Improved Health Care at Lower Cost Act of 2013

Summary: Improved Health Care at Lower Cost Act of 2013 - Amends title XVIII (Medicare) and XI of the Social Security Act with respect to the prohibition against certain (potential financial conflict-of-interest) physician referrals. Excepts from the physician self-referral prohibition any monetary incentive payments made by hospitals to physicians under certain incentive payment programs designed to align incentives among hospitals and physicians (through techniques such as product standardization, the substitution of lower cost products, and care coordination initiatives that encourage medically appropriate decreases in length of stay) to improve efficiency and decrease costs while maintaining or improving quality. Exempts such monetary incentive payments (creates a safe harbor for them) from federal criminal antikickback and other sanctions.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Improved Health Care at Lower Cost 
Act of 2013''.

SEC. 2. EXCEPTION AND SAFE HARBOR FROM FEDERAL SANCTIONS FOR INCENTIVE 
              PAYMENTS FROM HOSPITALS TO PHYSICIANS UNDER CERTAIN 
              INCENTIVE PAYMENT PROGRAMS.

    (a) Findings.--Congress finds the following:
            (1) The Department of Health and Human Services has been 
        engaged in approving, on a project-by-project basis, gain-
        sharing arrangements under demonstration authority for nearly a 
        decade. Based on the knowledge gained from such demonstration 
        projects, the Department is capable of developing and applying 
        standards for permitting such arrangements more generally 
        without the use of such authority.
            (2) The Inspector General of the Department of Health and 
        Human Services has issued a special advisory bulletin in July 
        1999 that indicates that there is no general authority for 
        waiving sanctions for any gain-sharing arrangements between 
        physicians and hospitals.
            (3) Due to lack of capitalization, size limitations, risk 
        characteristics, and other factors, many hospitals and 
        physicians have been unable or unwilling to enter into gain-
        sharing types of arrangements that meet the requirements of the 
        shared savings program.
    (b) Purpose.--The purpose of this section is to establish general 
statutory authority within the Department of Health and Human Services 
to recognize gain-sharing and other incentive payment programs, other 
than the shared savings program, that align incentives among hospitals 
and physicians to improve efficiency and decrease costs while 
maintaining or improving quality care.
    (c) Exception From Physician Self-Referral Prohibition.--Section 
1877(e) of the Social Security Act (42 U.S.C. 1395nn(e)) is amended by 
adding at the end the following new paragraph:
            ``(9) Payments under certain incentive payment programs 
        between hospitals and physicians.--
                    ``(A) In general.--In the case of a monetary 
                incentive payment which is made by a hospital to a 
                physician under an incentive payment program (as 
                defined in subparagraph (B)) that meets requirements 
                established by the Secretary in consultation with the 
                Attorney General and the Inspector General of the 
                Department of Health and Human Services for purposes of 
                this paragraph.
                    ``(B) Incentive payment program defined.--In this 
                paragraph, the term `incentive payment program' means a 
                program that is designed to align incentives among 
                hospitals and physicians (through techniques such as 
                product standardization, the substitution of lower cost 
                products, and care coordination initiatives that 
                encourage medically appropriate decreases in length of 
                stay) to improve efficiency and decrease costs while 
                maintaining or improving quality.''.
    (d) Safe Harbor From Antikickback and Other Federal Sanctions.--
            (1) Section 1128B(b)(3) of the Social Security Act (42 
        U.S.C. 1320a-7b(b)(3)) is amended--
                    (A) by striking ``and'' at the end of subparagraph 
                (I);
                    (B) in subparagraph (J), by moving the indentation 
                2 ems to the left and by striking the period at the end 
                and inserting ``; and''; and
                    (C) by adding at the end the following new 
                subparagraph:
            ``(K) any monetary incentive payment which is made by a 
        hospital to a physician under an incentive payment program (as 
        defined in subparagraph (B) of section 1877(e)(9)) that meets 
        requirements established by the Inspector General of the 
        Department of Health and Human Services in consultation with 
        the Attorney General for purposes of applying this subparagraph 
        (which requirements needs not be the same as those established 
        under subparagraph (A) of such section).''.
            (2) Section 1128A(b)(1) of the Social Security Act (42 
        U.S.C. 1320a-7a(b)(1)) is amended by inserting ``(other than a 
        monetary incentive payment described in section 
        1128B(b)(3)(K))'' after ``makes a payment''.
    (e) Publication of Guidance.--The Secretary of Health and Human 
Services and the Inspector General of the Department of Health and 
Human Services--
            (1) not later than 6 months after the date of the enactment 
        of this Act, shall jointly publish a solicitation of comments 
        to carry out the amendments made by this section; and
            (2) not later than 12 months after such date of enactment, 
        shall publish, jointly or separately, such guidance or rules, 
        which may be effective on an interim, final basis, as may be 
        necessary to carry out such amendments in a timely manner.
    (f) Construction.--Nothing in this section (or the amendments made 
by this section) shall be construed as affecting the operation of the 
shared savings program.
    (g) Shared Savings Program Defined.--In this section, the term 
``shared savings program'' means such program under section 1899 of the 
Social Security Act (42 U.S.C. 1395jjj).