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[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 5633 Introduced in Senate (IS)]

<DOC>

118th CONGRESS
  2d Session
                                S. 5633

    To establish Medicare flex fund accounts and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

            December 19 (legislative day, December 16), 2024

  Mr. Scott of Florida introduced the following bill; which was read 
             twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL

 
    To establish Medicare flex fund accounts and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Medicare Flex Fund Accounts and 
Flexible Benefits Act of 2024''.

SEC. 2. MEDICARE FLEX FUND ACCOUNTS.

    (a) In General.--Part VIII of subchapter F of chapter 1 of the 
Internal Revenue Code of 1986 is amended by adding at the end the 
following new section:

``SEC. 530A. MEDICARE FLEX FUND ACCOUNTS.

    ``(a) In General.--A Medicare flex fund account shall be exempt 
from taxation under this subtitle. Notwithstanding the preceding 
sentence, the Medicare flex fund account shall be subject to the taxes 
imposed by section 511 (relating to imposition of tax on unrelated 
business income of charitable organizations).
    ``(b) Medicare Flex Fund Account.--For purposes of this section:
            ``(1) In general.--The term `Medicare flex fund account' 
        means a trust created or organized in the United States as a 
        Medicare flex fund account exclusively for the purpose of 
        paying the qualified medical expenses of the account 
        beneficiary, but only if the written governing instrument 
        creating the trust meets the following requirements:
                    ``(A) Except in the case of a rollover contribution 
                described in subsection (c)(2), section 220(f)(5), or 
                section 223(f)(5) or a contribution described in 
                section 138A(1), no contribution will be accepted--
                            ``(i) unless it is in cash,
                            ``(ii) unless the account beneficiary is an 
                        eligible individual for the taxable year in 
                        which the contribution is made, and
                            ``(iii) to the extent such contribution, 
                        when added to previous contributions to the 
                        trust for the calendar year, exceeds the sum 
                        of--
                                    ``(I) the dollar amount in effect 
                                under section 223(b)(2)(A), plus
                                    ``(II) in the case of an individual 
                                who has attained age 55 before the 
                                close of the calendar year, the dollar 
                                amount in effect under section 
                                223(b)(3)(B).
                    ``(B) The trustee is a bank (as defined in section 
                408(n)), an insurance company (as defined in section 
                816), or another person who demonstrates to the 
                satisfaction of the Secretary that the manner in which 
                such person will administer the trust will be 
                consistent with the requirements of this section.
                    ``(C) No part of the trust assets will be invested 
                in life insurance contracts.
                    ``(D) The assets of the trust will not be 
                commingled with other property except in a common trust 
                fund or common investment fund.
                    ``(E) The interest of an individual in the balance 
                in his account is nonforfeitable.
            ``(2) Qualified medical expenses.--
                    ``(A) In general.--Except as otherwise provided in 
                this paragraph, the term `qualified medical expenses' 
                shall have the meaning given such term under section 
                223(d)(2) (determined without regard to subparagraph 
                (B) thereof).
                    ``(B) Exception for medigap premiums.--Such term 
                shall not include any premium for a medicare 
                supplemental policy under section 1882 of the Social 
                Security Act (42 U.S.C. 1395ss).
            ``(3) Eligible individual.--The term `eligible individual' 
        means, with respect to any taxable year, any individual 
        entitled to, or enrolled for, benefits under part A of title 
        XVIII of the Social Security Act or enrolled for benefits under 
        part B or D of such title, including individuals covered under 
        a Medicare Advantage plan, on the last day of such taxable 
        year.
            ``(4) Certain rules to apply.--Rules similar to the 
        following rules shall apply for purposes of this section:
                    ``(A) Section 219(f)(3) (relating to time when 
                contributions made).
                    ``(B) Section 408(g) (relating to community 
                property laws).
                    ``(C) Section 408(h) (relating to custodial 
                accounts).
                    ``(D) Paragraphs (2) and (4) of section 408(e).
    ``(c) Tax Treatment of Distributions.--
            ``(1) In general.--Any amount distributed out of a Medicare 
        flex fund account shall be subject to tax in the same extent 
        and in the same manner as distributions from a health savings 
        account under section 223(f), except that--
                    ``(A) amounts described in paragraph (2) thereof 
                shall be includible in gross income in the manner 
                provided under section 72 (after taking into account 
                rules similar to the rules of section 408(d)(2)),
                    ``(B) for purposes of paragraph (3)(B) thereof a 
                rollover contribution described in paragraph (2) shall 
                not be considered an excess contribution, and
                    ``(C) paragraph (4) thereof shall not apply.
            ``(2) Rollover contribution.--An amount is described in 
        this paragraph as a rollover contribution if it meets the 
        requirements of subparagraphs (A) and (B).
                    ``(A) In general.--An amount distributed from a 
                Medicare flex fund account shall not be includible in 
                gross income if such amount is paid or distributed from 
                a Medicare flex fund account to the account beneficiary 
                to the extent the amount received is paid into a 
                Medicare flex fund account for the benefit of such 
                beneficiary not later than the 60th day after the day 
                on which the beneficiary receives the payment or 
                distribution.
                    ``(B) Limitation.--This paragraph shall not apply 
                to any amount described in subparagraph (A) received by 
                an individual from a Medicare flex fund account if, at 
                any time during the 1-year period ending on the day of 
                such receipt, such individual received any other amount 
                described in subparagraph (A) from a Medicare flex fund 
                account which was not includible in the individual's 
                gross income because of the application of this 
                paragraph.
    ``(d) Reports.--The Secretary may require the trustee of a Medicare 
flex fund account to make such reports regarding such account to the 
Secretary and to the account beneficiary with respect to contributions, 
distributions, the return of excess contributions, and such other 
matters as the Secretary determines appropriate. The reports required 
by this subsection shall be filed at such time and in such manner and 
furnished to such individuals at such time and in such manner as may be 
required by the Secretary.''.
    (b) Government Contributions.--Part III of subchapter B of chapter 
1 of the Internal Revenue Code of 1986 is amended by inserting after 
section 138 the following new section:

``SEC. 138A. CERTAIN CONTRIBUTIONS TO MEDICARE FLEX FUND ACCOUNTS.

    ``Gross income shall not include any payment to the Medicare flex 
fund account (as defined in section 530A) of an individual by--
            ``(1) the Secretary of Health and Human Services, or
            ``(2) the administrator of a Medicare Advantage plan.''.
    (c) Contributions From Other Savings Vehicles.--
            (1) Health savings accounts.--Section 223(f)(5) of the 
        Internal Revenue Code of 1986 is amended by inserting ``or a 
        Medicare flex fund account (as defined in section 530A)'' after 
        ``paid into a health savings account''.
            (2) Archer msas.--Section 220(f)(5) of such Code is amended 
        by striking ``or a health savings account (as defined in 
        section 223(d))'' and inserting ``, a health savings account 
        (as defined in section 223(d)), or a Medicare flex fund account 
        (as defined in section 530A)''.
            (3) IRA distributions.--Section 408(d) of such Code is 
        amended by adding at the end the following new paragraph:
            ``(10) Distribution for medicare flex fund account 
        funding.--
                    ``(A) In general.--In the case of an individual who 
                is an eligible individual (as defined in section 
                530A(b)(3)) and who elects the application of this 
                paragraph for a taxable year, gross income of the 
                individual for the taxable year does not include a 
                qualified Medicare FFA funding distribution to the 
                extent such distribution is otherwise includible in 
                gross income.
                    ``(B) Qualified medicare ffa funding 
                distribution.--For purposes of this paragraph, the term 
                `qualified Medicare FFA funding distribution' means a 
                distribution from an individual retirement plan (other 
                than a plan described in subsection (k) or (p)) of the 
                employee to the extent that such distribution is 
                contributed to the Medicare flex fund account (as 
                defined in section 530A) of the individual in a direct 
                trustee-to-trustee transfer.
                    ``(C) Limitation.--
                            ``(i) In general.--The amount excluded from 
                        gross income by subparagraph (A) shall not 
                        exceed the annual limitation under section 
                        530A(b)(1)(A)(iii).
                            ``(ii) One-time transfer.--An individual 
                        may make an election under subparagraph (A) 
                        only for one qualified Medicare FFA funding 
                        distribution during the lifetime of the 
                        individual. Such an election, once made, shall 
                        be irrevocable.
                    ``(D) Application of section 72.--Rules similar to 
                the rules of paragraph (9)(E) shall apply for purposes 
                of this paragraph.''.
    (d) Excess Contributions.--
            (1) In general.--Section 4973(a) of such Code is amended by 
        striking ``or'' at the end of paragraph (5), by inserting 
        ``or'' at the end of paragraph (6), and by inserting after 
        paragraph (6) the following new paragraph:
            ``(7) a Medicare flex fund account (within the meaning of 
        section 530A),''.
            (2) Excess contributions.--Section 4973 of such Code is 
        amended by adding at the end the following new subsection:
    ``(i) Excess Contributions to Medicare Flex Fund Accounts.--
            ``(1) In general.--In the case of a Medicare flex fund 
        account, the term `excess contributions' means the sum of--
                    ``(A) the amount by which the amount contributed 
                for the taxable year to such accounts exceeds the 
                contribution limitation determined under section 
                530A(b)(1)(A)(iii), and
                    ``(B) the amount determined under this subsection 
                for the preceding taxable year, reduced by the sum of--
                            ``(i) the distributions out of the accounts 
                        for the taxable year which were not used 
                        exclusively to pay the qualified medical 
                        expenses (as determined under section 
                        223(f)(2)) of the account beneficiary,
                            ``(ii) the excess of--
                                    ``(I) the distributions out of the 
                                accounts for such taxable year which 
                                were used exclusively to pay the 
                                qualified medical expenses (as 
                                determined under section 223(f)(1)) of 
                                the account beneficiary, over
                                    ``(II) the amount which would be 
                                taxable by reason of section 
                                530A(c)(1)(A) if such amounts were 
                                described in section 223(f)(2) with 
                                respect to such distributions, and
                            ``(iii) the excess (if any) of the maximum 
                        amount which may be contributed to the accounts 
                        for the taxable year over the amount 
                        contributed to the accounts for the taxable 
                        year.
            ``(2) Special rules.--For purposes of paragraph (1), the 
        following contributions shall not be taken into account:
                    ``(A) Any contribution which is distributed out of 
                the Medicare flex fund account in a distribution if--
                            ``(i) such distribution is received by the 
                        individual on or before the last day prescribed 
                        by law (including extensions of time) for 
                        filing such individual's return for such 
                        taxable year, and
                            ``(ii) such distribution is accompanied by 
                        the amount of net income attributable to such 
                        excess contribution.
                    ``(B) Any rollover contribution described in 
                section 220(f)(5), 223(f)(5), or 530A(c)(2).''.
    (e) Application of Prohibited Transaction Rules.--
            (1) In general.--Section 4975(e)(1) of the Internal Revenue 
        Code of 1986 is amended by striking ``or'' at the end of 
        subparagraph (F), by redesignating subparagraph (G) as 
        subparagraph (H), and by inserting after subparagraph (F) the 
        following new subparagraph:
                    ``(G) a Medicare flex fund account described in 
                section 530A, or''.
            (2) Special rule.--Section 4975(c) of such Code is amended 
        by adding at the end the following new paragraph:
            ``(8) Special rule for medicare flex fund accounts.--An 
        individual for whose benefit a Medicare flex fund account 
        (within the meaning of section 530A) is established shall be 
        exempt from the tax imposed by this section with respect to any 
        transaction concerning such account (which would otherwise be 
        taxable under this section) if, with respect to such 
        transaction, the account ceases to be a Medicare flex fund 
        account by reason of the application of section 530A(b)(4)(D) 
        to such account.''.
    (f) Other Conforming Amendments.--
            (1) Section 35(g)(3) of the Internal Revenue Code of 1986 
        is amended by striking ``or from a health savings account (as 
        defined in section 223(d))'' and inserting ``, from a health 
        savings account (as defined in section 223(d)), or from a 
        Medicare flex fund account (as defined in section 530A(b))''.
            (2) Section 848(e)(1)(B) of such Code is amended by 
        striking ``and'' at the end of clause (iv), by striking the 
        period at the end of clause (v) and inserting ``, and'', and by 
        adding at the end the following new clause:
                            ``(vi) any contract which is a Medicare 
                        flex fund account (as defined in section 
                        530A(b)).''.
            (3) Section 877A(e)(2) of such Code is amended by inserting 
        ``a Medicare flex fund account (as defined in section 
        530A(b)),'' after ``a health savings account (as defined in 
        section 223)''.
            (4) Section 6693(a)(2) of such Code is amended by striking 
        ``and'' at the end of subparagraph (E), by striking the period 
        at the end of subparagraph (F) and inserting ``, and'', and by 
        inserting after subparagraph (G) the following new 
        subparagraph:
                    ``(G) section 530A(d) (relating to Medicare flex 
                fund accounts).''.
            (5) Section 1027(g)(4) of the Consumer Financial Protection 
        Act of 2010 (12 U.S.C. 5517(g)(4)) is amended by striking ``or 
        530'' and inserting ``530, or 530A''.
    (g) Clerical Amendments.--
            (1) The table of sections for part VIII of subchapter F of 
        chapter 1 of such Code is amended by adding at the end the 
        following new item:

``Sec. 530A. Medicare flex fund accounts.''.
            (2) The table of sections for part III of subchapter B of 
        chapter 1 of such Code is amended by inserting after the item 
        relating to section 138 the following new item:

``Sec. 138A. Certain contributions to Medicare flex fund accounts.''.
    (h) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning on or after January 1, 2026.

SEC. 3. MEDICARE FLEX FUND ACCOUNTS UNDER MEDICARE ADVANTAGE.

    (a) Requirement for Medicare Flex Fund Accounts.--
            (1) MA plan requirement to establish medicare flex fund 
        account on behalf of an enrollee.--Section 1851 of the Social 
        Security Act (42 U.S.C. 1395w-21) is amended by adding at the 
        end the following new subsection:
    ``(k) MA Plan Requirement to Establish Medicare FFA on Behalf of an 
Enrollee.--
            ``(1) In general.--Notwithstanding any other provision of 
        law and subject to paragraph (4), any MA plan offered under 
        this part (other than an MSA plan) shall establish a Medicare 
        flex fund account (as defined in section 530A of the Internal 
        Revenue Code of 1986 and referred to in this subsection as a 
        `Medicare FFA') on behalf of an enrollee in the plan.
            ``(2) Rebates.--In the case of a plan that is required to 
        provide a monthly rebate to an enrollee under section 
        1854(b)(1)(C), the MA plan may provide part or all of such 
        rebate through depositing money into the enrollee's Medicare 
        FFA.
            ``(3) Incentive payments.--
                    ``(A) In general.--Notwithstanding section 
                1851(h)(4)(A) or any other provision of this part and 
                subject to subparagraph (B), MA plans may deposit money 
                into an enrollee's Medicare FFA as a result of the 
                enrollee completing educational or training programs, 
                programs for chronic disease management, programs that 
                promote wellness and health, or other programs as 
                determined by the Secretary.
                    ``(B) Rules.--In making the deposits described in 
                subparagraph (A), the following rules shall apply:
                            ``(i) No payment shall be made to an MA 
                        organization under this part as a result of 
                        such deposits.
                            ``(ii) In submitting bid information 
                        required under section 1854, the MA 
                        organization offering the MA plan shall not 
                        take into account such deposits.
                            ``(iii) The MA plan may not charge a 
                        premium or otherwise increase a premium under 
                        section 1854 as a result of such deposits.
            ``(4) Initial payment floor.--
                    ``(A) In general.--Subject to subparagraph (B), for 
                the first 3 years a Medicare FFA is established 
                pursuant to paragraph (1) with respect to an enrollee, 
                each MA plan shall deposit no less than $400 each year 
                into the enrollee's Medicare FFA.
                    ``(B) Rebates and incentive payments.--The rebates 
                described in paragraph (2) and incentive payments 
                described in paragraph (3) shall count towards the 
                required minimum deposit amount described in 
                subparagraph (A).
            ``(5) Prohibition on spending medicare ffas on medigap 
        premiums.--An enrollee may not spend any amount in a Medicare 
        FFA on a premium for a medicare supplemental policy under 
        section 1882.
            ``(6) Waiver of medicare ffa requirement for certain 
        plans.--
                    ``(A) In general.--The Secretary may waive the 
                requirement described in paragraph (1) for--
                            ``(i) a specialized MA plan for special 
                        needs individuals;
                            ``(ii) an employer sponsored MA plan 
                        described in section 1857(i)(2); and
                            ``(iii) an MA plan in which an enrollee in 
                        such plan already has a Medicare FFA if the 
                        study required by section 3(b) of the Medicare 
                        Flex Fund Accounts and Flexible Benefits Act of 
                        2024 concludes that it is feasible to permit 
                        Medicare beneficiaries enrolled in an MA plan 
                        to select their preferred Medicare FFA band 
                        under the plan.
                    ``(B) Enrollee choice.--Notwithstanding 
                subparagraph (A), an MA plan described in such 
                subparagraph shall establish a Medicare FFA if an 
                enrollee in such plan elects to have a Medicare FFA 
                established on behalf of the enrollee.
            ``(7) Education.--The Secretary shall include information 
        regarding Medicare FFAs in relevant education materials, 
        including--
                    ``(A) the notice required under section 1804(a) 
                (commonly referred to as the Medicare & You handbook);
                    ``(B) any site-of-service transparency information 
                made available to the public under section 1834(t);
                    ``(C) any information provided to individuals 
                regarding coverage options under section 1851(d); and
                    ``(D) in consultation with the Secretary of the 
                Treasury, additional general beneficiary educational 
                material regarding this title and this part.''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply to plan years beginning on or after January 1, 
        2026.
    (b) HHS Study and Report on Beneficiaries Choosing Their Preferred 
Bank for Medicare FFAs.--
            (1) Study.--The Secretary of Health and Human Services (in 
        this subsection referred to as the ``Secretary'') shall conduct 
        a study on the feasibility of permitting Medicare beneficiaries 
        enrolled in a Medicare Advantage plan under part C of title 
        XVIII of the Social Security Act (42 U.S.C. 1395w-21 et seq.) 
        to select their preferred Medicare flex fund account (as 
        described in section 1851(k) of such Act (42 U.S.C. 1395w-
        21(k))) bank under the plan. Such study shall include an 
        analysis of any administrative actions that the Secretary may 
        take in order to permit such beneficiaries to make such 
        selection.
            (2) Report.--Not later than 1 year after the date of 
        enactment of this Act, the Secretary shall submit to Congress a 
        report on the study conducted under paragraph (1), together 
        with--
                    (A) a description of any administrative actions 
                described in paragraph (1) that the Secretary has 
                taken, or plans to take; and
                    (B) recommendations for such legislation as the 
                Secretary determines appropriate.
    (c) HHS Study and Report on Beneficiaries Choosing Their Preferred 
Supplemental Health Benefits.--
            (1) Study.--The Secretary of Health and Human Services (in 
        this subsection referred to as the ``Secretary''), shall 
        conduct a study on the feasibility of permitting Medicare 
        beneficiaries enrolled in a Medicare Advantage plan under part 
        C of title XVIII of the Social Security Act (42 U.S.C. 1395w-21 
        et seq.) to select their preferred supplemental health benefits 
        under such plan and have the savings from unused benefits 
        deposited into the Medicare flex fund account (as described in 
        section 1851(k) of such Act (42 U.S.C. 1395w-21(k))) of the 
        enrollee. Such study shall include an analysis of any 
        administrative actions that the Secretary may take in order to 
        permit such beneficiaries to make such selection.
            (2) Consultation.--In carrying out the study under 
        paragraph (1), the Secretary shall conduct public meetings and 
        consult with Medicare Advantage plans, actuaries, and health 
        think tanks.
            (3) Report.--Not later than 1 year after the date of 
        enactment of this Act, the Secretary shall submit to Congress a 
        report on the study conducted under paragraph (1), together 
        with--
                    (A) a description of any administrative actions 
                described in paragraph (1) that the Secretary has 
                taken, or plans to take; and
                    (B) recommendations for such legislation as the 
                Secretary determines appropriate.

SEC. 4. MEDICARE FLEX FUND ACCOUNTS UNDER OTHER MEDICARE PROGRAMS.

    (a) CMI Model.--Section 1115A(b)(2)(B) of the Social Security Act 
(42 U.S.C. 1315a(b)(2)(B)) is amended by adding at the end the 
following new clause:
                            ``(xxviii) Permitting individuals 
                        participating in a model conducted under this 
                        section to have a Medicare flex fund account 
                        created by section 530A of the Internal Revenue 
                        Code of 1986.''.
    (b) Incentive Programs.--The Secretary of Health and Human Services 
may include a Medicare flex fund account created by section 530A of the 
Internal Revenue Code of 1986 as a component in any Medicare shared 
savings program or other Medicare incentive based program established 
after the date of enactment of this section.

SEC. 5. SITE OF SERVICE PRICE TRANSPARENCY UPDATE.

    (a) Price Transparency Website Update.--Section 1834(t)(1) of the 
Social Security Act (42 U.S.C. 1395m(t)(1)) is amended--
            (1) in subparagraph (A), by striking ``and'' at the end;
            (2) in subparagraph (B), by striking the period at the end 
        and inserting a semicolon; and
            (3) by adding at the end the following:
                    ``(C) the hospital outpatient departments and 
                ambulatory surgical centers nearest to a specific zip 
                code entered on the website;
                    ``(D) whether payments for items and services 
                furnished will be made under the payment system under 
                section 1833(t) or under section 1833(i); and
                    ``(E) if available, the quality rating of each 
                hospital outpatient department and surgical center.''.
    (b) Price Transparency Website Advisory Group.--
            (1) Establishment.--Not later than 90 days after the date 
        of enactment of this Act, the Administrator of the Centers for 
        Medicare & Medicaid Services (referred to in this subsection as 
        the ``Administrator'') shall establish a Medicare Price 
        Transparency Website Advisory Group (referred to in the 
        subsection as the ``Advisory Group'').
            (2) Members.--The Advisory Group shall be composed of the 
        following individuals or the designees of those individuals:
                    (A) The Administrator.
                    (B) The Chair of the Medicare Payment Advisory 
                Commission.
                    (C) Two representatives from each of the following 
                sectors to be selected by the Administrator:
                            (i) Medical.
                            (ii) Technology.
                            (iii) Think tanks with a background in 
                        health economics.
                    (D) Four individuals from non-profit organizations 
                that represent seniors.
                    (E) Any other individual the Administrator 
                determines appropriate.
            (3) No compensation for members.--A member of the Advisory 
        Group shall serve without compensation in addition to any 
        compensation received for the service of the member as an 
        officer or employee of the United States, if applicable.
            (4) Duties.--
                    (A) In general.--The Advisory Group shall review 
                the website described in section 1834(t) of the Social 
                Security Act (42 U.S.C. 1395(t)) (referred to in this 
                subsection as the ``website'') and provide 
                recommendations to the Secretary of Health and Human 
                Services (referred to in the subsection as the 
                ``Secretary'') on ways the website could be changed to 
                increase its usability and allow users of the website 
                to better understand the cost and quality for services 
                offered by hospital outpatient departments and 
                ambulatory surgical centers covered by the Medicare 
                program under title XVIII of such Act (42 U.S.C. 1395 
                et seq.) in order for users of the website to be better 
                informed regarding their medical choices.
                    (B) Report.--Not later than 180 days after the 
                first meeting of the Advisory Group, the Advisory Group 
                shall submit a report to the Secretary detailing its 
                recommendations.
            (5) Website update.--Not later than 1 year after receiving 
        the report required by paragraph (4)(B), the Secretary shall 
        update the website considering the recommendations contained in 
        such report.

SEC. 6. VOLUNTARY PATIENT DRIVEN BENEFIT FLEXIBILITY.

    (a) Direct Primary Care Payment Advisory Group.--
            (1) Establishment.--Not later than 90 days after the date 
        of enactment of this Act, the Administrator of the Centers for 
        Medicare & Medicaid Services (referred to in this subsection as 
        the ``Administrator'') shall establish a Direct Primary Care 
        Payment Advisory Group (referred to in the subsection as the 
        ``Advisory Group'').
            (2) Members.--The Advisory Group shall be composed of the 
        following individuals or the designees of those individuals:
                    (A) The Administrator.
                    (B) The Chair of the Medicare Payment Advisory 
                Commission.
                    (C) Two primary care physicians with experience in 
                direct primary care.
                    (D) Two specialist physicians who provide primary 
                care services to patients with chronic diseases with 
                experience in direct primary care.
                    (E) Two representatives of Medicare Advantage 
                plans.
                    (F) Two health actuaries.
                    (G) Two representatives of think tanks with a 
                health policy background.
                    (H) Any other individual the Administrator 
                determines appropriate.
            (3) No compensation for members.--A member of the Advisory 
        Group shall serve without compensation in addition to any 
        compensation received for the service of the member as an 
        officer or employee of the United States, if applicable.
            (4) Duties.--
                    (A) In general.--The Advisory Group shall 
                determine--
                            (i) a definition of primary care benefits 
                        provided under Medicare Advantage plans; and
                            (ii) how best to calculate the amount 
                        Medicare Advantage plans would save if 
                        patients, including patients that have chronic 
                        conditions and for whom primary care is 
                        provided by a specialist physician, were to 
                        contract with providers of primary care on 
                        their own without using health insurance.
                    (B) Report.--Not later than 180 days after the 
                first meeting of the Advisory Group, the Advisory Group 
                shall submit a report to the Secretary of Health and 
                Humans Services detailing its recommendations.
    (b) MA Plans.--Section 1852(a)(1) of the Social Security Act (42 
U.S.C. 1395w-22(a)(1)) is amended--
            (1) in subparagraph (A), by inserting ``and the patient 
        flexibility and bundled payment requirements described in 
        subparagraph (C)'' after ``under section 1854(f)(1)(A))''; and
            (2) by adding at the end the following new subparagraph:
                    ``(C) Direct primary care and flexibility 
                payments.--
                            ``(i) Direct primary care payments.--
                                    ``(I) In general.--Beginning with 
                                plan years beginning on or after 
                                January 1, 2027, each Medicare 
                                Advantage plan shall allow enrollees to 
                                elect to receive a direct primary care 
                                benefit payment, described in subclause 
                                (II), in lieu of receiving coverage of 
                                primary care benefits (as defined by 
                                the Secretary taking into account the 
                                recommendations of the Direct Primary 
                                Care Payment Advisory Group established 
                                under section 6(a) of the Medicare Flex 
                                Fund Accounts and Flexible Benefits Act 
                                of 2024) under the Medicare Advantage 
                                plan.
                                    ``(II) Direct primary care benefit 
                                payment.--The direct primary care 
                                benefit payment for an enrollee shall 
                                be--
                                            ``(aa) equal to the amount 
                                        of the average per capita 
                                        savings to the Medicare 
                                        Advantage plan by not providing 
                                        coverage of primary care 
                                        benefits under such plan to 
                                        such enrollee (as determined by 
                                        the Secretary taking into 
                                        account the recommendations of 
                                        the Direct Primary Care Payment 
                                        Advisory Group established 
                                        under section 6(a) of the 
                                        Medicare Flex Fund Accounts and 
                                        Flexible Benefits Act of 2024); 
                                        and
                                            ``(bb) deposited into the 
                                        Medicare flex fund account (as 
                                        defined in section 530A of the 
                                        Internal Revenue Code of 1986 
                                        and referred to in this 
                                        subparagraph as a `Medicare 
                                        FFA') of such enrollee.
                                    ``(III) Election.--
                                            ``(aa) In general.--Subject 
                                        to item (bb), during the period 
                                        beginning on January 1 and 
                                        ending on March 31 of each plan 
                                        year, an enrollee may elect to 
                                        receive the direct primary care 
                                        benefit payment for that year.
                                            ``(bb) Other 
                                        requirements.--

                                                    ``(AA) Frequency of 
                                                change.--If an enrollee 
                                                makes the election 
                                                described in item (aa), 
                                                the enrollee may elect 
                                                to stop receiving the 
                                                direct primary care 
                                                benefit payment and 
                                                begin to receive 
                                                primary care benefits 
                                                under the Medicare 
                                                Advantage plan for the 
                                                remainder of that 
                                                calendar year.

                                                    ``(BB) Carry over 
                                                of election.--If an 
                                                enrollee makes the 
                                                election described in 
                                                item (aa), the enrollee 
                                                shall continue to 
                                                receive the direct 
                                                primary care benefit 
                                                payment until the 
                                                enrollee elects to 
                                                receive primary care 
                                                benefits under the 
                                                Medicare Advantage plan 
                                                for the year during the 
                                                period described in 
                                                such item, the enrollee 
                                                makes the election 
                                                described in subitem 
                                                (AA), or the enrollee 
                                                changes Medicare 
                                                Advantage plans.

                                                    ``(CC) Changing of 
                                                medicare advantage 
                                                plans.--If an enrollee 
                                                changes Medicare 
                                                Advantage plans as 
                                                described in subitem 
                                                (BB), the enrollee may 
                                                elect to receive the 
                                                direct primary care 
                                                benefit payment or to 
                                                receive primary care 
                                                benefits under the 
                                                Medicare Advantage plan 
                                                for the remainder of 
                                                the year.

                            ``(ii) Flexibility payments for shoppable 
                        services.--
                                    ``(I) In general.--Beginning with 
                                plan years beginning on or after 
                                January 1, 2027, each Medicare 
                                Advantage plan shall allow enrollees to 
                                receive a payment from such plan that 
                                meets the requirements of subclause 
                                (II) and allows enrollees to receive 
                                treatment from a pre-approved alternate 
                                provider.
                                    ``(II) Payment.--The payment 
                                described in subclause (I) shall--
                                            ``(aa) be the same amount 
                                        that would have been paid to an 
                                        in-network provider and include 
                                        any processing costs; and
                                            ``(bb) be deposited in the 
                                        Medicare FFA of the enrollee 
                                        once a contract has been signed 
                                        by the enrollee, the Medicare 
                                        Advantage plan, and the 
                                        alternative provider to provide 
                                        treatment to the member.
                                    ``(III) Alternative providers.--
                                            ``(aa) Menu of options.--
                                        Each Medicare Advantage plan 
                                        may develop a list of pre-
                                        approved alternate providers 
                                        and information regarding the 
                                        price, treatment outcomes, and 
                                        customer experience of each 
                                        pre-approved alternate provider 
                                        for certain treatments, 
                                        procedures, and episodes of 
                                        care. If a Medicare Advantage 
                                        plan chooses to develop such 
                                        list, the Medicare Advantage 
                                        plan shall provide such list to 
                                        an enrollee upon the request of 
                                        such enrollee.
                                            ``(bb) Providing the menu 
                                        to the enrollee.--Each Medicare 
                                        Advantage plan shall provide 
                                        the list described in item (aa) 
                                        before the enrollee requests 
                                        such list if it could result in 
                                        the enrollee receiving 
                                        treatment for a lesser price.
                                            ``(cc) No cost for being on 
                                        alternative treatment location 
                                        list.--No Medicare Advantage 
                                        plan shall charge a provider 
                                        for being on a list described 
                                        in item (aa).
                                    ``(IV) Definition of pre-approved 
                                alternate provider.--For the purposes 
                                of this clause, the term `pre-approved 
                                alternate provider' means a provider of 
                                services or a supplier--
                                            ``(aa) located in the 
                                        United States or a territory of 
                                        the United States;
                                            ``(bb) licensed by the 
                                        State or territory in which the 
                                        provider furnishes services;
                                            ``(cc) willing to provide 
                                        services on a cash basis; and
                                            ``(dd) that has received 
                                        the review described in 
                                        subclause (V).
                                    ``(V) Review of services.--Before 
                                an enrollee has received treatment by a 
                                pre-approved alternative provider, the 
                                Medicare Advantage plan shall review 
                                any contracts or documents relating to 
                                the treatment provided by such provider 
                                to ensure that--
                                            ``(aa) any enrollee who 
                                        elects to receive treatment by 
                                        the provider will receive 
                                        appropriate health quality and 
                                        the desired treatment outcome; 
                                        and
                                            ``(bb) to protect the 
                                        enrollee from hidden fees or 
                                        surprise bills, the cost of the 
                                        service quoted by the pre-
                                        approved alternative provider 
                                        will be the total price paid by 
                                        the enrollee.
                            ``(iii) Rule of construction.--Nothing in 
                        this subparagraph shall be construed to limit 
                        any responsibility of a Medicare Advantage plan 
                        under this part, to reduce the actuarial value 
                        of such a plan, or to change any network 
                        adequacy requirement.''.
    (c) Prescription Drug Coverage.--Section 1860D-4 of the Social 
Security Act (42 U.S.C. 1395w-104) is amended by adding at the end the 
following new subsection:
    ``(p) Pharmaceutical Savings.--
            ``(1) In general.--In the case of a covered part D drug on 
        the formulary of a prescription drug plan or an MA-PD plan, the 
        plan shall, if requested by an enrollee of such plan, provide 
        such enrollee with a payment described in paragraph (2) in lieu 
        of the plan paying for such covered part D drug under the plan.
            ``(2) Payment.--The payment described in paragraph (1) 
        shall be an amount equal to the amount the prescription drug 
        plan or MA-PD plan would reimburse a preferred pharmacy for 
        such covered part D drug plus any fees that would be paid to 
        such plan (or a subsidiary of such plan) by the manufacturer of 
        such covered part D drug.''.
    (d) Rule for Patient Driven Benefit Flexibility Spending Regarding 
Deductibles and Out-of-Pocket Spending.--Section 1859 of the Social 
Security Act (42 U.S.C. 1395w-28) is amended by adding at the end the 
following new subsection:
    ``(j) Rule for Patient Driven Benefit Flexibility Spending 
Regarding Deductibles and Out-of-Pocket Spending.--Any amount spent by 
an enrollee from payments made by an MA plan under section 
1852(a)(1)(C) or 1860D-4(p) shall not count towards any deductible or 
maximum limitation on out-of-pocket expenses applicable to such MA 
plan.''.
                                 <all>
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