II 

114TH CONGRESS 

1ST SESSION S. 1396 

To establish a demonstration program requiring the utilization of ValueBased Insurance Design in order to demonstrate that reducing the copayments or coinsurance charged to Medicare beneficiaries for selected highvalue prescription medications and clinical services can increase their 

utilization and ultimately improve clinical outcomes, enhance beneficiary 

satisfaction, and lower health care expenditures. 

IN THE SENATE OF THE UNITED STATES 

MAY 20, 2015 

Mr. THUNE (for himself and Ms. STABENOW) introduced the following bill; 

which was read twice and referred to the Committee on Finance 

A BILL 

To establish a demonstration program requiring the utilization of Value-Based Insurance Design in order to demonstrate that reducing the copayments or coinsurance 

charged to Medicare beneficiaries for selected high-value 

prescription medications and clinical services can increase 

their utilization and ultimately improve clinical outcomes, 

enhance beneficiary satisfaction, and lower health care 

expenditures. 

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


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Value-Based Insurance 

3 Design Seniors Copayment Reduction Act of 2015’’. 

4 SEC. 2. FINDINGS. 

5 Congress makes the following findings: 

6 (1) A growing body of evidence demonstrates 

7 that increases in patient-level financial barriers (in8 cluding deductibles, copayments, and coinsurance) 

9 for high-value medical services (such as prescription 

10 medications, clinician visits, diagnostic tests, and 

11 procedures) systematically reduces the use of such 

12 services. Savings attributable to cost-related, de13 creased utilization of specific services may lead to an 

14 increase in total medical expenditures due to in15 creased use of other related clinical services, such as 

16 hospitalizations and emergency room visits. 

17 (2) Empirical research studies demonstrate that 

18 reductions in beneficiary out-of-pocket expenses for 

19 high-value prescription medications and clinical serv20 ices can mitigate the adverse health and financial 

21 consequences attributable to cost-related decreased 

22 utilization of high-value services. 

23 (3) Financial barriers to prescription medica24 tions and clinical services that are deemed to be 

25 high-value should be reduced or eliminated to in26 crease their use. 


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1 (4) Value-Based Insurance Design is a method2 ology that adjusts patient out-of-pocket costs for 

3 prescription medications and clinical services accord4 ing to the clinical value, not exclusively the cost. 

5 Value-Based Insurance Design is based on the con6 cept of clinical nuance that recognizes— 

7 (A) prescription medications and clinical 

8 services differ in the clinical benefit provided; 

9 and 

10 (B) the clinical benefit derived from a spe11 cific prescription medication or clinical service 

12 depends on the clinical situation, the provider, 

13 and where the care is delivered. 

14 (5) The current ‘‘one-size-fits-all’’ copayment or 

15 coinsurance design for prescription medications and 

16 clinical services provided under the Medicare pro17 gram does not recognize the well-established value 

18 differences in health outcomes produced by various 

19 medical interventions. 

20 (6) The establishment by Medicare of copay21 ment and coinsurance requirements using Value22 Based Insurance Design methodologies will improve 

23 patient-centered health outcomes, enhance personal 

24 responsibility, and afford a more efficient use of tax25 payer dollars. 


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1 SEC. 3. DEMONSTRATION PROGRAM. 

2 (a) IN GENERAL.—Not later than 1 year after the 

3 date of enactment of this Act, the Secretary of Health and 

4 Human Services (in this section referred to as the ‘‘Sec5 retary’’) shall establish a demonstration program to test 

6 Value-Based Insurance Design methodologies in Medicare 

7 Advantage plans under part C of title XVIII of the Social 

8 Security Act for beneficiaries with chronic clinical condi9 tions. 

10 (b) DEMONSTRATION PROGRAM DESIGN.— 

11 (1) IN GENERAL.—The Secretary shall select 

12 not less than 2 Medicare Advantage plans to partici13 pate in the demonstration program under this sec14 tion. 

15 (2) REQUIREMENTS.—A Medicare Advantage 

16 plan selected to participate in the demonstration 

17 program under paragraph (1) shall meet the fol18 lowing requirements: 

19 (A) The plan offers a coordinated Medicare 

20 Part D drug benefit. 

21 (B) The plan and the Medicare Advantage 

22 organization offering the plan meet such other 

23 criteria as the Secretary determines appro24 priate. 

25 (c) EXPANSION OF DEMONSTRATION PROGRAM.— 

26 The Secretary shall expand the demonstration program by 


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1 issuing regulations to implement, on a permanent basis, 

2 the components of the demonstration program that are 

3 beneficial to Medicare beneficiaries and the Medicare pro4 gram, unless the report under subsection (e) or (f)(3) con5 tains an evaluation that the demonstration program under 

6 this section— 

7 (1) increases Medicare program expenditures 

8 for beneficiaries participating in the demonstration 

9 program; or 

10 (2) decreases the quality of health care services 

11 provided to Medicare beneficiaries participating in 

12 the demonstration program. 

13 (d) VALUE-BASED INSURANCE DESIGN METHOD14 OLOGY.— 

15 (1) VALUE-BASED INSURANCE DESIGN.—For 

16 purposes of this section, ‘‘Value-Based Insurance 

17 Design’’ is a methodology for identifying specific 

18 prescription medications and clinical services for 

19 which copayments or coinsurance should be reduced 

20 or eliminated due to the high-value and effectiveness 

21 of such medications and services for specific clinical 

22 conditions. 

23 (2) REDUCTION OF COPAYMENTS AND COINSUR24 ANCE.—Under the demonstration program, a Medi25 care Advantage organization, using Value-Based InVerDate Sep 11 2014 22:11 May 27, 2015 Jkt 049200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S1396.IS S1396

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1 surance Design methodologies, shall identify each 

2 prescription medication and clinical service for which 

3 the amount of the copayment or coinsurance payable 

4 should be reduced or eliminated. 

5 (3) REDUCTION OF COPAYMENTS AND COINSUR6 ANCE TO ENCOURAGE USE OF SPECIFIC CLINICAL

7 SERVICES.—Under the demonstration program, the 

8 Medicare Advantage organization, using Value9 Based Insurance Design, may lower cost-sharing 

10 under the plan for the purpose of encouraging en11 rollees to use prescription medications and clinical 

12 services (such as preventive care, primary care, spe13 cialty visits, diagnostic tests, procedures, and dura14 ble medical equipment) that such organization has 

15 identified as high-value for the management of speci16 fied clinical conditions in paragraph (5). Any such 

17 variation on copayment or coinsurance by a Medi18 care Advantage organization must occur on an an19 nual basis and be evidence-based. 

20 (4) REDUCTION OF COPAYMENTS AND COINSUR21 ANCE TO ENCOURAGE USE OF SPECIFIC HIGH-PER22 FORMING PROVIDERS.—Under the demonstration 

23 program, the Medicare Advantage organization, 

24 using Value-Based Insurance Design, may lower 

25 cost-sharing under the plan for the purpose of enVerDate Sep 11 2014 22:11 May 27, 2015 Jkt 049200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S1396.IS S1396

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1 couraging enrollees to use providers that such orga2 nization has identified as high-performing based on 

3 quality metrics. Any such variation on copayment or 

4 coinsurance by a Medicare Advantage organization 

5 must occur on an annual basis. 

6 (5) SPECIFIC CLINICAL CONDITIONS.—In iden7 tifying clinical conditions for purposes of paragraph 

8 (3), the Medicare Advantage organization shall, at a 

9 minimum, consider the services utilized across the 

10 spectrum of care in the management of the following 

11 clinical conditions: 

12 (A) Asthma. 

13 (B) Atrial fibrillation. 

14 (C) Deep venous thrombosis. 

15 (D) Cancer. 

16 (E) Chronic obstructive pulmonary disease. 

17 (F) Chronic renal failure/End stage renal 

18 disease. 

19 (G) Congestive heart failure. 

20 (H) Ischemic heart disease/Myocardial in21 farction. 

22 (I) Depression. 

23 (J) Diabetes mellitus. 

24 (K) Hyperlipidemia. 

25 (L) Hypertension. 


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1 (M) Osteoporosis. 

2 (N) Stroke. 

3 (O) Tobacco abuse disorder. 

4 (6) PROHIBITION OF INCREASES OF COPAY5 MENTS AND COINSURANCE.—A Medicare Advantage 

6 plan selected to participate in the demonstration 

7 program under paragraph (1) may not raise cost8 sharing on any item or service to discourage its use. 

9 (e) REPORT ON IMPLEMENTATION.— 

10 (1) IN GENERAL.—Not later than 1 year after 

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

12 shall submit to Congress a report on the implemen13 tation by the Secretary of the demonstration pro14 gram under this section. 

15 (2) ELEMENTS.—The report required by para16 graph (1) shall include the following: 

17 (A) A statement setting forth each medica18 tion and clinical service identified pursuant to 

19 subsection (d)(3). 

20 (B) For each such medication or clinical 

21 service identified pursuant to subsection (d)(3), 

22 a statement of the amount of the copayment or 

23 coinsurance required to be paid for such service 

24 and the amount of the reduction from previous 

25 cost-sharing levels. 


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1 (C) For each such high-performing pro2 vider identified pursuant to subsection (d)(4), a 

3 statement of the amount of the copayment or 

4 coinsurance required to be paid for such clini5 cian visit and the amount of the reduction from 

6 previous cost-sharing levels. 

7 (f) REVIEW AND ASSESSMENT OF UTILIZATION OF

8 VALUE-BASED INSURANCE DESIGN METHODOLOGIES.— 

9 (1) IN GENERAL.—The Secretary shall enter 

10 into a contract or agreement with an independent, 

11 nonbiased entity having expertise in Value-Based In12 surance Design to review and assess the implemen13 tation of the demonstration program under this sec14 tion. The review and assessment shall include the 

15 following: 

16 (A) An assessment of the utilization of 

17 Value-Based Insurance Design methodologies 

18 referred to in subsection (d). 

19 (B) An analysis of whether reducing or 

20 eliminating the copayment or coinsurance for 

21 each medication and clinical service identified 

22 pursuant to subsection (d)(3) resulted in in23 creased adherence to medication regimens, in24 creased service utilization, improvement in qualVerDate Sep 11 2014 22:11 May 27, 2015 Jkt 049200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S1396.IS S1396

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1 ity metrics, better health outcomes, or enhanced 

2 beneficiary experience. 

3 (C) An analysis of the cost-savings result4 ing from reducing or eliminating the copayment 

5 or coinsurance for each medication or clinical 

6 service so identified. 

7 (D) An analysis of whether reducing or 

8 eliminating the copayment or coinsurance for 

9 each high-performing provider identified pursu10 ant to subsection (d)(4) resulted in improve11 ment in quality metrics, better health outcomes, 

12 or enhanced beneficiary experience. 

13 (E) An analysis of the cost-savings result14 ing from reducing or eliminating the copayment 

15 or coinsurance for each high-performing pro16 vider so identified. 

17 (F) Such other matters as the Secretary 

18 considers appropriate. 

19 (2) REPORT.—The contract or agreement en20 tered into under paragraph (1) shall require the en21 tity concerned to submit to the Secretary a report on 

22 the review and assessment conducted by the entity 

23 under that paragraph in time for the inclusion of the 

24 results of such report in the report required by para25 graph (3). 


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1 (3) REPORT TO CONGRESS.—Not later than 3 

2 years after the date of the enactment of this Act, the 

3 Secretary shall submit to Congress a report on the 

4 review and assessment conducted under this sub5 section. The report shall include the following: 

6 (A) A description of the results of the re7 view and assessment. 

8 (B) Such recommendations as the Sec9 retary considers appropriate for enhancing the 

10 utilization of the methodologies referred to in 

11 subsection (d)(1) so as to reduce copayments 

12 and coinsurance paid by Medicare beneficiaries 

13 for high-value prescription medications and 

14 clinical services furnished under the Medicare 

15 program and to otherwise improve the quality 

16 of health care provided under such Medicare 

17 program. 

18 (g) WAIVER.—The Secretary may waive such provi19 sions of titles XI and XVIII of the Social Security Act 

20 as may be necessary to carry out the demonstration pro21 gram under this section. 

22 (h) IMPLEMENTATION FUNDING.—For purposes of 

23 carrying out the demonstration program under this sec24 tion, the Secretary shall provide for the transfer from the 

25 Federal Hospital Insurance Trust Fund under section 


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1 1817 of the Social Security Act (42 U.S.C. 1395i) and 

2 the Federal Supplementary Insurance Trust Fund under 

3 section 1841 of the Social Security Act (42 U.S.C. 1395t), 

4 including the Medicare Prescription Drug Account in such 

5 Trust Fund, in such proportion as determined appropriate 

6 by the Secretary, of such sums as may be necessary. 

Æ 


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