42 U.S. Code § 1395cc–4 - National pilot program on payment bundling
(1) In general
The Secretary shall establish a pilot program for integrated care during an episode of care provided to an applicable beneficiary around a hospitalization in order to improve the coordination, quality, and efficiency of health care services under this subchapter.
In this section:
(A) Applicable beneficiary
The term “applicable beneficiary” means an individual who—
(i) is entitled to, or enrolled for, benefits under part A and enrolled for benefits under part B of such subchapter, but not enrolled under part C or a PACE program under section 1395eee of this title; and
(B) Applicable condition
The term “applicable condition” means 1 or more of 10 conditions selected by the Secretary. In selecting conditions under the preceding sentence, the Secretary shall take into consideration the following factors:
(iii) Whether a condition is one for which there is evidence of an opportunity for providers of services and suppliers to improve the quality of care furnished while reducing total expenditures under this subchapter.
(iv) Whether a condition has significant variation in—
(v) Whether a condition is high-volume and has high post-acute care expenditures under this subchapter.
(C) Applicable services
The term “applicable services” means the following:
(iv) Post-acute care services, including home health services, skilled nursing services, inpatient rehabilitation services, and inpatient hospital services furnished by a long-term care hospital.
(D) Episode of care
(i) In general Subject to clause (ii), the term “episode of care” means, with respect to an applicable condition and an applicable beneficiary, the period that includes—
(I) the 3 days prior to the admission of the applicable beneficiary to a hospital for the applicable condition;
(E) Physicians’ services
(G) Provider of services
(b) Developmental phase
(1) Determination of patient assessment instrument
The Secretary shall determine which patient assessment instrument (such as the Continuity Assessment Record and Evaluation (CARE) tool) shall be used under the pilot program to evaluate the applicable condition of an applicable beneficiary for purposes of determining the most clinically appropriate site for the provision of post-acute care to the applicable beneficiary.
(2) Development of quality measures for an episode of care and for post-acute care
(A) In general
The Secretary, in consultation with the Agency for Healthcare Research and Quality and the entity with a contract under section 1395aaa (a) of this title, shall develop quality measures for use in the pilot program—
(B) Site-neutral post-acute care quality measures
Any quality measures developed under subparagraph (A)(ii) shall be site-neutral.
(C) Coordination with quality measure development and endorsement procedures
The Secretary shall ensure that the development of quality measures under subparagraph (A) is done in a manner that is consistent with the measures developed and endorsed under section  1395aaa and 1395aaa–1 of this title that are applicable to all post-acute care settings.
(A) In general
Subject to subparagraph (B), the pilot program shall be conducted for a period of 5 years.
The Secretary may, at any point after January 1, 2016, expand the duration and scope of the pilot program, to the extent determined appropriate by the Secretary, if—
(i) the Secretary determines that such expansion is expected to—
(ii) the Chief Actuary of the Centers for Medicare & Medicaid Services certifies that such expansion would reduce program spending under this subchapter; and
(2) Participating providers of services and suppliers
(A) In general
An entity comprised of providers of services and suppliers, including a hospital, a physician group, a skilled nursing facility, and a home health agency, who are otherwise participating under this subchapter, may submit an application to the Secretary to provide applicable services to applicable individuals under this section.
(3) Payment methodology
(A) In general
(i) Establishment of payment methods The Secretary shall develop payment methods for the pilot program for entities participating in the pilot program. Such payment methods may include bundled payments and bids from entities for episodes of care. The Secretary shall make payments to the entity for services covered under this section.
(ii) No additional program expenditures Payments under this section for applicable items and services under this subchapter (including payment for services described in subparagraph (B)) for applicable beneficiaries for a year shall be established in a manner that does not result in spending more for such entity for such beneficiaries than would otherwise be expended for such entity for such beneficiaries for such year if the pilot program were not implemented, as estimated by the Secretary.
(B) Inclusion of certain services
A payment methodology tested under the pilot program shall include payment for the furnishing of applicable services and other appropriate services, such as care coordination, medication reconciliation, discharge planning, transitional care services, and other patient-centered activities as determined appropriate by the Secretary.
(C) Bundled payments
(i) In general A bundled payment under the pilot program shall—
(I) be comprehensive, covering the costs of applicable services and other appropriate services furnished to an individual during an episode of care (as determined by the Secretary); and
(4) Quality measures
(A) In general
The Secretary shall establish quality measures (including quality measures of process, outcome, and structure) related to care provided by entities participating in the pilot program. Quality measures established under the preceding sentence shall include measures of the following:
(B) Reporting on quality measures
(i) In general A entity shall submit data to the Secretary on quality measures established under subparagraph (A) during each year of the pilot program (in a form and manner, subject to clause (iii), specified by the Secretary).
(ii) Submission of data through electronic health record To the extent practicable, the Secretary shall specify that data on measures be submitted under clause (i) through the use of an qualified electronic health record (as defined in section 300jj (13) of this title) in a manner specified by the Secretary.
The Secretary may waive such provisions of this subchapter and subchapter XI as may be necessary to carry out the pilot program.
(e) Independent evaluation and reports on pilot program
(1) Independent evaluation
The Secretary shall conduct an independent evaluation of the pilot program, including the extent to which the pilot program has—
(A) Interim report
Not later than 2 years after the implementation of the pilot program, the Secretary shall submit to Congress a report on the initial results of the independent evaluation conducted under paragraph (1).
The Secretary shall consult with representatives of small rural hospitals, including critical access hospitals (as defined in section 1395x (mm)(1) of this title), regarding their participation in the pilot program. Such consultation shall include consideration of innovative methods of implementing bundled payments in hospitals described in the preceding sentence, taking into consideration any difficulties in doing so as a result of the low volume of services provided by such hospitals.
(g) Application of pilot program to continuing care hospitals
(1) In general
In conducting the pilot program, the Secretary shall apply the provisions of the program so as to separately pilot test the continuing care hospital model.
(2) Special rules
In pilot testing the continuing care hospital model under paragraph (1), the following rules shall apply:
(A) Such model shall be tested without the limitation to the conditions selected under subsection (a)(2)(B).
(3) Continuing care hospital defined
In this subsection, the term “continuing care hospital” means an entity that has demonstrated the ability to meet patient care and patient safety standards and that provides under common management the medical and rehabilitation services provided in inpatient rehabilitation hospitals and units (as defined in section 1395ww (d)(1)(B)(ii) of this title), long term care hospitals (as defined in section 1395ww (d)(1)(B)(iv)(I) of this title), and skilled nursing facilities (as defined in section 1395i–3 (a) of this title) that are located in a hospital described in section 1395ww (d) of this title.
 So in original. Probably should be “sections”.
Source(Aug. 14, 1935, ch. 531, title XVIII, § 1866D, as added and amended Pub. L. 111–148, title III, § 3023, title X, § 10308(a), (b)(1),Mar. 23, 2010, 124 Stat. 399, 941, 942.)
References in Text
Parts A, B, and C, referred to in subsec. (a)(2)(A)(i), are classified to sections 1395c et seq., 1395j et seq., and 1395w–21 et seq., respectively, of this title.
Another section 1866D of act Aug. 14, 1935, was renumbered section 1866E and is classified to section 1395cc–5 of this title.
2010—Pub. L. 111–148, § 10308(b)(1), made technical correction to directory language of Pub. L. 111–148, § 3023, which enacted this section.
Subsec. (a)(2)(B). Pub. L. 111–148, § 10308(a)(1), substituted “10 conditions” for “8 conditions”.
Subsec. (c)(1)(B). Pub. L. 111–148, § 10308(a)(2), added subpar. (B) and struck out former subpar. (B). Prior to amendment, text read as follows: “The Secretary may extend the duration of the pilot program for providers of services and suppliers participating in the pilot program as of the day before the end of the 5-year period described in subparagraph (A), for a period determined appropriate by the Secretary, if the Secretary determines that such extension will result in improving or not reducing the quality of patient care and reducing spending under this subchapter.”
Subsec. (g). Pub. L. 111–148, § 10308(a)(3), added subsec. (g) and struck out former subsec. (g). Prior to amendment, text read as follows: “Not later than January 1, 2016, the Secretary shall submit a plan for the implementation of an expansion of the pilot program if the Secretary determines that such expansion will result in improving or not reducing the quality of patient care and reducing spending under this subchapter.”