissions in the risk class for the applicable hospital and other applicable healthcare delivery organizations determined appropriate by the ,secretary for the applicable historical period2 and 7,,ii7 the average payment for potentially preventable readmissions 7as defined in clause 7iii77 in the risk class for applicable hospitals and other applicable healthcare delivery organizations determined appropriate by the ,secretary for the applicable historical period4 7iii7 ,average payment for potentially preventable readmissions ,in clause 7ii77,,ii71 the term average payment for potentially preventable readmissions for a risk class means1 for applicable hospitals and other applicable healthcare delivery organizations determined appropriate by the ,secretary for an applicable historical period1 the average payment for all potentially preventable readmissions that follow a prior discharge in that risk class4 7#b7 ,potentially preventable readmissions ,for purposes of this subsection1 the ,secretary shall select a methodology of identifying potentially preventable readmissions under paragraph 7#a7 that includes each readmission that meets all of the following requirements3 7,a7 ,the readmission is within #cj days from the date of the initial discharge and could reasonably have been prevented by-- 7i7 the provision of appropriate care consistent with accepted standards in the prior discharge2 7ii7 adequate discharge planning2 7iii7 adequate post-discharge followup2 or 7iv7 improved coordination between the inpatient and outpatient healthcare teams4 7,b7 ,the readmission is for a condition or procedure related to the care during the prior admission or during the care immediately following the prior discharge1 including-- 7i7 a readmission for the same or closely related condition or procedure as the prior discharge2 7ii7 a readmission for an infection or other complication of care2 7iii7 a readmission for a condition or procedure indicative of a failed surgical intervention2 and 7iv7 a readmission for an acute decompensation of a coexisting chronic disease4 7,c7 ,the readmission is back to the same hospital or to any other hospital4 7,d7 ,the readmission does not occur under any of the following circumstances3 7i7 ,the original discharge was a patient-initiated discharge and was against medical advice and the circumstances of such discharge and readmission are documented in the patient's medical record4 7ii7 ,the readmission was a planned readmission4 7iii7 ,such other exclusion as the ,secretary determines appropriate4 7,e7 ,the readmission meets criteria applicable under subsection 7j77#a7 to the outcome described in this subsection4 7g7 ,aggregate payments for excess potentially preventable admissions 7#a7 ,excess potentially preventable admissions2 aggregate payments for excess potentially preventable admissions defined ,in this subsection3 7,a7 ,excess potentially preventable admissions 7i7 ,in general ,the term excess potentially preventable admissions means1 for an applicable healthcare delivery organization for an applicable historical period and with respect to potentially preventable admissions identified under paragraph 7#b71 for each risk class 7as defined in clause 7iii77 the difference between-- 7,i7 the expected number of beneficiaries with one or more potentially preventable admissions for the applicable healthcare delivery organization based on the standard potentially preventable admission rate for beneficiaries in each risk class2 and 7,,ii7 the applicable healthcare delivery organization's actual number of beneficiaries with one or more potentially preventable admissions in each risk class for the applicable historical period for beneficiaries assigned to the risk class4 ,such difference may be a positive or negative number4 7ii7 ,standard potentially preventable admission rate ,in carrying out clause 7i77,i71 the standard potentially preventable admission rate shall be based on the average number of beneficiaries with one or more potentially preventable admissions in each risk class1 as defined in clause 7iii71 in the applicable historical period1 multiplied by the payment reduction factor established under subsection 7d77#c7 for the applicable prospective period4 7iii7 ,risk adjustment ,in this subparagraph1 the term risk classes means such exhaustive and mutually exclusive risk classes as the ,secretary shall establish in order to apply a risk-adjustment methodology that meets the criteria in subsection 7j77#b7 and account for the age1 reason for admission1 severity of illness1 and other risk factors identified by the ,secretary4 ,the risk class for a beneficiary shall be assigned under this subparagraph based on the beneficiary's chronic illness burden and history of healthcare services for a time period of not less than #f months preceding the beginning of the applicable historical period4 7,b7 ,aggregate payments for excess potentially preventable admissions 7i7 ,in general ,the term aggregate payments for excess potentially preventable admissions means1 for an applicable historical period1 for potentially preventable admissions identified under paragraph 7#b71 an amount equal to the amount determined under clause 7ii74 7ii7 ,amount determined ,the amount determined under this clause1 with respect to an applicable healthcare delivery organization and an applicable historical period1 for all beneficiaries with one or more potentially preventable admissions identified under paragraph 7#b7 is equal to the sum across all risk classes of the product of-- 7,i7 the excess potentially preventable admissions 7as defined in subparagraph 7,a77 in the risk class for the applicable healthcare delivery organization during the applicable historical period2 and 7,,ii7 the average payment per beneficiary of all potentially preventable admissions for beneficiaries in the risk class 7as determined under clause 7iii77 for applicable healthcare delivery organizations during the applicable historical period4 7iii7 ,average payment per beneficiary of all potentially preventable admissions ,the term average payment per beneficiary of all potentially preventable admissions for a risk class means1 for applicable healthcare delivery organizations for an applicable historical period1 the average payment per beneficiary for all potentially preventable admissions in the risk class4 7#b7 ,potentially preventable admissions ,for purposes of this subsection1 the ,secretary shall select a methodology of identifying potentially preventable admissions under paragraph 7#a7 that includes each admission that meets all of the following requirements3 7,a7 ,the admission could reasonably have been prevented with adequate access to ambulatory care or coordinated healthcare services4 7,b7 ,the services provided as part of the admission could be safely performed in an outpatient facility4 7,c7 ,the admission is not of a beneficiary with extensive comorbid disease or high severity of illness that may necessitate that care be delivered in a hospital setting4 7,d7 ,the admission meets criteria applicable under subsection 7j77#a7 to the outcome described in this subsection4 7h7 ,aggregate payments for excess potentially preventable emergency room visits 7#a7 ,excess potentially preventable emergency room visits2 aggregate payments for excess potentially preventable emergency room visits defined ,in this subsection3 7,a7 ,excess potentially preventable emergency room visits 7i7 ,in general ,the term excess potentially preventable emergency room visits means1 for an applicable healthcare delivery organization for an applicable historical period and with respect to potentially preventable emergency room visits identified under paragraph 7#b71 for each risk class 7as defined in clause 7iii77 the difference between-- 7,i7 the expected number of beneficiaries with one or more potentially preventable emergency room visits for the applicable healthcare delivery organization based on the standard potentially preventable emergency room visit rate for beneficiaries in each risk class 7as defined in clause 7ii772 and 7,,ii7 the applicable healthcare delivery organization's actual number of beneficiaries with one or more potentially preventable emergency room visits for the applicable historical period for beneficiaries assigned to the risk class4 ,such difference may be a positive or negative number4 7ii7 ,standard potentially preventable emergency room visit rate ,in carrying out clause 7i77,i71 the standard potentially preventable emergency room visit rate shall be based on the average number of beneficiaries with one or more potentially preventable emergency room visits in each risk class1 as defined in clause 7iii7 in the applicable historical period1 multiplied by the payment reduction factor established under subsection 7d77#c7 for the applicable prospective period4 7iii7 ,risk adjustment ,in this subparagraph1 the term risk classes means such exhaustive and mutually exclusive risk classes as the ,secretary shall establish in order to apply a risk-adjustment methodology that meets the criteria in subsection 7j77#b7 and account for the age1 reason for admission1 severity of illness1 and other risk factors identified by the ,secretary4 ,the risk class for a beneficiary shall be assigned based on the beneficiary's chronic illness burden and history of healthcare services for a time period of not less than #f months preceding the beginning of the applicable historical period4 7,b7 ,aggregate payments for excess potentially preventable emergency room visits 7i7 ,in general ,the term aggregate payments for excess potentially preventable emergency room visits means1 for an applicable historical period1 for potentially preventable emergency room visits identified under paragraph 7#b71 an amount equal to the amount determined under clause 7ii74 7ii7 ,amount determined ,the amount determined under this clause1 with respect to an applicable healthcare delivery organization and an applicable historical period1 for all beneficiaries with one or more potentially preventable emergency room visits identified under paragraph 7#b7 is equal to the sum across all risk classes of the product of-- 7,i7 the excess potentially preventable emergency room visits 7as defined in subparagraph 7,a77 in the risk class for the applicable healthcare delivery organization during the applicable historical period2 and 7,,ii7 the average payment per beneficiary of all potentially preventable emergency room visits for beneficiaries in the risk class 7as determined under clause 7iii77 for applicable healthcare delivery organizations during the applicable historical period4 7iii7 ,average payment per beneficiary of all potentially preventable emergency room visits ,the term average payment per beneficiary of all potentially preventable emergency room visits means1 for applicable healthcare delivery organizations for an applicable historical period for a risk class1 the average payment per beneficiary for all potentially preventable emergency room visits in the risk class4 7#b7 ,potentially preventable emergency room visits ,for purposes of this subsection1 the ,secretary shall select a methodology of identifying potentially preventable emergency room visits under paragraph 7#a7 that includes each such visit that meets all of the following requirements3 7,a7 ,the visit did not require emergency medical attention because the condition could be treated or prevented by a physician or other healthcare provider in a nonemergency setting4 7,b7 ,the beneficiary involved does not have an extensive comorbid disease or high severity of illness that may necessitate that care be delivered in an emergency room setting4 7,c7 ,the visit meets criteria applicable under subsection 7j77#a7 to the outcome described in this subsection4 7i7 ,aggregate payments for excess potentially preventable outpatient procedures and tests 7#a7 ,excess potentially preventable outpatient procedures and tests2 aggregate payments for excess potentially preventable outpatient procedures and tests defined ,in this subsection3 7,a7 ,excess potentially preventable outpatient procedures and tests 7i7 ,in general ,the term excess potentially preventable outpatient procedures and tests means1 for an applicable healthcare delivery organization for an applicable historical period and with respect to potentially preventable outpatient procedures and tests identified under paragraph 7#b71 for each risk class 7as defined in clause 7iii77 the difference between-- 7,i7 the expected number of beneficiaries with one or more potentially preventable outpatient procedures and tests for the applicable healthcare delivery organization based on the standard potentially preventable rate of potentially preventable outpatient procedures and tests for beneficiaries in each risk class 7as defined in clause 7ii772 and 7,,ii7 the applicable healthcare delivery organization's actual number of beneficiaries with one or more potentially preventable outpatient procedures and tests in each risk class for the applicable historical period for beneficiaries assigned to the risk class4 ,such difference may be a positive or negative number4 7ii7 ,standard potentially preventable rate of outpatient procedures and tests ,in carrying out clause 7i77,i71 the standard potentially preventable rate of outpatient procedures and tests shall be based on the average number of beneficiaries with one or more potentially preventable outpatient procedures and tests in each risk class1 as defined in clause 7iii7 in the applicable historical period1 multiplied by the payment reduction factor established under subsection 7d77#c7 for the applicable prospective period4 7iii7 ,risk adjustment ,in this subparagraph1 the term risk classes means such exhaustive and mutually exclusive risk classes as the ,secretary shall establish in order to apply a risk-adjustment methodology that meets the criteria in subsection 7j77#b7 and account for the age1 reason for admission1 severity of illness1 and other risk factors identified by the ,secretary4 ,the risk class for a beneficiary shall be assigned based on the beneficiary's chronic illness burden and history of healthcare services for a time period of not less than #f months preceding the beginning of the applicable historical period4 7,b7 ,aggregate payments for excess potentially preventable outpatient procedures and tests 7i7 ,in general ,the term aggregate payments for excess potentially preventable outpatient procedures and tests means1 for an applicable historical period1 for all beneficiaries with one or more potentially preventable outpatient procedures and tests identified under paragraph 7#b71 an amount equal to the amount determined under clause 7ii74 7ii7 ,amount determined ,the amount determined under this clause1 with respect to an applicable healthcare delivery organization and an applicable historical period1 for potentially preventable outpatient procedures and tests identified under paragraph 7#b7 is equal to the sum across all risk classes of the product of-- 7,i7 the excess potentially preventable outpatient procedures and tests 7as defined in subparagraph 7,a77 for the risk class for the applicable healthcare delivery organization during the applicable historical period2 and 7,,ii7 the average payment per beneficiary of all potentially preventable outpatient procedures and tests for beneficiaries in the risk class 7as determined under clause 7iii77 for applicable healthcare delivery organizations during the applicable historical period4 7iii7 ,average payment per beneficiary of all potentially preventable outpatient procedures and tests ,the term average payment per beneficiary of all potentially preventable outpatient procedures and tests for a risk class means1 for applicable healthcare delivery organizations for an applicable historical period1 the average payment per beneficiary of all potentially preventable outpatient procedures and tests in the risk class4 7#b7 ,potentially preventable outpatient procedures and tests ,for purposes of this subsection1 the ,secretary shall select a methodology of identifying potentially preventable outpatient procedures and tests that includes each procedure or test that meets all of the following requirements3 7,a7 ,the procedure or test is provided or ordered by a physician or other healthcare provider to supplement or support the evaluation or treatment of a beneficiary including a procedure1 diagnostic test1 laboratory test1 therapy service1 or radiology service4 7,b7 ,the procedure or test may be overused in the provision healthcare or treatment4 7,c7 ,the procedure or test is not for a beneficiary with extensive comorbid disease or high severity of illness that may necessitate frequent monitoring with outpatient procedures and tests4 7,d7 ,the procedure or test meets criteria applicable under subsection 7j77#a7 to the outcome described in this subsection4 7j7 ,selection of methods for identifying potentially preventable outcomes and method of risk adjustment 7#a7 ,selection criteria for method for identifying potentially preventable outcomes ,the ,secretary shall select a methodology of identifying each of the potentially preventable outcomes4 ,for each type of potentially preventable outcome the methodology selected shall meet the following criteria3 7,a7 ,be comprehensive with a uniform structure4 7,b7 ,have available a method of risk adjustment that meets the criteria in paragraph 7#b74 7,c7 ,be clinically meaningful having exclusions for beneficiaries for whom the outcome is not potentially preventable including those beneficiaries with extensive comorbid disease or high severity of illness4 7,d7 ,to the extent possible have been successfully implemented in the payment organization of a ,state ,medicaid program or a major payer or be certified by an entity with a contract under section #ahij7;a74 7,e7 ,be open1 transparent1 and available for review and comment4 7,f7 ,to the extent possible1 be in the public domain4 7,g7 ,if commercially available methods are the only viable methods that meet the criteria in subparagraphs 7,a71 7,b71 7,c71 and 7,d71 the ,secretary may select such commercial methods as long as such methods meet the criteria in subparagraph 7,e74 7#b7 ,selection criteria for method of risk adjustment ,the ,secretary shall select a methodology for risk adjusting the rate of each of the potentially preventable outcomes4 ,for each type of potentially preventable outcome1 the methodology for risk adjustment shall meet the following criteria3 7,a7 ,the methodology is comprehensive with a uniform structure4 7,b7 ,the methodology is clinically meaningful and explicitly recognize severity of illness1 chronic illness burden1 and patients with extensive comorbid disease or high severity of illness4 7,c7 ,to the extent possible1 the methodology has been successfully implemented in payment under a ,state ,medicaid program or by a major payer or is certified by an entity with a contract under section #ahij7;a74 7,d7 ,the methodology is open and transparent and available for review and comment4 7,e7 ,to the extent possible1 the methodology is in the public domain4 7,f7 ,if commercially available methods are the only viable methods that meet the criteria in subparagraphs 7,a71 7,b71 and 7,c71 the ,secretary may select such commercial methods as long as such methods meet the criteria in subparagraph 7,d74 7k7 ,definitions ,in this section3 7#a7 ,applicable healthcare delivery organization ,the term applicable healthcare delivery organization means a ,medicare ,advantage ,plan receiving payments under part ,c1 health home1 accountable care organization1 applicable hospital 7as defined in subparagraph 7,c771 ambulatory surgery center1 federally qualified health center1 or other healthcare delivery organization identified by the ,secretary4 7#b7 ,applicable historical period ,the term applicable historical period means1 with respect to an applicable healthcare delivery organization for a fiscal year1 the most recent #b-year period for which data from the organization are available for purposes of this section4 7#c7 ,applicable hospital ,the term applicable hospitals means a subsection 7d7 hospital 7as defined in section #ahhf7;d77#a77;,b74 7#d7 ,applicable prospective period ,the term applicable prospective period means-- 7,a7 with respect to an organization1 the fiscal year in which the healthcare delivery organization specific adjustment factor under subsection 7a77#b7 for an applicable historical period applies to the payments to the healthcare delivery organization2 and 7,b7 with respect to healthcare professionals1 the year in which the geographic-specific potentially preventable outcomes adjustment factor under subsection 7b77#b7 for an applicable historical period applies to payments to the professionals4 7#e7 ,potentially preventable outcomes ,the term potentially preventable outcomes means inpatient potentially preventable complications under subsection 7e77#b71 potentially preventable readmissions under subsection 7f77#b71 potentially preventable admissions under subsection 7g77#b71 potentially preventable emergency room visits under subsection 7h77#b71 and potentially preventable outpatient procedures and tests under subsection 7i77#b74 4 7b7 ,reporting of potentially preventable outcomes 7#a7 ,reporting to healthcare delivery organizations ,for each applicable historical period1 the ,secretary of ,health and ,human ,services 7in this section referred to as the ,secretary7 shall provide confidential reports to applicable healthcare delivery organizations with respect to potentially preventable outcomes4 ,the confidential reports shall be provided to a healthcare delivery organization at least #ij days before the date of their release to the public regarding potentially preventable outcomes of the healthcare delivery organization4 7#b7 ,reporting health delivery organization specific information 7,a7 ,in general ,the ,secretary shall make information available to the public regarding potentially preventable outcomes of each applicable healthcare delivery organization4 7,b7 ,opportunity to review and submit corrections ,the ,secretary shall ensure that an applicable healthcare delivery organization has the opportunity to review1 and submit corrections for1 the information to be made public prior to such information being made public4 7,c7 ,web site posting ,such information shall be posted on the ,hospital ,compare ,internet ,web ,site in an easily understandable format4 7c7 ,applicability to medicaid ,the ,secretary shall apply to ,state plans 7or waivers7 under title ,,xix of the ,social ,security ,act regulations relating to payment adjustments for potentially preventable outcomes 7as defined in section #ahii;,b7k7 of such ,act7 as appropriate for the ,medicaid program4 ,such regulations shall be in effect no later than ,october #a1 #bjag4 7d7 ,quality improvement grants 7#a7 ,in general ,subject to paragraph 7#d77;,d71 beginning in fiscal year #bjag the ,secretary shall award quality improvement grants to eligible healthcare delivery organizations described in paragraph 7#b7 that meet the criteria established under paragraph 7#c74 7#b7 ,eligible healthcare delivery organization ,for purposes of this subsection for a fiscal year1 an eligible healthcare delivery organization is an applicable healthcare delivery organization that has a healthcare delivery organization-specific adjustment factor for the fiscal year 7as determined under section #ahii;,b7a77#b7 of the ,social ,security ,act1 as added by subsection 7a771 that is lower than the healthcare delivery organization-specific adjustment factor 7under such section7 for #ge percent of all other healthcare delivery organizations in such fiscal year4 7#c7 ,criteria ,the ,secretary shall establish criteria for awarding grants under this subsection4 7#d7 ,limitations 7,a7 ,use of grant funds ,a healthcare delivery organization that applies for and receives a grant under this subsection shall use such grant to implement processes that lower the rate of potentially preventable outcomes4 7,b7 ,term of grant ,grants under this subsection shall be for #b years4 7,c7 ,reports ,a healthcare delivery organization that applies for and receives a grant under this subsection shall1 not later than #cj months after the date of receiving such grant1 submit a report to the ,secretary on the processes funded by such grant and the resulting impact on rates of potentially preventable outcomes4 7,d7 ,amount of grants ,the aggregate amount of funds awarded as grants under this subsection for a fiscal year shall not exceed #e percent of the sum of the composite aggregate payments for excess potentially preventable outcomes for all healthcare delivery organizations in the applicable historical period 7as determined under section #ahii;,b7c77#a7 of the ,social ,security ,act74 7#e7 ,authorization of appropriations ,there are authorized to be appropriated to carry out this subsection such sums as may be necessary for each of fiscal years #bjag through #bjba4 7e7 ,,gao report ,not later than ,january #a1 #bjah1 the ,comptroller ,general of the ,united ,states shall submit to ,congress a report on the impact of section #ahii;,b of the ,social ,security ,act1 as added by subsection 7a71 on ,medicare beneficiaries care1 ,medicare expenditures1 and ,medicare providers1 including the quality of care furnished under the ,medicare program4 7f7 ,application of definitions ,in this section1 the terms applicable healthcare delivery organization1 applicable historical period1 potentially preventable outcomes have the meanings given such terms in section #ahii;,b7j7 of the ,social ,security ,act1 as added by subsection 7a74