SECTION 1. SHORT TITLE.

    This Act may be cited as the ``ACO Improvement Act of 2014''.

SEC. 2. MEDICARE ACO PROGRAM IMPROVEMENTS.

    (a) In General.--Section 1899 of the Social Security Act (42 U.S.C. 
1395jjj) is amended by adding at the end the following new subsection:
    ``(l) Improving Outcomes Through Greater Beneficiary Engagement.--
            ``(1) Use of beneficiary incentives.--Subject to approval 
        of the Secretary and in the case of an ACO that has elected a 
        two-sided risk model (as provided for under regulations), the 
        Secretary shall permit the ACO--
                    ``(A) to reduce or eliminate cost-sharing otherwise 
                applicable under part B for some or all primary care 
                services (as identified by the ACO) furnished by health 
                care professionals (including, as applicable, 
                professionals furnishing services through a rural 
                health clinic or Federally qualified health center) 
                within the network of the ACO; and
                    ``(B) to develop additional incentive programs to 
                encourage patient engagement and participation in their 
                own wellness.
        The cost of the such incentives shall be borne by the ACO and 
        shall not affect the payments under subsection (d).
            ``(2) Fostering stronger patient-provider ties.--
                    ``(A) Providing prospective assignment of 
                beneficiaries.--
                            ``(i) In general.--In carrying out 
                        subsection (c), the Secretary shall provide for 
                        a prospective assignment of Medicare fee-for-
                        service beneficiaries before the beginning of a 
                        year to an ACO and primary care ACO 
                        professional in accordance with the practice 
                        under this section for Pioneer ACOs, subject to 
                        clause (ii).
                            ``(ii) Changing primary care aco 
                        professionals.--An ACO shall permit a 
                        beneficiary to select the primary care ACO 
                        professional within the ACO to which the 
                        beneficiary is assigned.
                    ``(B) Inclusion of aco information in welcome to 
                medicare visit and annual wellness visits.--The 
                Secretary shall require a primary care ACO professional 
                to include, as part of the initial preventive physical 
                examination under section 1861(ww)(1) or personalized 
                prevention plan services under section 1861(hhh)(1) for 
                a Medicare fee-for-service beneficiary assigned to that 
                professional under this section, to provide the 
                beneficiary with information concerning the ACO program 
                under this section, including information on any cost-
                sharing reductions allowed under this section.
                    ``(C) Stakeholder advisory group.--The Secretary 
                shall form a stakeholder group, including 
                representatives of ACOs, health care providers 
                (including ACO professionals), Medicare beneficiaries, 
                and ACO experts, to advise the Secretary with 
                recommendations to improve the process of ACO-to-
                beneficiary communication.
            ``(3) Moving from volume to value.--
                    ``(A) Regulatory relief for moving to two-sided 
                risk.--In the case of an ACO that has elected a two-
                sided risk model (as described in paragraph (1)), in 
                addition to the authority provided under paragraph (1), 
                the Secretary shall provide the following regulatory 
                relief:
                            ``(i) 3-day prior hospitalization waiver 
                        for snf services.--Waiver of the 3-day prior 
                        hospitalization requirement for coverage of 
                        skilled nursing facility services.
                            ``(ii) Homebound requirement waiver for 
                        home health services.--Waiver of the homebound 
                        requirement for coverage of home health 
                        services.
                            ``(iii) RAC hospital audit relief.--Relief 
                        from reviews of scheduled admissions by 
                        recovery audit contractors for individuals 
                        attributed to an ACO when admitted on orders of 
                        a physician participating in the ACO.
                    ``(B) Improving care coordination through access to 
                telehealth.--
                            ``(i) Flexibility in furnishing telehealth 
                        services.--In applying section 1834(m) in the 
                        case of an ACO that has elected a two-sided 
                        risk model (as described in paragraph (1)), the 
                        ACO may elect to have the limitations on 
                        originating site (under paragraph (4)(C) of 
                        such section) and on the use of store-and-
                        forward technologies (under paragraph (1) of 
                        such section) not apply. The previous sentence 
                        shall not be construed as affecting the 
                        authority of the Secretary under subsection (f) 
                        to waive other provisions of such section.
                            ``(ii) Provision of remote monitoring in 
                        connection with home health services.--Nothing 
                        in this section shall be construed as 
                        preventing an ACO from including payments for 
                        remote patient monitoring and home-based video 
                        conferencing services in connection with the 
                        provision of home health services (under 
                        conditions for which payment for such services 
                        would not be made under section 1895 for such 
                        services) in a manner that is financially 
                        equivalent to the furnishing of a home health 
                        visit.
            ``(4) Establishing greater certainty for acos.--
                    ``(A) Benchmarks and payments.--The Secretary shall 
                conduct a demonstration project to test the use of 
                payment benchmarks that take into account geographic 
                area differences, such as differences in spending 
                trends within and across regions, and variations in 
                delivery and utilization based on the socioeconomic 
                status of beneficiaries served.
                    ``(B) Advance notification of acos of benchmarks 
                and past performance.--The Secretary shall inform ACOs, 
                in advance of each performance period, of the quality 
                benchmarks applicable to the ACO and period and of the 
                past performance (if any) of the ACO under this 
                section.
                    ``(C) Study and report on feasibility on providing 
                electronic access to medicare claims data.--The 
                Secretary shall conduct a study regarding the 
                feasibility of establishing a system of electronic 
                access of providers of services and suppliers to in-
                process and complete patient claims data. Such system 
                may be a modification of an existing data base, such as 
                the Virtual Research Data Center. The study shall take 
                into account the measures needed to ensure the security 
                and privacy of beneficiary and provider information. 
                Not later than one year after the date of the enactment 
                of this Act, the Secretary shall submit to Congress a 
                report on such study. The Secretary shall include in 
                such report such recommendations as the Secretary deems 
                appropriate.''.
    (b) Requiring Testing of Global Capitation Payment Model.--Section 
1899(i) of the Social Security Act (42 U.S.C. 1395jjj(i)) is amended--
            (1) in the heading, by striking ``Option to Use Other 
        Payment Models'' and inserting ``Alternative Payment Models'';
            (2) in paragraph (1), by inserting before the period at the 
        end the following: ``except that the Secretary shall, beginning 
        no later than January 1, 2016, establish one or more 
        demonstration programs to test the payment model described in 
        paragraph (3)(A)''; and
            (3) in paragraph (3)(A), by striking ``is any payment 
        model'' and inserting the following:
                    ``(i) a global capitation model in which an ACO is 
                at financial risk for all items and services covered 
                under parts A and B; and
                    ``(ii) any other payment model that the Secretary 
                determines will improve the quality and efficiency of 
                items and services furnished under this title.''.
    (c) Assignment Taking Into Account Services of Non-Physician 
Practitioners.--Section 1899(c) of the Social Security Act (42 U.S.C. 
1395jjj(c)) is amended by inserting ``(or, in the case of an ACO that 
is located in a rural or medically underserved area or that is 
affiliated with a Federally qualified health center or rural health 
clinic, an ACO professional described in subsection (h)(1)(B))'' after 
``subsection (h)(1)(A)''.
    (d) Creating Incentives for ACO Development.--The Secretary of 
Health and Human Services shall develop a mechanism to make permanent 
those ACO-related pilot programs, including the Advance Payment ACO 
Model, that have been successful. The Secretary shall submit to 
Congress a report on the study and shall include in the report such 
recommendations, including such changes in legislation, as the 
Secretary deems appropriate.
    (e) Effective Date.--The amendments made by subsection (a) shall 
apply to plan years beginning on or after January 1, 2016.
ACO Improvement Act of 2014 - Amends title XVIII (Medicare) of the Social Security Act with respect to the shared savings program under which groups of service providers and suppliers meeting specified criteria may work together to manage and coordinate care for Medicare fee-for-service beneficiaries through an accountable care organization (ACO). Directs the Secretary of Health and Human Services (HHS) to permit an ACO that has elected a two-sided risk model to: (1) reduce or eliminate cost-sharing under Medicare part B (Supplementary Medical Insurance) for some or all primary care services furnished by health care professionals within the ACO network; and (2) develop additional incentive programs to encourage patient engagement and participation in their own wellness. Prescribes requirements for fostering stronger patient-provider ties. &nbsp;Directs the Secretary to require a primary care ACO professional to provide the beneficiary with information concerning the ACO program as part of the initial preventive physical examination of the beneficiary. Directs the Secretary to form a stakeholder group including representatives of ACOs, health care providers, Medicare beneficiaries, and ACO experts.&nbsp; Requires such parties to advise the Secretary with recommendations to improve the process of ACO-to-beneficiary communication. Prescribes requirements for regulatory relief for an ACO that has elected a two-sided risk model and for improving care coordinatiion through access to telehealth.  Directs the Secretary to: (1) conduct a demonstration project to test the use of payment benchmarks that take into account geographic area differences, (2) study the feasibility of establishing a system of electronic access of service providers and suppliers to in-process and complete patient claims data, (3) establish one or more demonstration programs to test the global capitation payment model, and (4) develop a mechanism to make permanent those ACO-related pilot programs that have been successful.
ACO Improvement Act of 2014