SEC. 1444. APPLICATION OF QUALITY MEASURES.

[a] Inpatient Hospital Services- Section- 1886[b][3][B] of such Act [42 U.S.C. 1395ww[b][3][B]] is amended by adding at the end the following new clause:

'[x][I] Subject to subclause [II], for purposes of reporting data on quality measures for inpatient hospital services furnished during fiscal year 2012 and each subsequent fiscal year, the quality measures specified under clause [viii] shall be measures selected by the Secretary from measures that have been endorsed by the entity with a contract with the Secretary under section 1890[a].

'[II] In the case of a specified area or medical topic determined appropriate by the Secretary for which a feasible and practical quality measure has not been endorsed by the entity with a contract under section 1890[a], the Secretary may specify a measure that is not so endorsed as long as due consideration is given to measures that have been endorsed or adopted by a consensus organization identified by the Secretary. The Secretary shall submit such a non-endorsed measure to the entity for consideration for endorsement. If the entity considers but does not endorse such a measure and if the Secretary does not phase-out use of such measure, the Secretary shall include the rationale for continued use of such a measure in rulemaking.'.

[b] Outpatient Hospital Services- Section- 1833[t][17] of such Act [42 U.S.C. 1395l[t][17]] is amended by adding at the end the following new subparagraph:

'[F] USE OF ENDORSED QUALITY MEASURES- The provisions of clause [x] of section 1886[b][3][C] shall apply to quality measures for covered OPD services under this paragraph in the same manner as such provisions apply to quality measures for inpatient hospital services.'.

[c] Physicians' Services- Section- 1848[k][2][C][ii] of such Act [42 U.S.C. 1395w-4[k][2][C][ii]] is amended by adding at the end the following: 'The Secretary shall submit such a non-endorsed measure to the entity for consideration for endorsement. If the entity considers but does not endorse such a measure and if the Secretary does not phase-out use of such measure, the Secretary shall include the rationale for continued use of such a measure in rulemaking.'.

[d] Renal Dialysis Services- Section- 1881[h][2][B][ii] of such Act [42 U.S.C. 1395rr[h][2][B][ii]] is amended by adding at the end the following: 'The Secretary shall submit such a non-endorsed measure to the entity for consideration for endorsement. If the entity considers but does not endorse such a measure and if the Secretary does not phase-out use of such measure, the Secretary shall include the rationale for continued use of such a measure in rulemaking.'.

[e] Endorsement of Standards- Section- 1890[b][2] of the Social Security Act [42 U.S.C. 1395aaa[b][2]] is amended by adding after and below subparagraph [B] the following:

'If the entity does not endorse a measure, such entity shall explain the reasons and provide suggestions about changes to such measure that might make it a potentially endorsable measure.'.

[f] Effective Date- Except as otherwise provided, the amendments made by this section shall apply to quality measures applied for payment years beginning with 2012 or fiscal year 2012, as the case may be.