text: SECTION 1. SHORT TITLE.
  
      This Act may be cited as the ``Improved Medical Decision Incentive 
  Act of 2007''.
  
  SEC. 2. FINDINGS.
  
      Congress makes the following findings:
              (1) The United States spends more per capita on health care 
          than any other nation, and yet it has mediocre health outcomes, 
          including the second-highest infant mortality rate of all 
          industrialized nations.
              (2) The efficacy of best practices guidelines in improving 
          health care delivery and patient outcomes is well established.
              (3) Existing payment systems compensate physicians without 
          adequate attention to the appropriateness or quality of care 
          delivered and often without reference to established best 
          practices.
              (4) Identification of and adherence to best practices can 
          improve the quality of health care while reducing overall costs 
          to the health care system.
              (5) Orderly administrative proceedings involving 
          knowledgeable professionals will enhance best practices for 
          health care.
              (6) Control of medical practices through denial of claims 
          by insurance companies has proven wasteful and confusing, and 
          has failed to motivate adequate development and use of best 
          practices for health care.
  
  SEC. 3. VOLUNTARY STATE DEVELOPMENT AND APPROVAL OF QUALIFYING BEST 
                PRACTICES; INCENTIVES FOR PRIVATE INSURERS.
  
      (a) State Approval of Best Practices.--
              (1) In general.--A State health department may approve best 
          practices in a course of, or as a means of treatment for, a 
          particular condition, illness, or procedure, as the qualifying 
          standard of care for the State in order to take advantage of 
          the differential rates of payment implemented under sections 
          1898 and 1902(dd) of the Social Security Act (as added by 
          sections 4 and 5, respectively) and the private insurance 
          incentive under subsection (b).
              (2) Qualifying process for state approval.--In order for 
          best practices approved by a State under paragraph (1) to 
          qualify as best practices for purposes of implementing such 
          differential rates of payment and for purposes of such private 
          insurance incentive, a State health department shall--
                      (A) allow any duly constituted State medical 
                  society or medical specialty group to file with the 
                  State health department a course or means of treatment 
                  representing best practices for a particular condition, 
                  illness, or procedure to be applicable in the State, 
                  including cost-effective prevention and management 
                  measures;
                      (B) provide for notice and hearing consistent with 
                  the administrative procedures of the State with respect 
                  to the approval of best practices for a particular 
                  condition, illness, or procedure;
                      (C) permit any health insurer described in 
                  subsection (b)(1), including any individual authorized 
                  by the Secretary of Health and Human Services to act as 
                  a representative of the Medicare and Medicaid programs 
                  under titles XVIII and XIX, respectively, of the Social 
                  Security Act (42 U.S.C. 1395 et seq.; 1396 et seq.), to 
                  intervene in any administrative proceeding to approve 
                  such best practices;
                      (D) provide appropriate notice of any such 
                  administrative proceeding to established advocacy 
                  groups concerned with the condition or illness involved 
                  in the proceeding; and
                      (E) in the case where the State health department 
                  determines that a course of treatment filed in 
                  accordance with subparagraph (A) would lower system 
                  costs and improve quality of care, approve that best 
                  practices course of treatment within its jurisdiction 
                  as the qualifying standard of care under this 
                  subsection for that condition, illness, or procedure.
              (3) Priority of approvals.--State health departments are 
          encouraged to prioritize approval of best practices that 
          address conditions, illnesses, or procedures where those best 
          practices are reasonably anticipated to result in the greatest 
          overall cost savings and quality improvements.
              (4) Approval of qualifying best practices.--If, at the 
          conclusion of a process that meets the requirements of 
          paragraph (2), the State health department approves best 
          practices (as described in paragraph (1)), those best practices 
          shall be--
                      (A) deemed qualifying best practices;
                      (B) the basis for differential rates of payment 
                  under sections 1898 and 1902(dd) of the Social Security 
                  Act (as added by sections 4 and 5, respectively); and
                      (C) eligible for the private insurance incentive 
                  under subsection (b).
              (5) Definition of state.--In this subsection the term 
          ``State'' includes such regional or local areas as the State 
          health department determines appropriate.
      (b) Incentive for Private Insurers To Provide Timely Payment for 
  Services Provided in Accordance With Best Practices.--
              (1) In general.--Notwithstanding any other provision of 
          law, in the case where qualifying best practices have been 
          approved by a State health department in accordance with 
          subsection (a), any health insurer doing business in interstate 
          commerce and providing health care coverage within the State 
          shall pay all provider charges for any service provided in 
          accordance with such best practices not later than 30 days 
          after the date on which such service is provided and, absent 
          fraud, without regard for the insurer's internal utilization 
          review or claims denial procedure.
              (2) Standing to enforce.--Any provider or specialty group 
          that does business in a State where the State health department 
          has approved qualifying best practices in accordance with 
          subsection (a) may bring a civil action in an appropriate 
          United States district court to enjoin efforts by any health 
          insurer to challenge or delay payment for services provided by 
          the provider or a member of the specialty group in accordance 
          with such best practices approved in the State. The district 
          court shall award a provider or specialty group costs and 
          attorney's fees in such a civil action if the court finds that 
          the challenge or delay was a willful violation of this Act.
  
  SEC. 4. IMPLEMENTATION OF DIFFERENTIAL RATES OF PAYMENT FOR QUALIFYING 
                BEST PRACTICES UNDER THE MEDICARE PROGRAM.
  
      (a) Differential Rates of Payment for Qualifying Best Practices.--
  Title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) is 
  amended by adding at the end the following new section:
  
       ``differential rates of payment for qualifying best practices
  
      ``Sec. 1898.  (a) In General.--
              ``(1) Differential rates of payment.--Notwithstanding any 
          other provision of law, the Secretary shall establish 
          procedures to provide differential rates of payment for items 
          and services covered under the program under this title that 
          favor treatment provided consistent with qualifying best 
          practices approved by a State in accordance with section 3(a) 
          of the Improved Medical Decision Incentive Act of 2007.
              ``(2) Regulations.--Not later than March 31, 2008, the 
          Secretary shall promulgate regulations to carry out this 
          subsection.
              ``(3) Budget neutrality.--The Secretary shall ensure that 
          the procedures established under paragraph (1) do not result in 
          overall expenditures for any year under this title that are 
          more than the expenditures which would have been made if such 
          procedures had not been established, taking into account--
                      ``(A) any savings anticipated as a result of the 
                  application of best practices to items and services 
                  covered under the program under this title; and
                      ``(B) the net effects of reimbursement increases 
                  and decreases as a result of the differential in rates 
                  of payment established under such program.
      ``(b) Adoption of National Best Practices.--
              ``(1) In general.--Such procedures shall specify that, in 
          any case where the Secretary finds a national standard for best 
          practices to be appropriate, the Secretary may adopt national 
          best practices. Subject to paragraph (2), such national best 
          practices shall be applicable within a State as a qualifying 
          best practice in accordance with section 3(a) of the Improved 
          Medical Decision Incentive Act of 2007 and the basis for the 
          establishment of differential rates of payment under the 
          program under this title.
              ``(2) Limitation.--In any case where the State health 
          department has approved qualifying best practices in the State 
          for a condition, illness, or procedure in accordance with such 
          section 3(a), national best practices adopted under paragraph 
          (1) shall only be applicable within such State as a qualifying 
          best practice and the basis for the establishment of such 
          differential rates of payment if the Secretary finds, after a 
          hearing in the State that meets the procedural requirements 
          under paragraph (2) of such section 3(a), that the national 
          best practices will improve health care outcomes and lower 
          health care costs in the State to a greater extent than the 
          qualifying best practices approved by the State health 
          department for that condition, illness, or procedure in 
          accordance with such section 3(a).''.
      (b) Effective Date.--The amendment made by this section shall apply 
  to items and services furnished on or after March 31, 2008.
  
  SEC. 5. IMPLEMENTATION OF DIFFERENTIAL RATES OF PAYMENT FOR QUALIFYING 
                BEST PRACTICES UNDER THE MEDICAID PROGRAM.
  
      (a) State Plan Amendment.--Section 1902(a) of the Social Security 
  Act (42 U.S.C. 1396a(a)) is amended--
              (1) in paragraph (69), by striking ``and'' at the end;
              (2) in paragraph (70)(B)(iv), by striking the period at the 
          end and inserting ``; and''; and
              (3) by inserting after paragraph (70)(B)(iv) the following 
          new paragraph:
              ``(71) provide, in accordance with procedures established 
          by the Secretary under subsection (dd) and after consultation 
          with and upon the recommendation of the State health department 
          (and the approval of the Secretary), for differential rates of 
          payment for medical assistance under the plan that favor 
          treatment provided consistent with qualifying best practices 
          approved by the State health department in accordance with 
          section 3(a) of the Improved Medical Decision Incentive Act of 
          2007, except that in establishing such payment rates, the State 
          shall ensure that the amounts paid under such rates do not 
          exceed the amount the State would have paid for such medical 
          assistance under the plan if such differential rates of payment 
          had not been made, taking into account any annual increases in 
          population and inflation.''.
      (b) Establishment of Procedures.--Section 1902 of the Social 
  Security Act (42 U.S.C. 1396a) is amended by adding at the end the 
  following new subsection:
      ``(dd) Differential Rates of Payment for Qualifying Best Practices 
  and Adoption of National Best Practices.--
              ``(1) Differential rates of payment for qualifying best 
          practices.--
                      ``(A) In general.--Notwithstanding any other 
                  provision of law, the Secretary shall establish 
                  procedures to provide differential rates of payment for 
                  medical assistance provided consistent with qualifying 
                  best practices approved by a State in accordance with 
                  section 3(a) of the Improved Medical Decision Incentive 
                  Act of 2007.
                      ``(B) Regulations.--Not later than March 31, 2008, 
                  the Secretary shall promulgate regulations to carry out 
                  this subsection.
                      ``(C) Budget neutrality.--The Secretary shall 
                  ensure that the procedures established under 
                  subparagraph (A) do not result in overall expenditures 
                  for any year under a State plan that are more than the 
                  expenditures which would have been made if such 
                  procedures had not been established, taking into 
                  account--
                              ``(i) any savings anticipated as a result 
                          of the application of best practices to medical 
                          assistance provided under the State plan; and
                              ``(ii) the net effects of reimbursement 
                          increases and decreases as a result of the 
                          differential rates of payment established under 
                          such plan.
              ``(2) Adoption of national best practices.--Such procedures 
          shall specify that, in any case where the Secretary adopts 
          national best practices in accordance with section 1898(b), 
          subject to the limitation under paragraph (2) of such section, 
          such national best practices shall be--
                      ``(A) applicable within a State as a qualifying 
                  best practice in accordance with section 3(a) of the 
                  Improved Medical Decision Incentive Act of 2007; and
                      ``(B) the basis for the establishment of 
                  differential rates of payment under the State plan.''.
      (c) Effective Date.--
              (1) In general.--Except as provided in paragraph (2), the 
          amendments made by this section shall apply to medical 
          assistance furnished on or after March 31, 2008.
              (2) Extension of effective date for state law amendment.--
          In the case of a State plan under title XIX of the Social 
          Security Act (42 U.S.C. 1396 et seq.) which the Secretary of 
          Health and Human Services determines requires State legislation 
          in order for the plan to meet the additional requirements 
          imposed by the amendments made by this section, the State plan 
          shall not be regarded as failing to comply with the 
          requirements of such title solely on the basis of its failure 
          to meet these additional requirements before the first day of 
          the first calendar quarter beginning after the close of the 
          first regular session of the State legislature that begins 
          after the date of enactment of this Act. For purposes of the 
          previous sentence, in the case of a State that has a 2-year 
          legislative session, each year of the session is considered to 
          be a separate regular session of the State legislature.
  
  SEC. 6. OVERSIGHT BY THE CENTERS FOR MEDICARE & MEDICAID SERVICES.
  
      (a) Review and Report.--
              (1) Review.--
                      (A) In general.--The Secretary shall conduct an 
                  annual review of the efficacy of all qualifying best 
                  practices approved pursuant to section 3(a) and, if 
                  applicable, any national best practices adopted 
                  pursuant to section 1898(b) of the Social Security Act, 
                  as added by section 4(a).
                      (B) Considerations.--The review conducted under 
                  subparagraph (A) shall consider--
                              (i) the effect of such best practices with 
                          respect to improving outcomes and lowering the 
                          cost of care; and
                              (ii) the effect and efficacy of 
                          differential rates of payment under the 
                          Medicare and Medicaid programs under titles 
                          XVIII and XIX, respectively, of the Social 
                          Security Act (42 U.S.C. 1395 et seq.; 1396 et 
                          seq.) under procedures established pursuant to 
                          the amendments made by sections 4 and 5.
              (2) Report.--The Secretary shall submit an annual report to 
          Congress containing the results of the review conducted under 
          paragraph (1)(A), together with recommendations for such 
          legislation and administrative actions as the Secretary 
          determines appropriate.
      (b) Annual Conference.--The Secretary shall host an annual 
  conference of all State health directors, and any State medical 
  societies and medical specialty groups that have filed best practices 
  for approval with a State health department in accordance with 
  subparagraph (A) of section 3(a)(2) and any health insurers and 
  advocacy groups that have participated in any administrative proceeding 
  to approve best practices in accordance with subparagraphs (C) and (D), 
  respectively, of such section, to provide--
              (1) for the exchange of information; and
              (2) an opportunity to summarize the effects on health care 
          costs, quality, and outcomes of qualifying best practices 
          approved in accordance with section 3(a) prior to the date on 
          which the conference is held.
      (c) Authorization.--There are authorized to be appropriated such 
  sums as may be necessary for the purpose of carrying out this section.
      (d) Definition of Secretary.--In this section, the term 
  ``Secretary'' means the Secretary of Health and Human Services, acting 
  through the Administrator of the Centers for Medicare & Medicaid 
  Services.
target: Improved Medical Decision Incentive Act of 2007 - Allows a state health department to approve best practices in a course of, or as a means of treatment for, a particular condition, illness, or procedure, as the qualifying standard of care for the state in order to take advantage of the differential rates of payment implemented under the Social Security Act and the private insurance incentive under this Act.
  
  Requires a state health department, among other conditions for state approval, to allow any duly constituted state medical society or medical speciality group to file with the state health department a course or means of treatment representing best practices for a particular condition, illness, or procedure.
  
  Requires any interstate health insurer providing health care coverage within a state with approved qualifying best practices to pay all provider charges for any service provided in accordance with such practices.
  
  Authorizes any such provider or specialty group to bring a civil action in an appropriate U.S. district court to enjoin efforts by any health insurer to challenge or delay payment for services provided by the provider or a member of the specialty group in accordance with such best practices.
  
  Amends titles XVIII (Medicare) and XIX (Medicaid) to provide for implementation of differential rates of payment for covered items and services that favor treatment consistent with qualifying best practices under the Medicare and Medicaid programs.
  
  Requires the Secretary of Health and Human Services, acting through the Administrator of the Centers for Medicare & Medicaid Services, to review annually and report to Congress on the efficacy of all qualifying best practices approved pursuant to this Act and, if applicable, any national best practices adopted pursuant to this Act.
  
  Requires the Secretary also to host an annual conference on best practices for all state health directors, any state medical societies and medical specialty groups that have filed best practices for state approval, and any health insurers and advocacy groups that have participated in any administrative proceeding to approve best practices.
feat_title: A bill to provide for the voluntary development by States of qualifying best practices for health care and to encourage such voluntary development by amending titles XVIII and XIX of the Social Security Act to provide differential rates of payment favoring treatment provided consistent with qualifying best practices under the Medicare and Medicaid programs, and for other purposes.