SECTION 1. REMOTE MONITORING PILOT PROJECTS.

    (a) Pilot Projects.--
            (1) In general.--Not later than 9 months after the date of 
        enactment of this Act, the Secretary of Health and Human 
        Services (in this section referred to as the ``Secretary'') 
        shall conduct pilot projects under title XVIII of the Social 
        Security Act for the purpose of providing incentives to home 
        health agencies to utilize home monitoring and communications 
        technologies that--
                    (A) enhance health outcomes for medicare 
                beneficiaries; and
                    (B) reduce expenditures under such title.
            (2) Site requirements.--
                    (A) Urban and rural.--The Secretary shall conduct 
                the pilot projects under this section in both urban and 
                rural areas.
                    (B) Site in a small state.--The Secretary shall 
                conduct at least 1 of the pilot projects in a State 
                with a population of less than 1,000,000.
            (3) Definition of home health agency.--In this section, the 
        term ``home health agency'' has the meaning given that term in 
        section 1861(o) of the Social Security Act (42 U.S.C. 
        1395x(o)).
    (b) Medicare Beneficiaries Within the Scope of Projects.--The 
Secretary shall specify the criteria for identifying those medicare 
beneficiaries who shall be considered within the scope of the pilot 
projects under this section for purposes of the application of 
subsection (c) and for the assessment of the effectiveness of the home 
health agency in achieving the objectives of this section. Such 
criteria may provide for the inclusion in the projects of medicare 
beneficiaries who begin receiving home health services under title 
XVIII of the Social Security Act after the date of the implementation 
of the projects.
    (c) Incentives.--
            (1) Performance targets.--The Secretary shall establish for 
        each home health agency participating in a pilot project under 
        this section a performance target using one of the following 
        methodologies, as determined appropriate by the Secretary:
                    (A) Adjusted historical performance target.--The 
                Secretary shall establish for the agency--
                            (i) a base expenditure amount equal to the 
                        average total payments made to the agency under 
                        parts A and B of title XVIII of the Social 
                        Security Act for medicare beneficiaries 
                        determined to be within the scope of the pilot 
                        project in a base period determined by the 
                        Secretary; and
                            (ii) an annual per capita expenditure 
                        target for such beneficiaries, reflecting the 
                        base expenditure amount adjusted for risk and 
                        adjusted growth rates.
                    (B) Comparative performance target.--The Secretary 
                shall establish for the agency a comparative 
                performance target equal to the average total payments 
                under such parts A and B during the pilot project for 
                comparable individuals in the same geographic area that 
                are not determined to be within the scope of the pilot 
                project.
            (2) Incentive.--Subject to paragraph (3), the Secretary 
        shall pay to each participating home care agency an incentive 
        payment for each year under the pilot project equal to a 
        portion of the medicare savings realized for such year relative 
        to the performance target under paragraph (1).
            (3) Limitation on expenditures.--The Secretary shall limit 
        incentive payments under this section in order to ensure that 
        the aggregate expenditures under title XVIII of the Social 
        Security Act (including incentive payments under this 
        subsection) do not exceed the amount that the Secretary 
        estimates would have been expended if the pilot projects under 
        this section had not been implemented.
    (d) Waiver Authority.--The Secretary may waive such provisions of 
titles XI and XVIII of the Social Security Act as the Secretary 
determines to be appropriate for the conduct of the pilot projects 
under this section.
    (e) Report to Congress.--Not later than 5 years after the date that 
the first pilot project under this section is implemented, the 
Secretary shall submit to Congress a report on the pilot projects. Such 
report shall contain a detailed description of issues related to the 
expansion of the projects under subsection (f) and recommendations for 
such legislation and administrative actions as the Secretary considers 
appropriate.
    (f) Expansion.--If the Secretary determines that any of the pilot 
projects under this section enhance health outcomes for medicare 
beneficiaries and reduce expenditures under title XVIII of the Social 
Security Act, the Secretary may initiate comparable projects in 
additional areas.
    (g) Incentive Payments Have No Effect on Other Medicare Payments to 
Agencies.--An incentive payment under this section--
            (1) shall be in addition to the payments that a home health 
        agency would otherwise receive under title XVIII of the Social 
        Security Act for the provision of home health services; and
            (2) shall have no effect on the amount of such payments.
Directs the Secretary of Health and Human Services to conduct pilot projects under title XVIII (Medicare) of the Social Security Act for the purpose of providing incentives to home health agencies to utilize home monitoring and communications technology.
A bill to establish pilot projects under the medicare program to provide incentives for home health agencies to utilize home monitoring and communications technologies.