SEC. 1167. IMPROVING RISK ADJUSTMENT FOR PAYMENTS.

[a] Report to Congress- Not later than 1 year after the date of the enactment of this Act, the Secretary of Health and Human Services shall submit to Congress a report that evaluates the adequacy of the risk adjustment system under section 1853[a][1][C] of the Social Security Act [42 U.S.C. 1395-23[a][1][C]] in predicting costs for beneficiaries with chronic or co-morbid conditions, beneficiaries dually-eligible for Medicare and Medicaid, and non-Medicaid eligible low-income beneficiaries; and the need and feasibility of including further gradations of diseases or conditions and multiple years of beneficiary data.

[b] Improvements to Risk Adjustment- Not later than January 1, 2012, the Secretary shall implement necessary improvements to the risk adjustment system under section 1853[a][1][C] of the Social Security Act [42 U.S.C. 1395-23[a][1][C]], taking into account the evaluation under subsection [a].