,i  #aad? ,,congress  #b;d ,session  ,h4
 ,r4 #fbgd  ,,9 ,,! ,,h\se ,,(          
,,repres5tatives  ,septemb] #bh1        
#bjaf,mr4 ,pauls5 7= himself1 ,mr4      
,m>*ant1 & ,mr4 ,k9d7 introduc$ ! foll[+
 bill2 :i* 0 ref]r$ to ! ,committee on  
,ways & ,means  ,a ,,bill  ,to am5d     
title ,,xviii ( ! ,social ,security ,act
 to create inc5tives = heal?c>e provid]s
 to promote quality heal?c>e outcomes1 &
 = o!r purposes4  #a4 ,%ort title2 f9d+s
  7a7 ,%ort title ,?is ,act may be cit$ 
z ! ,hospital ,outcomes ,act ( #bjaf4   
7b7 ,f9d+s ,congress makes ! foll[+     
f9d+s3  7#a7 ,paym5t p5alties = hospital
 acquir$ conditions "u section #ahhf7p7 
( ! ,social ,security ,act1 z add$ by   
section #cjjh ( ! ,pati5t ,protection & 
,af=dable ,c>e ,act1 are bas$ on a      
limit$ numb] ( hospital acquir$         
conditions b are appli$ to all ,m$ic>e  
inpati5t prospective paym5ts to a       
hospital 7z def9$ 9 section #ahhf7;d7 ( 
! ,social ,security ,act71 result+ 9    
paym5t p5alties t are n proportional to 

! f9ancial impact ( ! hospital acquir$  
conditions4 ,! me?od ( risk adju/m5t us$
 to det]m9e ! hospital acquir$          
conditions p]=mance ( hospitals does n  
adequately acc\nt = ! *ronic illness    
burd5 & sev]ity ( illness ( ,m$ic>e     
b5efici>ies4  7#b7 ,paym5t p5alties =   
hospital readmissions "u section        
#ahhf7q7 ( ! ,social ,security ,act1 z  
add$ by section #cjbe ( ! ,pati5t       
,protection & ,af=dable ,c>e ,act1 are  
bas$ on a limit$ numb] ( cl9ical        
conditions1 includ+ readmissions t are n
 relat$ to ! prior dis*>ge & are n      
proportional to ! ov]all f9ancial impact
 ( ! readmission p]=mance ( ! hospital4 
,! me?od ( risk adju/m5t us$ to det]m9e 
! readmission p]=mance ( hospitals does 
n adequately acc\nt = ! *ronic illness  
burd5 & sev]ity ( illness ( ,m$ic>e     
b5efici>ies4  7#c7 ,! paym5t p5alties = 
hospital acquir$ conditions &           
readmission %\ld be re/ructur$ to be    
bas$ on a compreh5sive & cl9ically      
cr$ible def9ition ( pot5tially-avoidable

 complications & pot5tially-avoidable   
readmissions1 be bas$ on ! risk adju/$  
rate ( occurr5ce pot5tially-avoidable   
complications & pot5tially-avoidable    
readmissions & include bo? paym5t       
p5alties & bonuses t are proportional to
 ! actual f9ancial impact (             
pot5tially-avoidable complications &    
pot5tially-avoidable readmissions4  7#d7
 ,! exi/+ me?ods ( risk adju/m5t us$ to 
det]m9e ! quality ( c>e p]=mance (      
hospitals %\ld be re/ructur$ & replac$  
by a me?odology t is compos$ ( exhau/ive
 & mutually exclusive risk categories t 
are cl9ically cr$ible & explicitly      
recognize ! sev]ity ( illness & *ronic  
illness burd5 ( ,m$ic>e b5efici>ies1    
!reby acc\nt+ = pati5t *>act]i/ics t may
 impact access to c>e4  #b4 ,hospital   
outcomes  7a7 ,paym5t adju/m5ts =       
hospital outcomes ,section #ahhf ( !    
,social ,security ,act 7#db ,u4,s4,c4   
#acieww7 is am5d$ by add+ at ! end !    
foll[+ new subsection3  7t7 ,hospital   
outcomes  7#a7 ,9 g5]al ,9 ! case ( an  

applicable hospital = an applicable     
prospective p]iod beg9n+ on or aft]     
,octob] #a1 #bjag--  7,a7 = ea* dis*>ge 
( su* hospital occurr+ dur+ su* p]iod1 9
 addition to & aft] application ( any   
increase "u p>agraph 7#f7 ( subsection  
7o7 & any adju/m5t "u p>agraph 7#g7 (   
su* subsection to ! base op]at+ ,,drg   
paym5t am\nt 7z def9$ 9 p>agraph        
7#g77;,d7 ( su* subsection7 t w\ld      
o!rwise apply to su* hospital dur+ su*  
p]iod )\t application ( ?is subsection1 
su* op]at+ ,,drg paym5t am\nt %all be   
adju/$ by ! pot5tially-avoidable outcome
 adju/m5t factor describ$ 9 p>agraph    
7#b7 = ! hospital = su* p]iod2 &  7,b7 !
 pot5tially-avoidable outcome adju/m5t  
factor %all apply only ) respect to !   
applicable prospective p]iod1 & !       
,secret>y %all n take into acc\nt su*   
adju/m5t factor 9 mak+ paym5ts to       
hospitals "u ?is section 9 a subsequ5t  
applicable prospective p]iod4  7#b7     
,pot5tially-avoidable outcome adju/m5t  
factor  7,a7 ,9 g5]al ,= purposes (     

p>agraph 7#a71 ! pot5tially-avoidable   
outcome adju/m5t factor describ$ 9 ?is  
p>agraph = an applicable hospital = an  
applicable prospective p]iod1 subject to
 subp>agraph 7,b71 is equal to #a4j m9us
 ! pot5tially-avoidable outcome p]=mance
 fraction det]m9$ "u p>agraph 7#c7 = !  
hospital & p]iod4  7,b7                 
,hospital-specific cap & floor ,9 no    
circum/ance may ! pot5tially-avoidable  
outcome adju/m5t factor = an applicable 
hospital = an applicable prospective    
p]iod "u subp>agraph 7,a7 be--  7i7 =   
applicable prospective p]iods occurr+ 9 
fiscal ye>s #bjah ?r\gh #bjbj1 less ?an 
#j4ig or m ?an #a4jc2 &  7ii7 =         
applicable prospective p]iods occurr+ 9 
or aft] fiscal ye> #bjba1 less ?an #j4ie
 or m ?an #a4je4  7#c7 ,det]m9ation (   
pot5tially-avoidable outcome p]=mance   
fraction  7,a7 ,9 g5]al ,!              
pot5tially-avoidable outcome p]=mance   
fraction = an applicable hospital = an  
applicable prospective p]iod1 subject to
 subp>agraph 7,c71 is equal to ! ratio  

(--  7i7 ! total hospital-specific      
f9ancial impact1 z describ$ 9           
subp>agraph 7,b71 = ! hospital & data   
collection p]iod ) respect to su*       
applicable prospective p]iod2 to  7ii7 !
 aggregate am\nt ( /&>diz$ paym5ts 7z   
def9$ 9 p>agraph 7#d77;,g77ii77 made to 
! hospital dur+ ! data collection p]iod 
) respect to su* applicable prospective 
p]iod4  7,b7 ,total hospital-specific   
f9ancial impact describ$ ,= purposes (  
subp>agraph 7,a71 ! t]m total           
hospital-specific f9ancial impact means1
 ) respect to a hospital = an applicable
 prospective p]iod1 ! sum ( ! foll[+3   
7i7 ,! f9ancial impact det]m9$ 9        
accordance ) p>agraph 7#d77;,f7 = su*   
hospital & data collection p]iod )      
respect to ! p]=mance category describ$ 
9 p>agraph 7#e77;,a7 7relat+ to         
complications74  7ii7 ,! f9ancial impact
 det]m9$ 9 accordance ) subsection      
7#d77;,f7 = su* hospital & data         
collection p]iod ) respect to ! p]=mance
 category describ$ 9 p>agraph 7#e77;,b7 

7relat+ to readmissions74  7,c7 ,budget 
neutrality ( pot5tially-avoidable       
outcome adju/m5t factor across all      
hospitals ,! ,secret>y %all det]m9e a   
budget neutrality rate r$uction fraction
 t1 :5 appli$ 9 p>agraph 7#d77;,b77ii71 
w result 9 a pot5tially-avoidable       
outcome factor det]m9$ "u subp>agraph   
7,a7 = an applicable prospective p]iod t
 r$uces ! total paym5ts "u subsection   
7d7 across all applicable hospitals &   
all pot5tially-avoidable outcomes = su* 
p]iod by an am\nt equal to ! r$uction 9 
paym5ts "u su* subsection = su* p]iod t 
w\ld h result$ f ! application (        
subsections 7p7 & 7q7 if ! am5dm5ts made
 by ! ,hospital ,outcomes ,act ( #bjaf  
_h n appli$4  7#d7 ,process (           
det]m9ation ( pot5tially-avoidable      
outcomes p]=mance2 f9ancial impact ,=   
purposes ( p>agraph 7#c71 ! ,secret>y   
%all1 = ea* p]=mance category describ$ 9
 p>agraph 7#e7 & ea* data collection    
p]iod t is ) respect to an applicable   
prospective p]iod beg9n+ on or aft]     

,octob] #a1 #bjag1 det]m9e ea* ( !      
foll[+3  7,a7 ,nationwide-av]age rates  
,) respect to ea* risk category specifi$
 "u p>agraph 7#f77;,b71 ! ratio (-- 7i7 
! numb] ( dis*>ges occurr+ among all    
applicable hospitals dur+ su* applicable
 data collection p]iod t are ) respect  
to su* risk category & t involve !      
pot5tially-avoidable outcomes 9 su*     
p]=mance category2 to  7ii7 ! numb] (   
applicable dis*>ges among all applicable
 hospitals = su* applicable data        
collection p]iod & risk category4  7,b7 
,nationwide t>get rates ,) respect to   
ea* risk category specifi$ "u p>agraph  
7#f77;,b71 ! product (-- 7i7 subject to 
subp>agraph 7,h71 ! ratio det]m9$ "u    
subp>agraph 7,a7 = su* p]iod & risk     
category2 &  7ii7 ! budget neutrality   
rate r$uction fraction det]m9$ "u       
p>agraph 7#c77;,c7 = su* p]iod4  7,c7   
,hospital-specific actual numb] ,)      
respect to ea* applicable hospital & ea*
 su* risk category1 ! numb] ( dis*>ges  
occurr+ ) respect to su* hospital dur+  

su* applicable data collection p]iod t  
involve ! pot5tially-avoidable outcomes 
9 su* p]=mance category4  7,d7          
,hospital-specific expect$ numb] ,)     
respect to ea* applicable hospital1 ea* 
applicable data collection p]iod1 & ea* 
su* risk category1 ! numb] t is !       
product (--  7i7 subject to subp>agraph 
7,h71 ! ratio det]m9$ "u subp>agraph    
7,b7 = su* p]iod & risk category2 &     
7ii7 ! numb] ( applicable dis*>ges ( !  
hospital = su* p]iod & risk category4   
7,e7 ,hospital-specific                 
pot5tially-avoidable outcome p]=mance ,)
 respect to ea* applicable hospital &   
applicable data collection p]iod1 !     
diff]5ce betwe5--  7i7 ! sum ( ! numb]s 
det]m9$ "u subp>agraph 7,c7 = ! hospital
 = su* p]iod = all risk categories2 &   
7ii7 ! sum ( ! numb]s det]m9$ "u        
subp>agraph 7,d7 = ! hospital = su*     
p]iod = all risk categories4  7,f7      
,f9ancial impact  7i7 ,) respect to ea* 
applicable hospital & applicable data   
collection p]iod1 ! f9ancial impact     

attributable to pot5tially-avoidable    
outcomes p]=mance )9 su* p]=mance       
category1 det]m9$ z ! product ( !       
foll[+3  7,i7 ! diff]5ce calculat$ "u   
subp>agraph 7,e7 = su* hospital & p]iod2
 &  7,,ii7 ! f9ancial conv]sion factor  
det]m9$ 9 accordance ) clause 7ii7 = !  
p]=mance category4  7ii7 ,f9ancial      
conv]sion factors ,= purposes ( clause  
7i71 ! ,secret>y %all det]m9e a f9ancial
 conv]sion factor = ! p]=mance category 
t--  7,i7 9 ! case ( ! p]=mance category
 describ$ 9 p>agraph 7#e77;,a71 is1 )   
respect to inpati5t hospital s]vices t  
are furni%$ ) respect to a dis*>ge1     
equal to ! av]age am\nt ( increase 9 !  
/&>diz$ paym5ts = su* inpati5t hospital 
s]vices = su* dis*>ge t is attributable 
to ! pot5tially-avoidable complication2 
&  7,,ii7 9 ! case ( ! p]=mance category
 describ$ 9 p>agraph 7#e77;,b71 is1 )   
respect to an initial dis*>ge1 equal to 
! av]age /&>diz$ paym5t = inpati5t      
hospital s]vices t are furni%$ ) respect
 to a pot5tially-avoidable readmission  

foll[+ ! initial dis*>ge4  7,g7         
,def9itions ,= purposes ( ?is section3  
7i7 ,pot5tially-avoidable outcomes ,!   
t]m pot5tially-avoidable outcomes means1
 z applicable--  7,i7 a                 
pot5tially-avoidable complication )9 !  
category describ$ 9 p>agraph 7#e77;,a72 
&  7,,ii7 a pot5tially-avoidable        
readmission )9 ! category describ$ 9    
p>agraph 7#e77;,b74  7ii7 ,/&>diz$      
paym5ts ,! t]m /&>diz$ paym5t means     
paym5t = inpati5t hospital s]vices "u   
section #ahhf7;d7 furni%$ by an         
applicable hospital t is adju/$ to      
remove paym5t adju/m5ts t are n directly
 relat$ to ! am\nt & type ( s]vices to  
be utiliz$ = pati5t c>e 7su* z local or 
regional price diff]5ces1 graduate      
indirect m$ical education paym5ts1      
disproportionate %>e paym5ts1 & su* o!r 
adju/m5ts z may be det]m9$ by !         
,secret>y74  7iii7 ,applicable dis*>ges 
,) respect to an applicable data        
collection p]iod & risk category1 ! t]m 
applicable dis*>ges means1 9 ! case (-- 

7,i7 ! p]=mance category describ$ 9     
p>agraph 7#e77;,a71 dis*>ges occurr+    
dur+ su* applicable data collection     
p]iod t are ) respect to su* risk       
category2 &  7,,ii7 ! p]=mance category 
describ$ 9 p>agraph 7#e77;,b71 dis*>ges 
occurr+ dur+ su* applicable data        
collection p]iod t are ) respect to su* 
risk category & t are n id5tifi$ z      
pot5tially-avoidable readmissions "u !  
me?odology select$ "u p>agraph          
7#f77;,a74  7,h7 ,exception to use (    
nationwide-av]age rates ,9 ! case t !   
me?odology select$ "u p>agraph 7#f77;,b7
 = su* p]=mance category does n meet !  
crit]ia describ$ 9 clause 7iii7 ( su*   
p>agraph1 ! ,secret>y %all--  7i7       
develop gr\ps ( hospitals bas$ on !     
ov]all proportion ( inpati5ts 9 su*     
hospitals :o are full-b5efit dual       
eligible individuals 7z def9$ 9 section 
#aice7;c77#f772  7ii7 compute1 ) respect
 to ea* su* gr\p & ea* risk category    
specifi$ "u p>agraph 7#f77;,b7-- 7,i7 ! 
numb] ( dis*>ges occurr+ among all      

applicable hospitals 9 su* gr\p dur+ su*
 applicable data collection p]iod t are 
) respect to su* risk category & t      
involve ! pot5tially-avoidable outcomes 
9 su* p]=mance category2 to  7,,ii7 !   
numb] ( applicable dis*>ges occurr+     
among all applicable hospitals 9 su*    
gr\p = su* applicable data collection   
p]iod & risk category2 &  7iii7 treat   
ea* ref]5ce 9 ?is p>agraph to ! ratio   
det]m9$ "u subp>agraph 7,a7 or 7,b71 z  
applicable1 = a p]iod & risk category z 
a ref]5ce to ! ratio det]m9$ "u         
subp>agraph 7,a7 or 7,b71 z applicable1 
= a gr\p1 p]iod1 & risk category4  7#e7 
,p]=mance categories describ$ ,!        
p]=mance categories describ$ 9 ?is      
p>agraph are ! foll[+ categories3 7,a7  
,pot5tially-avoidable complications ,!  
category ( complications 7ref]r$ to 9   
?is section z pot5tially-avoidable      
complications7 t1 ) respect to items &  
s]vices furni%$ to an individual entitl$
 to b5efits "u "p ,a 9 an applicable    
hospital1 meet all ( ! foll[+           

requirem5ts3  7i7 ,! complication occurs
 dur+ ! /ay ( ! individual & 0 n pres5t 
at ! "t ( ! admission ( su* individual  
to su* hospital z an inpati5t4  7ii7 ,! 
complication is a h>mful ev5t 7su* z a  
surgical complication7 or an acute      
illness 7su* z an infection or an acute 
exac]bation ( und]ly+ *ronic disease74  
7iii7 ,! complication is pot5tially     
avoidable ) adequate c>e & treatm5t4    
7iv7 ,! complication is n a natural     
progression ( ! und]ly+ illnesses ( !   
individual t are pres5t on admission (  
su* individual to su* hospital4  7v7 ,! 
complication may be reasonably con/ru$ z
 relat$ to ! c>e r5d]$ dur+ ! /ay ( !   
individual at ! hospital4  7,b7         
,pot5tially-avoidable readmissions  7i7 
,9 g5]al ,! category ( readmissions     
7ref]r$ to 9 ?is section z              
pot5tially-avoidable readmissions7 (    
individuals entitl$ to b5efits "u "p ,a 
to any hospitals foll[+ a dis*>ge       
7ref]r$ to 9 ?is section z an initial   
dis*>ge7 ( su* individuals to an        

applicable hospital if ! initial dis*>ge
 & readmission involv$ satisfy all ( !  
foll[+ requirem5ts3  7,i7 ,! readmission
 ( ! individual c\ld reasonably h be5   
prev5t$ by-- 7aa7 ! provision (         
appropriate c>e dur+ ! episode ( c>e    
end+ 9 su* initial dis*>ge t 0 consi/5t 
) accept$ /&>ds2  7bb7 adequate dis*>ge 
plann+ ) respect to su* initial dis*>ge2
  7cc7 adequate po/-dis*>ge foll[-up )  
respect to su* initial dis*>ge2 or  7dd7
 improv$ coord9ation betwe5 ! provid]s  
furni%+ ! inpati5t or outpati5t hospital
 s]vices dur+ ! episode ( c>e end+ 9 su*
 initial dis*>ge & ! provid]s furni%+   
c>e dur+ ! po/-dis*>ge p]iod ) respect  
to su* initial dis*>ge4  7,,ii7 ,!      
readmission is = a condition or proc$ure
 relat$ to ! episode ( c>e end+ 9 su*   
initial dis*>ge1 includ+ a readmission =
 a condition or proc$ure t is any ( !   
foll[+3  7aa7 ,! same 7or a closely     
relat$7 condition or proc$ure z !       
condition address$ 91 or ! proc$ure     
provid$ dur+ ! episode ( c>e end+ 9 su* 

initial dis*>ge4  7bb7 ,an infection or 
o!r complication ( c>e provid$ dur+ !   
episode ( c>e end+ 9 su* initial        
dis*>ge4  7cc7 ,a condition or proc$ure 
indicative ( a fail$ proc$ure provid$   
dur+ ! episode ( c>e end+ 9 su* initial 
dis*>ge4  7dd7 ,an acute decomp5sation (
 a coexi/+ *ronic disease t 0           
precipitat$ by ! c>e furni%$ dur+ !     
episode ( c>e end+ 9 su* initial        
dis*>ge4  7,,iii7 ,! readmission is n a 
docum5t$ readmission ) respect to a     
docum5t$ dis*>ge t 0 initiat$ by !      
individual contr>y to m$ical advice     
provid$ to su* individual dur+ ! episode
 ( c>e ) respect to su* initial dis*>ge4
  7,,iv7 ,! readmission c\ld n          
reasonably be consid]$ a plann$         
readmission4  7,v7 ,! readmission occurs
 dur+ ! #cj-;day p]iod foll[+ an        
inpati5t dis*>ge ( su* an individual f !
 applicable hospital ) respect to su*   
initial dis*>ge4  7,,vi7 ,! readmission 
0 n due to a traumatic injury t occurr$ 
aft] ! episode ( c>e end+ 9 su* initial 

dis*>ge4  7,,vii7 ,! readmission does n 
fall "u su* o!r exclusions z ! ,secret>y
 det]m9es appropriate4  7ii7 ,def9itions
 ,= purposes ( ?is subsection3  7,i7    
,readmission ,! t]m readmission means a 
readmission t satisfies ! crit]ia       
describ$ 9 clause 7i77,v74  7,,ii7      
,docum5t$ ,! t]m docum5t$ means1 )      
respect to a readmission or dis*>ge 7z  
applicable7 ( an individual entitl$ to  
b5efits "u "p ,a1 t ! circum/ances ( su*
 readmission or dis*>ge are docum5t$ 9 !
 m$ical record ( ! individual4  7#f7    
,selection ( me?ods = id5tify+          
pot5tially-avoidable outcomes & me?od ( 
risk adju/m5t  7,a7 ,me?ods = id5tify+  
pot5tially-avoidable outcomes ,!        
,secret>y %all select a me?odology =    
id5tify+ pot5tially-avoidable           
complications & a me?odology = id5tify+ 
pot5tially-avoidable readmissions1 &    
%all specify ! circum/ances "u :i* su*  
complications & su* readmissions w\ld be
 consid]$ pot5tially-avoidable4 ,ea* su*
 me?odology %all meet ! foll[+ crit]ia3 

7i7 ,! me?odology %all provide-- 7,i7 9 
! case ( pot5tially-avoidable           
complications1 a compreh5sive           
id5tification ( all conditions t c\ld   
reasonably be consid]$ a complication ( 
c>e t meets ! requirem5ts "u p>agraph   
7#e77;,a7 to be includ$ z a             
pot5tially-avoidable complication2 &    
7,,ii7 9 ! case ( pot5tially-avoidable  
readmissions1 a compreh5sive            
id5tification ( all initial dis*>ges    
describ$ 9 p>agraph 7#e77;,b7 &         
correspond+ readmissions describ$ 9 su* 
p>agraph t ea* meet ! requirem5ts = su* 
readmission to be includ$ z a           
pot5tially-avoidable readmission4  7ii7 
,to ! ext5t possible1 ! me?odology %all 
be a me?odology t has be5 successfully  
implem5t$ = ! purpose ( adju/+ paym5ts  
to hospitals by a ,/ate plan "u title   
,,xix or by a major comm]cial pay] or be
 a me?odology t has be5 c]tifi$ by an   
entity ) a contract "u section          
#ahij7;a74  7iii7 ,! me?odology %all be 
op51 transp>5t1 & available = review &  

comm5t by ! public4  7iv7 ,! ,secret>y  
may select propriet>y me?odologies t    
meet ! crit]ia 9 clauses 7i7 ?r\gh      
7iii74  7,b7 ,selection crit]ia = me?od 
( risk adju/m5t ,= purposes ( p>agraph  
7#d71 ! ,secret>y %all1 ) respect to ea*
 category describ$ 9 a subp>agraph (    
p>agraph 7#e71 select a me?odology =    
specify+ risk categories & = assign+    
individuals entitl$ to b5efits "u "p ,a 
to su* categories1 & %all s specify su* 
risk categories & s assign su*          
individuals to su* categories4 ,ea* su* 
me?odology %all meet ! foll[+ crit]ia3  
7i7 ,! me?odology %all result 9 an      
exhau/ive & mutually exclusive li/ (    
risk categories4  7ii7 ,! me?odology    
%all be cl9ically cr$ible & explicitly  
acc\nt = ! sev]ity ( illness1 *ronic    
illness burd51 & ext5sive comorbid      
diseases & high sev]ity ( illness (     
pati5ts4  7iii7 ,! me?odology %all      
acc\nt = pati5t *>act]i/ics t may impact
 access to c>e4  7iv7 ,! me?odology %all
 assign a risk category to an individual

 bas$ on ! condition ( ! individual at !
 "t (--  7,i7 9 ! case (                
pot5tially-avoidable complications1     
hospital admission2 &  7,,ii7 9 ! case (
 pot5tially-avoidable readmissions1     
hospital dis*>ge ) respect to ! initial 
dis*>ge4  7v7 ,to ! ext5t possible1 !   
me?odology %all be a me?odology t has   
be5 successfully implem5t$ = ! purpose (
 adju/+ paym5ts to hospitals by a ,/ate 
plan "u title ,,xix or by a major       
comm]cial pay] or be a me?odology t has 
be5 c]tifi$ by an entity ) a contract "u
 section #ahij7;a74  7vi7 ,! me?odology 
%all be op51 transp>5t1 & available =   
review & comm5t by ! public4  7vii7 ,!  
,secret>y may select propriet>y         
me?odologies t meet ! crit]ia 9 clauses 
7i7 ?r\gh 7vi74  7,c7 ,publication (    
specifications ,n lat] ?an #ae days     
prior to ea* applicable prospective ye>1
 ! ,secret>y %all make available1 su* z 
by publicly po/+ on ! ,int]net ,web site
 ( ! ,c5t]s = ,m$ic>e  ,m$icaid ,s]vices
 ! annual updates to ea* me?odology     

select$ "u a subp>agraph ( ?is p>agraph4
  7#g7 ,report+ by ,secret>y  7,a7      
,reports to hospitals ,= ea* data       
collection p]iod t is ) respect to an   
applicable prospective p]iod beg9n+ on  
or aft] ,octob] #a1 #bjag1 ! ,secret>y  
%all provide to ea* applicable hospital1
 n lat] ?an ! fir/ day ( su* applicable 
prospective p]iod1 a confid5tial report 
) respect to ! pot5tially-avoidable     
outcomes ( su* hospital dur+ su* data   
collection p]iod4  7,b7 ,reports to     
public ,= ea* data collection p]iod t is
 ) respect to an applicable prospective 
p]iod describ$ 9 p>agraph 7#a71 !       
,secret>y %all1 n lat] ?an #ij days aft]
 ! fir/ day ( su* applicable prospective
 p]iod1 make available to ! public      
7includ+ by po/+ on ! ,hospital ,comp>e 
,web site7 9 an easily und]/&able =mat  
in=mation reg>d+ ! p]=mance ( ea*       
applicable hospital dur+ su* data       
collection p]iod ) respect to           
pot5tially-avoidable outcomes4  7#h7    
,def9itions ,9 ?is subsection3 7,a7     

,applicable hospital ,! t]m applicable  
hospital means a subsection 7d7         
hospital4  7,b7 ,data collection p]iod  
,! t]m data collection p]iod means1 )   
respect to an applicable prospective    
p]iod1 a p]iod specifi$ by ! ,secret>y t
 is ! mo/ rec5t p]iod = :i* data are    
available = purposes ( det]m9+ !        
pot5tially-avoidable outcome adju/m5t   
factor describ$ 9 p>agraph 7#b7 to be   
appli$ = su* applicable prospective     
p]iod4  7,c7 ,applicable prospective    
p]iod ,! t]m applicable prospective     
p]iod means a fiscal ye>4  7#i7         
,limitation on judicial review ,!re %all
 be no adm9i/rative or judicial review  
"u section #ahfi1 section #ahgh1 or     
o!rwise ( a pot5tially-avoidable outcome
 adju/m5t factor appli$ "u ?is section4 
4  7b7 ,con=m+ am5dm5ts  7#a7           
,relation%ip to exi/+ paym5ts ,section  
#ahhf7o7 ( ! ,social ,security ,act 7#db
 ,u4,s4,c4 #acieww7o77 is am5d$-- 7,a7 9
 p>agraph 7#f77;,a71 by ins]t+ & be=e   
application ( subsection 7t7 aft]       

7#g77;,b77i72 &  7,b7 9 p>agraph        
7#g77;,b77i71 by ins]t+ 1 be=e          
application ( subsection 7t71 aft] ,!   
,secret>y %all4  7#b7 ,sunsett+ exi/+   
adju/m5t = complications ,section       
#ahhf7p7 ( ! ,social ,security ,act 7#db
 ,u4,s4,c4 #acieww7p77 is am5d$--  7,a7 
9 p>agraph 7#a71 by ins]t+ 7be=e fiscal 
ye> #bjah7 aft] a subsequ5t fiscal ye>2 
&  7,b7 9 p>agraph 7#e71 by ins]t+ 7be=e
 fiscal ye> #bjah7 aft] ea* subsequ5t   
fiscal ye>4  7#c7 ,sunsett+ exi/+       
adju/m5t = readmissions ,section        
#ahhf7q7 ( ! ,social ,security ,act 7#db
 ,u4,s4,c4 #acieww7q77 is am5d$-- 7,a7 9
 p>agraph 7#a71 by ins]t+ & end+ be=e   
,octob] #a1 #bjag aft] ,octob] #a1      
#bjab12  7,b7 9 p>agraph 7#c77;,c77iii71
 by ins]t+ be=e fiscal ye> #bjah aft] & 
subsequ5t fiscal ye>s2 &  7,c7 9        
p>agraph 7#e77;,b71 by ins]t+ & end+ )  
fiscal ye> #bjag aft] fiscal ye> #bjae4