Excerpts of S.2562 pertaining to ESRD and dialysis. Introduced by Sen. Max Baucus on 6/23/04.

SEC. 4. QUALITY PERFORMANCE INCENTIVE PAYMENT PROGRAM FOR PROVIDERS AND FACILITIES THAT PROVIDE SERVICES TO MEDICARE BENEFICIARIES WITH ESRD.

Section 1881(b) of the Social Security Act (42 U.S.C. 1395rr(b)), as amended by section 623(d)(1) of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (Public Law 108-173; 117 Stat. 2313), is amended--

(1) in paragraph (11)(B), by striking `paragraphs (12) and (13)' and inserting `paragraphs (12), (13), and (14)';

(2) in paragraph (12), by striking `In lieu of' and inserting `Subject to paragraph (14), in lieu of';

(3) in paragraph (13)(A), in the matter preceding clause (i), by striking `The payment amounts' and inserting `Subject to paragraph (14), the payment amounts'; and

(4) by adding at the end the following new paragraph:

`(14) RENAL DIALYSIS PERFORMANCE INCENTIVE PAYMENT PROGRAM-

`(A) ESTABLISHMENT OF PROGRAM-

`(i) IN GENERAL- The Secretary shall establish a program under which financial incentive payments are provided each year to providers of services and renal dialysis facilities that receive payments under paragraph (12) or (13) and demonstrate the provision of superior quality health care to individuals with end stage renal disease.

`(ii) PROGRAM TO BEGIN IN 2007- The Secretary shall establish the program so that National Performance Quality Payments (described in subparagraph (C)) and National Quality Improvement Payments (described in subparagraph (D)) are made with respect to 2007 and each subsequent year.

`(iii) REQUIREMENT- In order for a provider of services or a renal dialysis facility to be eligible for a financial incentive payment under this section, the provider or facility shall, not later than a date specified by the Secretary during the baseline year (as defined in subparagraph (D)(iv)), submit such data on the quality measures as the Secretary determines appropriate for the purpose of establishing a baseline with respect to the provider or facility.

`(iv) USE OF MOST RECENT DATA- Financial incentive payments under this paragraph shall be based upon the most recent available quality data as provided by the Consolidated Renal Operations in a Web-enabled Network (CROWN) system.

`(v) PEDIATRIC FACILITIES NOT INCLUDED IN PROGRAM- For purposes of this paragraph, including subparagraph (F)(i), the terms `renal dialysis facility' and `facility' do not include a renal dialysis facility at least 50 percent of whose patients are individuals under 18 years of age.

`(B) PAYMENTS-

`(i) IN GENERAL- Beginning with 2007, the Secretary shall allocate the total amount available for financial incentive payments in the year under subparagraph (F)(ii) as follows:

`(I) The amount allocated for National Performance Quality Payments shall be greater than the amount allocated for National Quality Improvement Payments.

`(II) With respect to National Performance Quality Payments, the per capita amount of the payments shall be greatest for the organizations offering the highest performing plans or contracts.

`(III) With respect to National Quality Improvement Payments, the per capita amount of the payments shall be greatest for the organizations offering plans or contracts with the highest degree of improvement.

`(ii) AMOUNT OF QUALITY INCENTIVE PAYMENT-

`(I) IN GENERAL- The amount of a financial incentive payment under subparagraph (C) or (D) to a provider of services or renal dialysis facility shall be determined by multiplying the number of beneficiaries who received dialysis services from the provider or facility during the year for which the payment is provided by a dollar
amount established by the Secretary that is the same with respect to each beneficiary receiving dialysis services from the provider or facility.

`(II) LIMITATION ON TOTAL AMOUNT OF QUALITY INCENTIVE PAYMENTS- The total amount of all the financial incentive payments given with respect to a year shall be equal to the amount available for such payments in the year under subparagraph (F)(ii).

`(iii) USE OF QUALITY INCENTIVE PAYMENTS- Financial incentive payments received under this paragraph may be used for the following purposes:

`(I) To invest in information technology systems that will improve the quality of care provided to individuals with end stage renal disease.

`(II) To initiate, continue, or enhance health care quality programs for individuals with end stage renal disease.

`(III) Any other purpose determined appropriate by the Secretary.

`(iv) LIMITATIONS ON QUALITY INCENTIVE PAYMENTS-

`(I) ONLY ELIGIBLE FOR 1 PAYMENT IN A YEAR- A provider of services or a renal dialysis facility may not receive more than 1 financial incentive payment under this paragraph in a year. If a provider of services or a renal dialysis facility is eligible for a National Performance Quality Payment and a National Quality Improvement Payment, the organization shall be given the National Performance Quality Payment.

`(II) SERVICES MUST BE AVAILABLE FOR ENTIRE YEAR- A provider of services or renal dialysis facility is not eligible for a financial incentive payment under this paragraph unless the provider or facility is in operation and providing dialysis services for the entire year for which the payment is provided.

`(C) NATIONAL PERFORMANCE QUALITY PAYMENTS- The Secretary shall make National Performance Quality Payments to the providers of services and renal dialysis facilities that receive ratings for the year in the top applicable percent of all providers and facilities rated by the Secretary pursuant to subparagraph (E) for the year. For purposes of the preceding sentence, the term `applicable percent' means a percent determined appropriate by the Secretary in consultation with the Quality Advisory Board, but in no case less than 20 percent.

`(D) NATIONAL QUALITY IMPROVEMENT PAYMENTS-

`(i) IN GENERAL- National Quality Improvement Payments shall be paid to each provider of services and renal dialysis facility that receives ratings under subparagraph (E) for the payment year that exceed the ratings received under such subparagraph for the provider or facility for the baseline year.

`(ii) NATIONAL IMPROVEMENT STANDARD- Beginning with 2009, the Secretary shall have the authority to implement a national improvement standard that providers of services and renal dialysis facilities must meet in order to receive a National Quality Improvement Payment.

`(iii) APPLICATION OF THRESHOLDS- In determining whether a rating received under subparagraph (E) for the payment year exceeds the rating received under such subsection for the baseline year, the Secretary shall hold any applicable thresholds constant.

`(iv) BASELINE YEAR DEFINED- In this subparagraph, the term `baseline year' means the year prior to the payment year.

`(E) RATING METHODOLOGY-

`(i) SCORING AND RANKING SYSTEMS-

`(I) IN GENERAL- The Secretary shall develop separate scoring and ranking systems for purposes of determining which providers of services and renal dialysis facilities qualify for--

`(aa) National Performance Quality Payments; and

`(bb) National Quality Improvement Payments.

`(II) REQUIREMENTS- In developing, implementing, and updating the scoring and ranking systems, the Secretary shall--

`(aa) consult with the Quality Advisory Board established under section 1898 and the network administrative organizations designated under subsection (c)(1)(A)(i)(II); and

`(bb) take into account the report on health care performance measures submitted by the Institute of Medicine of the National Academy of Sciences under section 238 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003.

`(ii) MEASURES-

`(I) IN GENERAL- Subject to subclause (II), in developing the scoring and ranking system under clause (i), the Secretary shall use all measures determined appropriate by the Secretary. Such measures may include the following:

`(aa) The measures profiled in the ESRD Clinical Performance Measures (CPM) project of the Centers for Medicare & Medicaid Services.

`(bb) The measures for bone disease to be determined by the K-DOQI project of the National Kidney Foundation.

`(II) Scoring and ranking system for national performance quality payments only based on measures of clinical effectiveness- The scoring and ranking system for National Performance Quality Payments shall only include measures of clinical effectiveness.

`(iii) WEIGHTS OF MEASURES- In developing the scoring and ranking systems under clause (i), the Secretary shall assign weights to the measures used by the Secretary under such system pursuant to clause (ii). In assigning such weights, the Secretary shall provide greater weight to the measures that measure clinical effectiveness.

`(iv) RISK ADJUSTMENT- In developing the scoring and ranking systems under clause (i), the Secretary shall establish procedures for adjusting the data used under the system to take into account differences in the health status of individuals receiving dialysis services from providers of services and renal dialysis facilities.

`(v) UPDATE-

`(I) IN GENERAL- The Secretary shall as determined appropriate, but in no case more often than once each 12-month period, update the scoring and ranking systems developed under clause (i), including the measures used by the Secretary under such system pursuant to clause (ii), the weights established pursuant to clause (iii), and the risk adjustment procedures established pursuant to clause (iv).

`(II) COMPARISON FOR NATIONAL QUALITY IMPROVEMENT PAYMENTS- Each update under subclause (I) of the National Quality Improvement Payments shall allow for the comparison of data from one year to the next for purposes of identifying which providers of services and renal dialysis facilities will receive such Payments.

`(III) CONSULTATION- In determining when and how to update the scoring and ranking systems under subclause (I), the Secretary shall consult with the Quality Advisory Board.

`(F) FUNDING OF PAYMENTS-

`(i) REDUCTION IN PAYMENTS- In order to provide the funding for the financial incentive payments under this paragraph, for each year (beginning with 2007), the Secretary shall reduce each payment under paragraphs (12) and (13) to a provider of service and a renal dialysis facility by an amount equal to 2 percent of the payment.

`(ii) AMOUNT AVAILABLE- The amount available for financial incentive payments under this section with respect to a year shall be equal to the amount of the reduction in expenditures under the Federal Supplementary Medical Insurance Trust Fund in the year as a result of the application of clause (i).'.

SEC. 5. MEDICARE INNOVATIVE QUALITY PRACTICE AWARD PROGRAM.

(a) ESTABLISHMENT- The Secretary of Health and Human Services (in this section referred to as the `Secretary') shall establish a program under which the Secretary shall award bonus payments to entities and individuals providing items and services under the medicare program under title XVIII of the Social Security Act that demonstrate innovative practices, structural improvements, or capacity enhancements that improve the quality of health care provided to medicare beneficiaries by such entities and individuals.

(b) PERIOD OF PROGRAM- Awards under the program shall be made during 2006, 2007, and 2008.

(c) SELECTION OF RECIPIENTS-

(1) IN GENERAL- The Secretary shall ensure that the entities and individuals that receive an award under this section have demonstrated improvements in the quality of health care provided to medicare beneficiaries by such entities and individuals through comparison with a control group or baseline evaluation. For purposes of the program, improvements in the quality of health care provided to medicare beneficiaries shall be defined as providing additional services, such as translator services and health literacy education services, or providing care to an expanded service area or an expanded population through telemedicine, increased cultural competence, or other means, in combination with improved health outcomes or reduced beneficiary costs.

(2) ALL ENTITIES AND INDIVIDUALS ELIGIBLE- Any entity, including a plan, or individual that is providing services under the medicare program is eligible for receiving an award under this section.

(3) CONSULTATION- In selecting the recipients of the awards under this section, the Secretary shall consult with the Quality Advisory Board established under section 1898 of the Social Security Act, as added by section 7.

(d) MINIMUM NUMBER OF AWARDS- The Secretary shall make at least 10 awards under this section in each year of the program.

(e) APPLICATION- An entity or individual desiring an award under this section shall submit an application to the Secretary at such time, in such manner, and accompanied by such information as the Secretary may reasonably require.

(f) AMOUNT OF AWARD-

(1) IN GENERAL- Subject to paragraph (2) and subsection (h), the Secretary shall determine the amount of awards under this section.

(2) REQUIREMENT- In determining the amount of awards under this section, the Secretary shall ensure that--

(A) no single award is excessive; and

(B) consideration is given to the number of beneficiaries served by the entity or individual receiving the award.

(g) REPORT- Not later than 6 months after the date on which the program established under subsection (a) ends, the Secretary shall submit to Congress a report on the program together with such recommendations for legislation or administrative action as the Secretary determines appropriate.

(h) FUNDING- Out of any funds in the Treasury not otherwise appropriated, there are appropriated $10,000,000 for each of 2006, 2007, and 2008 to carry out this section.

SEC. 6. QUALITY IMPROVEMENT DEMONSTRATION PROGRAM FOR PEDIATRIC RENAL DIALYSIS FACILITIES PROVIDING CARE TO MEDICARE BENEFICIARIES WITH END STAGE RENAL DISEASE.

(a) DEMONSTRATION PROJECTS-

(1) ESTABLISHMENT- The Secretary of Health and Human Services (in this section referred to as the `Secretary') shall conduct a 3-year demonstration program under which the Secretary establishes demonstration projects that encourage pediatric dialysis facilities to provide superior quality health care to individuals with end stage renal disease.

(2) CONSULTATION IN SELECTING SITES- In selecting the demonstration project sites under this section, the Secretary shall consult with the Quality Advisory Board established under section 1898 of the Social Security Act, as added by section 7.

(3) SUBMISSION OF QUALITY DATA- Under the demonstration projects, demonstration sites shall select appropriate measures of quality of care provided to individuals eligible for benefits under title XVIII of the Social Security Act who are under 18 years of age and shall report data on such measures to the Secretary.

(4) ASSESSMENT OF MEASURES- The Secretary, in consultation with the Quality Advisory Board, shall assess the validity and reliability of the measures selected under paragraph (2).

(b) WAIVER AUTHORITY- The Secretary may waive such requirements of titles XI and XVIII as may be necessary to carry out the purposes of the demonstration program established under this section.

(c) FUNDING-

(1) IN GENERAL- Subject to paragraph (2), the Secretary shall provide for the transfer from the Federal Supplementary Medical Insurance Trust Fund under section 1841 of the Social Security Act (42 U.S.C. 1395t) of such funds as are necessary for the costs of carrying out the demonstration program under this section.

(2) BUDGET NEUTRALITY- In conducting the demonstration program under this section, the Secretary shall ensure that the aggregate expenditures made by the Secretary do not exceed the amount which the Secretary would have expended if the demonstration program under this section was not implemented.

(d) REPORT- Not later than 6 months after the date on which the demonstration program established under this section ends, the Secretary shall prepare and submit to Congress a report on the demonstration program together with--

(1) recommendations on whether pediatric renal dialysis facilities should be included in the renal dialysis performance payment program under section 1881(b)(14) of the Social Security Act (42 U.S.C. 1395rr(b)(14)), as added by section 4(4); and

(2) such recommendations for legislation or administrative action as the Secretary determines appropriate.

(e) PEDIATRIC RENAL DIALYSIS FACILITY DEFINED- The term `pediatric renal dialysis facility' means a renal dialysis facility that receives payments under paragraph (12) or (13) of section 1881(b) of the Social Security Act (42 U.S.C. 1395rr(b)) and is not eligible to participate in the renal dialysis performance payment program under paragraph (14) of such section (as
added by section 4(4)) because of the application of subparagraph (A)(iv) of such paragraph.

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