124 STAT. 374 PUBLIC LAW 111–148—MAR. 23, 2010 (2) by adding at the end the following new subsection: ‘‘(p) ESTABLISHMENT OF VALUE-BASED PAYMENT MODIFIER.— ‘‘(1) IN GENERAL.—The Secretary shall establish a payment modifier that provides for differential payment to a physician or a group of physicians under the fee schedule established under subsection (b) based upon the quality of care furnished compared to cost (as determined under paragraphs (2) and (3), respectively) during a performance period. Such payment modifier shall be separate from the geographic adjustment fac- tors established under subsection (e). ‘‘(2) QUALITY.— ‘‘(A) IN GENERAL.—For purposes of paragraph (1), quality of care shall be evaluated, to the extent practicable, based on a composite of measures of the quality of care furnished (as established by the Secretary under subpara- graph (B)). ‘‘(B) MEASURES.— ‘‘(i) The Secretary shall establish appropriate measures of the quality of care furnished by a physi- cian or group of physicians to individuals enrolled under this part, such as measures that reflect health outcomes. Such measures shall be risk adjusted as determined appropriate by the Secretary. ‘‘(ii) The Secretary shall seek endorsement of the measures established under this subparagraph by the entity with a contract under section 1890(a). ‘‘(3) COSTS.—For purposes of paragraph (1), costs shall be evaluated, to the extent practicable, based on a composite of appropriate measures of costs established by the Secretary (such as the composite measure under the methodology estab- lished under subsection (n)(9)(C)(iii)) that eliminate the effect of geographic adjustments in payment rates (as described in subsection (e)), and take into account risk factors (such as socioeconomic and demographic characteristics, ethnicity, and health status of individuals (such as to recognize that less healthy individuals may require more intensive interventions) and other factors determined appropriate by the Secretary. ‘‘(4) IMPLEMENTATION.— ‘‘(A) PUBLICATION OF MEASURES, DATES OF IMPLEMENTA- TION, PERFORMANCE PERIOD.—Not later than January 1, 2012, the Secretary shall publish the following: ‘‘(i) The measures of quality of care and costs estab- lished under paragraphs (2) and (3), respectively. ‘‘(ii) The dates for implementation of the payment modifier (as determined under subparagraph (B)). ‘‘(iii) The initial performance period (as specified under subparagraph (B)(ii)). ‘‘(B) DEADLINES FOR IMPLEMENTATION.— ‘‘(i) INITIAL IMPLEMENTATION.—Subject to the pre- ceding provisions of this subparagraph, the Secretary shall begin implementing the payment modifier estab- lished under this subsection through the rulemaking process during 2013 for the physician fee schedule established under subsection (b). ‘‘(ii) INITIAL PERFORMANCE PERIOD.— ‘‘(I) IN GENERAL.—The Secretary shall specify an initial performance period for application of Deadline.
