I 

114TH CONGRESS 

2D SESSION H. R. 6101 

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 

SEPTEMBER 21, 2016 

Mrs. BLACK (for herself and Mr. WELCH) 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 2016’’. 

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.— 

3 ‘‘(i) IN GENERAL.—Subject to clause 

4 (ii), in carrying out subsection (c) with re5 spect to any agreement with an ACO 

6 under this section, the ACO may elect 

7 under any such agreement prospective as8 signment of Medicare fee-for-service bene9 ficiaries before the beginning of a year to 

10 the ACO and a primary care ACO profes11 sional. 

12 ‘‘(ii) BENEFICIARY SELECTION OF

13 PRIMARY CARE ACO PROFESSIONALS.—The 

14 Secretary shall permit a beneficiary to se15 lect the primary care ACO professional 

16 within the ACO to which the beneficiary is 

17 assigned. 

18 ‘‘(B) INCLUSION OF ACO INFORMATION IN

19 WELCOME TO MEDICARE VISIT AND ANNUAL

20 WELLNESS VISITS.—The Secretary may encour21 age a primary care ACO professional to include, 

22 as part of the initial preventive physical exam23 ination under section 1861(ww)(1) or personal24 ized prevention plan services under section 

25 1861(hhh)(1) for a Medicare fee-for-service 


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1 beneficiary assigned to that professional under 

2 this section, to provide the beneficiary with in3 formation concerning the ACO program under 

4 this section, including information on any cost5 sharing reductions allowed under this section. 

6 ‘‘(3) MOVING FROM VOLUME TO VALUE.—Sub7 ject to paragraph (4)— 

8 ‘‘(A) REGULATORY RELIEF FOR MOVING

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

10 that has elected a two-sided risk model (as pro11 vided for under regulations), in addition to the 

12 authority provided under paragraph (1), the 

13 Secretary shall provide the following regulatory 

14 relief: 

15 ‘‘(i) 3-DAY PRIOR HOSPITALIZATION

16 WAIVER FOR SNF SERVICES.—Waiver of 

17 the 3-day prior hospitalization requirement 

18 for coverage of skilled nursing facility serv19 ices. 

20 ‘‘(ii) HOMEBOUND REQUIREMENT

21 WAIVER FOR HOME HEALTH SERVICES.— 

22 Waiver of the homebound requirement for 

23 coverage of home health services. 

24 ‘‘(B) IMPROVING CARE COORDINATION

25 THROUGH ACCESS TO TELEHEALTH.— 


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1 ‘‘(i) FLEXIBILITY IN FURNISHING

2 TELEHEALTH SERVICES.—In applying sec3 tion 1834(m) in the case of an ACO, the 

4 Secretary shall grant a waiver, and the 

5 ACO may elect, to have the limitations on 

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

7 such section) and on the use of store-and8 forward technologies (under paragraph (1) 

9 of such section) not apply. The previous 

10 sentence shall not be construed as affect11 ing the authority of the Secretary under 

12 subsection (f) to waive other provisions of 

13 such section. 

14 ‘‘(ii) PROVISION OF REMOTE MONI15 TORING IN CONNECTION WITH HOME

16 HEALTH SERVICES.—Nothing in this sec17 tion shall be construed as preventing an 

18 ACO from paying for remote patient moni19 toring and home-based video conferencing 

20 services in connection with the provision of 

21 home health services (under conditions for 

22 which payment for such services would not 

23 be made under section 1895 for such serv24 ices) in a manner that is financially not 


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1 more expensive than the furnishing of a 

2 home health visit. 

3 ‘‘(C) MOVING UP RISK TRACK ANNU4 ALLY.—Each year of an agreement period, the 

5 Secretary shall permit an ACO to make an elec6 tion to assume greater risk. 

7 ‘‘(4) DISCRETIONARY REVOCATION.—The Sec8 retary may revoke, at the Secretary’s discretion, a 

9 waiver granted under paragraph (3). 

10 ‘‘(5) PROVISIONS FOR SHARING OF INTERNAL

11 COST SAVINGS.— 

12 ‘‘(A) IN GENERAL.—Subject to the suc13 ceeding provisions of this paragraph, the Sec14 retary shall permit an ACO to distribute inter15 nal cost savings among ACO participants pur16 suant to an internal cost savings sharing ar17 rangement if the arrangement meets the re18 quirements of subparagraph (B) and the ACO 

19 meets the reporting requirements of subpara20 graph (C) with respect to such arrangement. 

21 ‘‘(B) REQUIREMENTS RELATING TO DE22 SIGN OF ARRANGEMENT.—The requirements of 

23 this subparagraph for an internal cost savings 

24 sharing arrangement of an ACO are as follows: 


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1 ‘‘(i) NO REDUCTION IN MEDICALLY

2 NECESSARY CARE.—ACO participants may 

3 not reduce or limit medically necessary 

4 items and services furnished to Medicare 

5 fee-for-service beneficiaries. 

6 ‘‘(ii) VOLUNTARY PARTICIPATION.— 

7 Participation by providers of services and 

8 suppliers in the arrangement is voluntary. 

9 ‘‘(iii) TRANSPARENCY.—The arrange10 ment is transparent and subject to audit 

11 by the Secretary. 

12 ‘‘(iv) QUALITY OF CARE.—ACO par13 ticipants participating in the arrangement 

14 meet quality performance standards estab15 lished by the Secretary under subsection 

16 (b)(3). 

17 ‘‘(v) PAYMENT METHODOLOGY.—Dis18 tributions of internal cost savings under 

19 the arrangement is not based on the vol20 ume or value of referrals or business other21 wise generated. 

22 ‘‘(C) REPORTING REQUIREMENTS.—The 

23 requirements of this subparagraph for an ar24 rangement of an ACO is that the ACO provides 


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1 the following information to the Secretary for 

2 purposes of evaluating the arrangement: 

3 ‘‘(i) METHODOLOGY.—The method4 ology for distributions of internal cost sav5 ings under the arrangement among all 

6 ACO participants, including the frequency 

7 of and the criteria for such distributions. 

8 ‘‘(ii) CARE REDESIGN.—A detailed ex9 planation of how the arrangement will 

10 achieve improved quality and patient expe11 rience, as well as the anticipated cost sav12 ings. 

13 ‘‘(iii) ELIGIBILITY TO PARTICIPATE IN

14 ARRANGEMENT.—The criteria for partici15 pation by ACO participants, particularly 

16 professionals, in the arrangement. 

17 ‘‘(iv) DISTRIBUTION PLAN.—A com18 prehensive plan for distributions of inter19 nal cost savings under the arrangement. 

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

21 such provisions of this title and title XI as may 

22 be necessary to carry out this paragraph. 

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

24 ‘‘(i) INTERNAL COST SAVINGS SHAR25 ING ARRANGEMENT.—The term ‘internal 


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1 cost savings sharing arrangement’ means 

2 an arrangement among ACO participants 

3 of an ACO for the distributions of internal 

4 cost savings to such ACO participants, in5 cluding to ACO professionals, solely from 

6 gains or savings that are a direct result of 

7 collaborative efforts among ACO partici8 pants of an ACO to improve the quality 

9 and efficiency of care furnished to Medi10 care fee-for-service beneficiaries, but does 

11 not include shared savings under sub12 section (d)(2). 

13 ‘‘(ii) DISTRIBUTION OF INTERNAL

14 COST SAVINGS.—The term ‘distribution of 

15 internal cost savings’ means a payment of 

16 a percentage of the gains or savings from 

17 an internal cost savings sharing arrange18 ment to ACO participants. 

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

20 ‘ACO participants’ means providers of 

21 services and suppliers participating in an 

22 ACO who voluntarily participate in an in23 ternal cost savings sharing arrangement 

24 under this paragraph.’’. 


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1 (2) EFFECTIVE DATE.—The amendment made 

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

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

4 (3) CONFORMING AMENDMENT.—Effective as if 

5 included in the enactment of section 3021 of Public 

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

7 the Social Security Act (relating to authority for dis8 tributions of internal cost savings under internal 

9 cost savings sharing arrangements), as added by 

10 paragraph (1), shall apply to participants in ac11 countable care organization payment and service de12 livery models (and other appropriate models) tested 

13 pursuant to section 1115A of the Social Security Act 

14 (42 U.S.C. 1315a). 

15 (b) STUDY AND REPORT ON FEASIBILITY ON PRO16 VIDING ELECTRONIC ACCESS TO MEDICARE CLAIMS

17 DATA.— 

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

19 Human Services shall conduct a study regarding the 

20 feasibility of establishing a system of electronic ac21 cess of providers of services and suppliers to in-proc22 ess and complete patient claims data. Such system 

23 may be a modification of an existing database, such 

24 as the Virtual Research Data Center. The study 

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1 sure the security and privacy of beneficiary and pro2 vider information. 

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

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

5 shall submit to Congress a report on such study. 

6 The Secretary shall include in such report such rec7 ommendations as the Secretary deems appropriate. 

8 (c) ASSIGNMENT TAKING INTO ACCOUNT SERVICES

9 OF NON-PHYSICIAN PRACTITIONERS IN CASES OF ACOS

10 IN RURAL OR UNDERSERVED AREAS OR AFFILIATED

11 WITH AN FQHC OR RURAL HEALTH CLINIC.—Section 

12 1899(c) of the Social Security Act (42 U.S.C. 1395jjj(c)) 

13 is amended by inserting before the period at the end the 

14 following: ‘‘, except that, for performance years beginning 

15 on or after January 1, 2017, in the case of an ACO that 

16 is located in a rural or medically underserved area or that 

17 is affiliated with a Federally qualified health center or 

18 rural health clinic, such determination shall be based on 

19 their utilization of primary care services provided under 

20 this title by any ACO professional’’. 

21 (d) PERMITTING DE MINIMIS VARIATION FROM MIN22 IMUM ENROLLMENT REQUIREMENT.—Section 

23 1899(b)(2)(D) of the Social Security Act (42 U.S.C. 

24 1395jjj(b)(2)(D)) is amended by inserting before the pe25 riod at the end the following: ‘‘, except that the Secretary 


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

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

3 to continue to participate in cases where such fewer num4 ber does not negatively impact the ACO’s participation in 

5 the program and the ACO meets other conditions to be 

6 so eligible’’. 

7 (e) PAYMENTS FOR SHARED SAVINGS.—Section 

8 1899(d)(2) of the Social Security Act (42 U.S.C. 

9 1395jjj(d)(2)) is amended by adding at the end the fol10 lowing: ‘‘For plan years beginning on or after January 1, 

11 2017, the Secretary may use a sliding scale to increase 

12 by up to 10 percentage points the appropriate percent oth13 erwise applied under this paragraph for an ACO that 

14 achieves the median of quality performance standards, or 

15 achieves quality improvement scores above such median, 

16 established under subsection (b)(3). The Secretary shall 

17 not decrease such appropriate percent otherwise applied 

18 to an ACO because of the application of an increase under 

19 the previous sentence for another ACO.’’. 

20 (f) DEMONSTRATION FOR ALLOWING GROWTH OF

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

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

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

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1 ology, similar to the Medicare Advantage normalization 

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

3 growth of HCC scores for those who are continuously en4 rolled with an ACO. The Secretary shall submit to Con5 gress a report on the results of such demonstration 

6 project.’’. 

7 (g) CREATING INCENTIVES FOR ACO DEVELOP8 MENT.—The Secretary of Health and Human Services 

9 may develop a mechanism to make permanent those ACO10 related pilot programs, including the Advance Payment 

11 ACO Model, that have been successful. The Secretary 

12 shall submit to Congress a report on the mechanism and 

13 shall include in the report such recommendations, includ14 ing such changes in legislation, as the Secretary deems 

15 appropriate. 

Æ 


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