Sec. 3008. Payment Adjustment For Conditions Acquired In Hospitals
(a) In General- Section 1886 of the Social Security Act (42 U.S.C. 1395ww), as amended by section 3001, is amended by adding at the end the following new subsection:

‘(p) Adjustment to Hospital Payments for Hospital Acquired Conditions-

‘(1) IN GENERAL- In order to provide an incentive for applicable hospitals to reduce hospital acquired conditions under this title, with respect to discharges from an applicable hospital occurring during fiscal year 2015 or a subsequent fiscal year, the amount of payment under this section or section 1814(b)(3), as applicable, for such discharges during the fiscal year shall be equal to 99 percent of the amount of payment that would otherwise apply to such discharges under this section or section 1814(b)(3) (determined after the application of subsections (o) and (q) and section 1814(l)(4) but without regard to this subsection).

‘(2) APPLICABLE HOSPITALS-

‘(A) IN GENERAL- For purposes of this subsection, the term ‘applicable hospital’ means a subsection (d) hospital that meets the criteria described in subparagraph (B).

‘(B) CRITERIA DESCRIBED-

‘(i) IN GENERAL- The criteria described in this subparagraph, with respect to a subsection (d) hospital, is that the subsection (d) hospital is in the top quartile of all subsection (d) hospitals, relative to the national average, of hospital acquired conditions during the applicable period, as determined by the Secretary.

‘(ii) RISK ADJUSTMENT- In carrying out clause (i), the Secretary shall establish and apply an appropriate risk adjustment methodology.

‘(C) EXEMPTION- In the case of a hospital that is paid under section 1814(b)(3), the Secretary may exempt such hospital from the application of this subsection if the State which is paid under such section submits an annual report to the Secretary describing how a similar program in the State for a participating hospital or hospitals achieves or surpasses the measured results in terms of patient health outcomes and cost savings established under this subsection.

‘(3) HOSPITAL ACQUIRED CONDITIONS- For purposes of this subsection, the term ‘hospital acquired condition’ means a condition identified for purposes of subsection (d)(4)(D)(iv) and any other condition determined appropriate by the Secretary that an individual acquires during a stay in an applicable hospital, as determined by the Secretary.

‘(4) APPLICABLE PERIOD- In this subsection, the term ‘applicable period’ means, with respect to a fiscal year, a period specified by the Secretary.
‘(5) REPORTING TO HOSPITALS- Prior to fiscal year 2015 and each subsequent fiscal year, the Secretary shall provide confidential reports to applicable hospitals with respect to hospital acquired conditions of the applicable hospital during the applicable period.

‘(6) REPORTING HOSPITAL SPECIFIC INFORMATION-

‘(A) IN GENERAL- The Secretary shall make information available to the public regarding hospital acquired conditions of each applicable hospital.

‘(B) OPPORTUNITY TO REVIEW AND SUBMIT CORRECTIONS- The Secretary shall ensure that an applicable hospital has the opportunity to review, and submit corrections for, the information to be made public with respect to the hospital under subparagraph (A) prior to such information being made public.

‘(C) WEBSITE- Such information shall be posted on the Hospital Compare Internet website in an easily understandable format.

‘(7) LIMITATIONS ON REVIEW- There shall be no administrative or judicial review under section 1869, section 1878, or otherwise of the following:

‘(A) The criteria described in paragraph (2)(A).

‘(B) The specification of hospital acquired conditions under paragraph (3).

‘(C) The specification of the applicable period under paragraph (4).

‘(D) The provision of reports to applicable hospitals under paragraph (5) and the information made available to the public under paragraph (6).’.

(b) Study and Report on Expansion of Healthcare Acquired Conditions Policy to Other Providers-

(1) STUDY- The Secretary of Health and Human Services shall conduct a study on expanding the healthcare acquired conditions policy under subsection (d)(4)(D) of section 1886 of the Social Security Act (42 U.S.C. 1395ww) to payments made to other facilities under the Medicare program under title XVIII of the Social Security Act, including such payments made to inpatient rehabilitation facilities, long-term care hospitals (as described in subsection(d)(1)(B)(iv) of such section), hospital outpatient departments, and other hospitals excluded from the inpatient prospective payment system under such section, skilled nursing facilities, ambulatory surgical centers, and health clinics. Such study shall include an analysis of how such policies could impact quality of patient care, patient safety, and spending under the Medicare program.

(2) REPORT- Not later than January 1, 2012, the Secretary shall submit to Congress a report containing the results of the study conducted under paragraph (1), together with recommendations for such legislation and administrative action as the Secretary determines appropriate.