I 

115TH CONGRESS 

1ST SESSION H. R. 4580 

To amend title XVIII of the Social Security Act to improve the Medicare 

accountable care organization (ACO) program, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

DECEMBER 6, 2017 

Mr. WELCH (for himself and Mrs. BLACK) introduced the following bill; which 

was referred to the Committee on Ways and Means, and in addition to 

the Committee on Energy and Commerce, for a period to be subsequently 

determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To amend title XVIII of the Social Security Act to improve 

the Medicare accountable care organization (ACO) program, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘ACO Improvement Act 

5 of 2017’’. 

6 SEC. 2. MEDICARE ACO PROGRAM IMPROVEMENTS. 

7 (a) IMPROVING OUTCOMES THROUGH GREATER

8 BENEFICIARY ENGAGEMENT.— 


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1 (1) IN GENERAL.—Section 1899 of the Social 

2 Security Act (42 U.S.C. 1395jjj) is amended by add3 ing at the end the following new subsection: 

4 ‘‘(l) IMPROVING OUTCOMES THROUGH GREATER

5 BENEFICIARY ENGAGEMENT.— 

6 ‘‘(1) USE OF BENEFICIARY INCENTIVES.—Sub7 ject to approval of the Secretary, the Secretary shall 

8 permit an ACO— 

9 ‘‘(A) to reduce or eliminate cost-sharing 

10 otherwise applicable under part B for some or 

11 all primary care services (as identified by the 

12 ACO) furnished by health care professionals 

13 (including, as applicable, professionals fur14 nishing services through a rural health clinic or 

15 Federally qualified health center) within the 

16 network of the ACO; and 

17 ‘‘(B) to develop additional incentives to en18 courage patient engagement and participation 

19 in their own wellness. 

20 The cost of the incentives under this paragraph shall 

21 be borne by the ACO and shall not affect the pay22 ments to the ACO under subsection (d). 

23 ‘‘(2) FOSTERING STRONGER PATIENT-PROVIDER

24 TIES.— 


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1 ‘‘(A) PERMITTING PROSPECTIVE ASSIGN2 MENT OF BENEFICIARIES.—In carrying out 

3 subsection (c) with respect to any agreement 

4 with an ACO under this section, the ACO may 

5 elect under any such agreement prospective as6 signment of Medicare fee-for-service bene7 ficiaries before the beginning of a year to the 

8 ACO and a primary care ACO professional. 

9 ‘‘(B) INCLUSION OF ACO INFORMATION IN

10 WELCOME TO MEDICARE VISIT AND ANNUAL

11 WELLNESS VISITS.—The Secretary may encour12 age a primary care ACO professional to include, 

13 as part of the initial preventive physical exam14 ination under section 1861(ww)(1) or personal15 ized prevention plan services under section 

16 1861(hhh)(1) for a Medicare fee-for-service 

17 beneficiary assigned to that professional under 

18 this section, to provide the beneficiary with in19 formation concerning the ACO program under 

20 this section, including information on any cost21 sharing reductions allowed under this section. 

22 ‘‘(3) MOVING FROM VOLUME TO VALUE.—Sub23 ject to paragraph (4)— 

24 ‘‘(A) REGULATORY RELIEF FOR MOVING

25 TO TWO-SIDED RISK.—In the case of an ACO 


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1 that has elected a two-sided risk model (as pro2 vided for under regulations), in addition to the 

3 authority provided under paragraph (1), the 

4 Secretary shall provide the following regulatory 

5 relief: 

6 ‘‘(i) 3-DAY PRIOR HOSPITALIZATION

7 WAIVER FOR SNF SERVICES.—Waiver of 

8 the 3-day prior hospitalization requirement 

9 for coverage of skilled nursing facility serv10 ices. 

11 ‘‘(ii) HOMEBOUND REQUIREMENT

12 WAIVER FOR HOME HEALTH SERVICES.— 

13 Waiver of the homebound requirement for 

14 coverage of home health services. 

15 ‘‘(B) IMPROVING CARE COORDINATION

16 THROUGH ACCESS TO TELEHEALTH.— 

17 ‘‘(i) FLEXIBILITY IN FURNISHING

18 TELEHEALTH SERVICES.—In applying sec19 tion 1834(m) in the case of an ACO, the 

20 Secretary shall grant a waiver, and the 

21 ACO may elect, to have the limitations on 

22 originating site (under paragraph (4)(C) of 

23 such section) and on the use of store-and24 forward technologies (under paragraph (1) 

25 of such section) not apply. The previous 


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1 sentence shall not be construed as affect2 ing the authority of the Secretary under 

3 subsection (f) to waive other provisions of 

4 such section. 

5 ‘‘(ii) PROVISION OF REMOTE MONI6 TORING IN CONNECTION WITH HOME

7 HEALTH SERVICES.—Nothing in this sec8 tion shall be construed as preventing an 

9 ACO from paying for remote patient moni10 toring and home-based video conferencing 

11 services in connection with the provision of 

12 home health services (under conditions for 

13 which payment for such services would not 

14 be made under section 1895 for such serv15 ices) in a manner that is financially not 

16 more expensive than the furnishing of a 

17 home health visit. 

18 ‘‘(C) MOVING UP RISK TRACK ANNU19 ALLY.—Each year of an agreement period, the 

20 Secretary shall permit an ACO to make an elec21 tion to assume greater risk. 

22 ‘‘(4) DISCRETIONARY REVOCATION.—The Sec23 retary may revoke, at the Secretary’s discretion, a 

24 waiver granted under paragraph (3). 


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1 ‘‘(5) PROVISIONS FOR SHARING OF INTERNAL

2 COST SAVINGS.— 

3 ‘‘(A) IN GENERAL.—Subject to the suc4 ceeding provisions of this paragraph, the Sec5 retary shall permit an ACO to distribute inter6 nal cost savings among ACO participants pur7 suant to an internal cost savings sharing ar8 rangement if the arrangement meets the re9 quirements of subparagraph (B) and the ACO 

10 meets the reporting requirements of subpara11 graph (C) with respect to such arrangement. 

12 ‘‘(B) REQUIREMENTS RELATING TO DE13 SIGN OF ARRANGEMENT.—The requirements of 

14 this subparagraph for an internal cost savings 

15 sharing arrangement of an ACO are as follows: 

16 ‘‘(i) NO REDUCTION IN MEDICALLY

17 NECESSARY CARE.—ACO participants may 

18 not reduce or limit medically necessary 

19 items and services furnished to Medicare 

20 fee-for-service beneficiaries. 

21 ‘‘(ii) VOLUNTARY PARTICIPATION.— 

22 Participation by providers of services and 

23 suppliers in the arrangement is voluntary. 


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1 ‘‘(iii) TRANSPARENCY.—The arrange2 ment is transparent and subject to audit 

3 by the Secretary. 

4 ‘‘(iv) QUALITY OF CARE.—ACO par5 ticipants participating in the arrangement 

6 meet quality performance standards estab7 lished by the Secretary under subsection 

8 (b)(3). 

9 ‘‘(v) PAYMENT METHODOLOGY.—Dis10 tributions of internal cost savings under 

11 the arrangement is not based on the vol12 ume or value of referrals or business other13 wise generated. 

14 ‘‘(C) REPORTING REQUIREMENTS.—The 

15 requirements of this subparagraph for an ar16 rangement of an ACO is that the ACO provides 

17 the following information to the Secretary for 

18 purposes of evaluating the arrangement: 

19 ‘‘(i) METHODOLOGY.—The method20 ology for distributions of internal cost sav21 ings under the arrangement among all 

22 ACO participants, including the frequency 

23 of and the criteria for such distributions. 

24 ‘‘(ii) CARE REDESIGN.—A detailed ex25 planation of how the arrangement will 


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1 achieve improved quality and patient expe2 rience, as well as the anticipated cost sav3 ings. 

4 ‘‘(iii) ELIGIBILITY TO PARTICIPATE IN

5 ARRANGEMENT.—The criteria for partici6 pation by ACO participants, particularly 

7 professionals, in the arrangement. 

8 ‘‘(iv) DISTRIBUTION PLAN.—A com9 prehensive plan for distributions of inter10 nal cost savings under the arrangement. 

11 ‘‘(D) WAIVERS.—The Secretary shall waive 

12 such provisions of this title and title XI as may 

13 be necessary to carry out this paragraph. 

14 ‘‘(E) DEFINITIONS.—In this paragraph: 

15 ‘‘(i) INTERNAL COST SAVINGS SHAR16 ING ARRANGEMENT.—The term ‘internal 

17 cost savings sharing arrangement’ means 

18 an arrangement among ACO participants 

19 of an ACO for the distributions of internal 

20 cost savings to such ACO participants, in21 cluding to ACO professionals, solely from 

22 gains or savings that are a direct result of 

23 collaborative efforts among ACO partici24 pants of an ACO to improve the quality 

25 and efficiency of care furnished to MediVerDate Sep 11 2014 02:49 Dec 12, 2017 Jkt 079200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H4580.IH H4580

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1 care fee-for-service beneficiaries, but does 

2 not include shared savings under sub3 section (d)(2). 

4 ‘‘(ii) DISTRIBUTION OF INTERNAL

5 COST SAVINGS.—The term ‘distribution of 

6 internal cost savings’ means a payment of 

7 a percentage of the gains or savings from 

8 an internal cost savings sharing arrange9 ment to ACO participants. 

10 ‘‘(iii) ACO PARTICIPANTS.—The term 

11 ‘ACO participants’ means providers of 

12 services and suppliers participating in an 

13 ACO who voluntarily participate in an in14 ternal cost savings sharing arrangement 

15 under this paragraph.’’. 

16 (2) EFFECTIVE DATE.—The amendment made 

17 by paragraph (1) shall apply as if included in the 

18 enactment of section 3022 of Public Law 111–148. 

19 (3) CONFORMING AMENDMENT.—Effective as if 

20 included in the enactment of section 3021 of Public 

21 Law 111–148, the provisions of section 1899(l)(5) of 

22 the Social Security Act (relating to authority for dis23 tributions of internal cost savings under internal 

24 cost savings sharing arrangements), as added by 

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1 countable care organization payment and service de2 livery models (and other appropriate models) tested 

3 pursuant to section 1115A of the Social Security Act 

4 (42 U.S.C. 1315a). 

5 (b) STUDY AND REPORT ON FEASIBILITY ON PRO6 VIDING ELECTRONIC ACCESS TO MEDICARE CLAIMS

7 DATA.— 

8 (1) STUDY.—The Secretary of Health and 

9 Human Services shall conduct a study regarding the 

10 feasibility of establishing a system of electronic ac11 cess of providers of services and suppliers to in-proc12 ess and complete patient claims data. Such system 

13 may be a modification of an existing database, such 

14 as the Virtual Research Data Center. The study 

15 shall take into account the measures needed to en16 sure the security and privacy of beneficiary and pro17 vider information. 

18 (2) REPORT.—Not later than six months after 

19 the date of the enactment of this Act, the Secretary 

20 shall submit to Congress a report on such study. 

21 The Secretary shall include in such report such rec22 ommendations as the Secretary deems appropriate. 

23 (c) PERMITTING DE MINIMIS VARIATION FROM MIN24 IMUM ENROLLMENT REQUIREMENT.—Section 

25 1899(b)(2)(D) of the Social Security Act (42 U.S.C. 


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1 1395jjj(b)(2)(D)) is amended by inserting before the pe2 riod at the end the following: ‘‘, except that the Secretary 

3 may permit an ACO with fewer than 5,000 participants 

4 by a de minimis number (not to exceed 100) to be eligible 

5 to continue to participate in cases where such fewer num6 ber does not negatively impact the ACO’s participation in 

7 the program and the ACO meets other conditions to be 

8 so eligible’’. 

9 (d) PAYMENTS FOR SHARED SAVINGS.—Section 

10 1899(d)(2) of the Social Security Act (42 U.S.C. 

11 1395jjj(d)(2)) is amended by adding at the end the fol12 lowing: ‘‘For years beginning on or after January 1, 2018, 

13 the Secretary may use a sliding scale to increase by up 

14 to 10 percentage points the appropriate percent otherwise 

15 applied under this paragraph for an ACO that achieves 

16 the median of quality performance standards, or achieves 

17 quality improvement scores above such median, estab18 lished under subsection (b)(3). The Secretary shall not de19 crease such appropriate percent otherwise applied to an 

20 ACO because of the application of an increase under the 

21 previous sentence for another ACO.’’. 

22 (e) DEMONSTRATION FOR ALLOWING GROWTH OF

23 HCC SCORES.—Section 1899(d)(1)(B)(ii) of the Social 

24 Security Act (42 U.S.C. 1395jjj(d)(1)(B)(ii)) is amended 

25 by adding at the end the following: ‘‘In carrying out this 


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1 subsection, the Secretary shall establish a 3-year dem2 onstration project that develops and applies a method3 ology, similar to the Medicare Advantage normalization 

4 factor applied under section 1853(a)(3), that allows 

5 growth of HCC scores for those who are continuously en6 rolled with an ACO. The Secretary shall submit to Con7 gress a report on the results of such demonstration 

8 project.’’. 

9 (f) CREATING INCENTIVES FOR ACO DEVELOP10 MENT.—The Secretary of Health and Human Services 

11 may develop a mechanism to make permanent those ACO12 related pilot programs, including the Advance Payment 

13 ACO Model, that the Secretary determines have been suc14 cessful. The Secretary shall submit to Congress a report 

15 on the mechanism and shall include in the report such rec16 ommendations, including such changes in legislation, as 

17 the Secretary determines appropriate. 

Æ 


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