IIB 

114TH CONGRESS 

1ST SESSION H. R. 2570 

IN THE SENATE OF THE UNITED STATES 

JUNE 18, 2015 

Received; read twice and referred to the Committee on Finance 

AN ACT 

To amend title XVIII of the Social Security Act with respect 

to the treatment of patient encounters in ambulatory 

surgical centers in determining meaningful EHR use, 

establish a demonstration program requiring the utilization of Value-Based Insurance Design 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 and 

lower health care expenditures, 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, 


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Strengthening Medi3 care Advantage through Innovation and Transparency for 

4 Seniors Act of 2015’’. 

5 SEC. 2. TREATMENT OF PATIENT ENCOUNTERS IN AMBULA6 TORY SURGICAL CENTERS IN DETERMINING 

7 MEANINGFUL EHR USE. 

8 Section 1848(o)(2) of the Social Security Act (42 

9 U.S.C. 1395w–4(o)(2)) is amended by adding at the end 

10 of the following new subparagraph: 

11 ‘‘(D) TREATMENT OF PATIENT ENCOUN12 TERS AT AMBULATORY SURGICAL CENTERS.— 

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

14 (ii), for a payment year after 2015 any pa15 tient encounter of an eligible professional 

16 occurring at an ambulatory surgical center 

17 (described in section 1833(i)(1)(A)) shall 

18 not be treated as a patient encounter in 

19 determining whether an eligible profes20 sional qualifies as a meaningful EHR user. 

21 Notwithstanding any other provision of 

22 law, the Secretary may implement this 

23 clause by program instruction or otherwise. 

24 ‘‘(ii) SUNSET.—Clause (i) shall no 

25 longer apply as of the first payment year 

26 that begins more than 3 years after the 


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1 date the Secretary determines, through no2 tice and comment rulemaking, that cer3 tified EHR technology is applicable to the 

4 ambulatory surgical center setting.’’. 

5 SEC. 3. VALUE-BASED INSURANCE DESIGN DEMONSTRA6 TION PROGRAM. 

7 (a) IN GENERAL.—The Secretary of Health and 

8 Human Services (in this section referred to as the ‘‘Sec9 retary’’) shall establish a 3-year demonstration program 

10 to test the use of value-based insurance design methodolo11 gies (as defined in subsection (c)(1)) under eligible Medi12 care Advantage plans offered by Medicare Advantage or13 ganizations under part C of title XVIII of the Social Secu14 rity Act (42 U.S.C. 1395w–21 et seq.). The Secretary may 

15 extend the program to a duration of 4 or 5 years, as deter16 mined necessary by the Secretary in coordination with the 

17 Centers for Medicare and Medicaid Innovation. 

18 (b) DEMONSTRATION PROGRAM DESIGN.— 

19 (1) SELECTION OF MEDICARE ADVANTAGE

20 SITES AND ELIGIBLE MEDICARE ADVANTAGE

21 PLANS.—Not later than 2 years after the date of the 

22 enactment of this Act, the Secretary shall— 

23 (A) select at least two Medicare Advantage 

24 sites with respect to which to conduct the dem25 onstration program under this section; and 


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1 (B) approve eligible Medicare Advantage 

2 plans to participate in such demonstration pro3 gram. 

4 In selecting Medicare Advantage sites under sub5 paragraph (A), the Secretary shall take into account 

6 area differences as well as the availability of health 

7 maintenance organization plans and preferred pro8 vider organization plans offered in such sites. 

9 (2) START OF DEMONSTRATION.—The dem10 onstration program shall begin not later than the 

11 third plan year beginning after the date of the en12 actment of this Act. 

13 (3) ELIGIBLE MEDICARE ADVANTAGE PLANS.— 

14 For purposes of this section, the term ‘‘eligible 

15 Medicare Advantage plan’’ means a Medicare Ad16 vantage plan under part C of title XVIII of the So17 cial Security Act (42 U.S.C. 1395w–21 et seq.) that 

18 meets the following requirements: 

19 (A) The plan is an Medicare Advantage re20 gional plan (as defined in paragraph (4) of sec21 tion 1859(b) of such Act (42 U.S.C. 1395w– 

22 28(b))) or Medicare Advantage local plan (as 

23 defined in paragraph (5) of such section) of24 fered in the Medicare Advantage region selected 

25 under paragraph (1)(A). 


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1 (B) The plan has— 

2 (i)(I) a quality rating under section 

3 1853(o) of such Act (42 U.S.C. 1395w– 

4 23(o)) of 4 stars or higher based on the 

5 most recent data available for such year, 

6 or (II) in the case of a specialized Medi7 care Advantage plan for special needs indi8 viduals, as defined in section 

9 1859(b)(6)(A) of such Act (42 U.S.C. 

10 1395w–28(b)(6)(A)), a quality rating 

11 under section 1853(o) of such Act (42 

12 U.S.C. 1395w–23(o)) equal to or higher 

13 than the national average for special needs 

14 plans (excluding Institutional-Special needs 

15 plans) based on the most recent data avail16 able for such year; and 

17 (ii) at least 20 percent of the popu18 lation to whom the plan is offered in a 

19 service area consists of subsidy eligible in20 dividuals (as defined in section 1860D– 

21 14(a)(3)(A) of the Social Security Act (42 

22 U.S.C. 1395w–114(a)(3)(A))). 

23 (4) DISCLOSURE TO BENEFICIARIES.—The Sec24 retary shall provide to each individual eligible to en25 roll under a Medicare Advantage plan approved to 


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1 participate under the demonstration program during 

2 a plan year for which the plan is so selected— 

3 (A) notification that the plan is partici4 pating in such demonstration program; 

5 (B) background information on the dem6 onstration program; 

7 (C) clinical data derived from the studies 

8 resulting from the demonstration program; and 

9 (D) notification of the potential benefits 

10 that the individual will receive, and of the other 

11 potential impacts that the individual will experi12 ence, on account of the participation of the plan 

13 in the demonstration program. 

14 (c) VALUE-BASED INSURANCE DESIGN METHODOLO15 GIES.— 

16 (1) DEFINITION.—For purposes of this section, 

17 the term ‘‘value-based insurance design method18 ology’’ means a methodology for identifying specific 

19 prescription medications, and clinical services that 

20 are payable under title XVIII of the Social Security 

21 Act, for which the reduction of copayments, coinsur22 ance, or both, would improve the management of 

23 specific chronic clinical conditions because of the 

24 high value and effectiveness of such medications and 


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1 services for such specific chronic clinical conditions, 

2 as approved by the Secretary. 

3 (2) USE OF METHODOLOGIES TO REDUCE CO4 PAYMENTS AND COINSURANCE.—A Medicare Advan5 tage organization offering an eligible Medicare Ad6 vantage plan approved to participate under the dem7 onstration program, for each plan year for which the 

8 plan is so selected and using value-based insurance 

9 design methodologies— 

10 (A) shall identify each prescription medica11 tion and clinical service covered under such 

12 plan for which the plan proposes to reduce or 

13 eliminate the copayment or coinsurance, with 

14 respect to the management of specific chronic 

15 clinical conditions (as specified by the Sec16 retary) of Medicare Advantage eligible individ17 uals (as defined in section 1851(a)(3) of the 

18 Social Security Act (42 U.S.C. 1395w– 

19 21(a)(3))) enrolled under such plans, for such 

20 plan year; 

21 (B) may, for such plan year, reduce or 

22 eliminate copayments, coinsurance, or both for 

23 such prescription medication and clinical serv24 ices so identified with respect to the manage25 ment of such conditions of such individuals— 


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1 (i) if such reduction or elimination is 

2 evidence-based and for the purpose of en3 couraging such individuals in such plan to 

4 use such prescription medications and clin5 ical services (such as preventive care, pri6 mary care, specialty visits, diagnostic tests, 

7 procedures, and durable medical equip8 ment) with respect to such conditions; and 

9 (ii) for the purpose of encouraging 

10 such individuals in such plan to use health 

11 care providers that such organization has 

12 identified with respect to such plan year as 

13 being high value providers; and 

14 (C) if a reduction or elimination is applied 

15 pursuant to subparagraph (B), with respect to 

16 such medication and clinical services, shall, for 

17 such plan year, count toward the deductible ap18 plicable to such individual under such plan 

19 amounts that would have been payable by the 

20 individual as copayment or coinsurance for such 

21 medication and services if the reduction or 

22 elimination had not been applied. 

23 (3) PROHIBITION OF INCREASES OF COPAY24 MENTS AND COINSURANCE.—In no case may any 

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1 onstration program increase, for any plan year for 

2 which the plan is so participating, the amount of co3 payments or coinsurance for any item or service cov4 ered under such plan for purposes of discouraging 

5 the use of such item or service. 

6 (d) REPORT ON IMPLEMENTATION.— 

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

8 the date on which the demonstration program under 

9 this section begins under subsection (b)(2), the Sec10 retary shall submit to Congress a report on the sta11 tus of the implementation of the demonstration pro12 gram. 

13 (2) ELEMENTS.—The report required by para14 graph (1) shall, with respect to eligible Medicare Ad15 vantage plans participating in the demonstration 

16 program for the first plan year of such program, in17 clude the following: 

18 (A) A list of each medication and service 

19 identified pursuant to subsection (c)(2)(A) for 

20 such plan with respect to such plan year. 

21 (B) For each such medication or service so 

22 identified, the amount of the copayment or co23 insurance required under such plan with respect 

24 to such plan year for such medication or service 


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1 and the amount of the reduction of such copay2 ment or coinsurance from a previous plan year. 

3 (C) For each provider identified pursuant 

4 to subsection (c)(2)(B)(ii) for such plan with 

5 respect to such plan year, a statement of the 

6 amount of the copayment or coinsurance re7 quired under such plan with respect to such 

8 plan year and the amount of the reduction of 

9 such copayment or coinsurance from the pre10 vious plan year. 

11 (e) REVIEW AND ASSESSMENT OF UTILIZATION OF

12 VALUE-BASED INSURANCE DESIGN METHODOLOGIES.— 

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

14 into a contract or agreement with an independent 

15 entity to review and assess the implementation of 

16 the demonstration program under this section. The 

17 review and assessment shall include the following: 

18 (A) An assessment of the utilization of 

19 value-based insurance design methodologies by 

20 Medicare Advantage plans participating under 

21 such program. 

22 (B) An analysis of whether reducing or 

23 eliminating the copayment or coinsurance for 

24 each medication and clinical service identified 

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1 creased adherence to medication regimens, in2 creased service utilization, improvement in qual3 ity metrics, better health outcomes, and en4 hanced beneficiary experience. 

5 (C) An analysis of the extent to which 

6 costs to Medicare Advantage plans under part 

7 C of title XVIII of the Social Security Act par8 ticipating in the demonstration program is less 

9 than costs to Medicare Advantage plans under 

10 such part that are not participating in the dem11 onstration program. 

12 (D) An analysis of whether reducing or 

13 eliminating the copayment or coinsurance for 

14 providers identified pursuant to subsection 

15 (c)(2)(B)(ii) resulted in improvement in quality 

16 metrics, better health outcomes, and enhanced 

17 beneficiary experience. 

18 (E) An analysis, for each provider so iden19 tified, the extent to which costs to Medicare Ad20 vantage plans under part C of title XVIII of the 

21 Social Security Act participating in the dem22 onstration program is less than costs to Medi23 care Advantage plans under such part that are 

24 not participating in the demonstration program. 


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1 (F) Such other matters as the Secretary 

2 considers appropriate. 

3 (2) REPORT.—The contract or agreement en4 tered into under paragraph (1) shall require such 

5 entity to submit to the Secretary a report on the re6 view and assessment conducted by the entity under 

7 such paragraph in time for the inclusion of the re8 sults of such report in the report required by para9 graph (3). Such report shall include a description, in 

10 clear language, of the manner in which the entity 

11 conducted the review and assessment. 

12 (3) REPORT TO CONGRESS.—Not later than 4 

13 years after the date on which the demonstration pro14 gram begins under subsection (b)(2), the Secretary 

15 shall submit to Congress a report on the review and 

16 assessment of the demonstration program conducted 

17 under this subsection. The report shall include the 

18 following: 

19 (A) A description of the results of the re20 view and assessment included in the report sub21 mitted pursuant to paragraph (2). 

22 (B) Such recommendations as the Sec23 retary considers appropriate for enhancing the 

24 utilization of the methodologies applied under 

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1 vantage plans under part C of title XVIII of the 

2 Social Security Act so as to reduce copayments 

3 and coinsurance under such plans paid by 

4 Medicare beneficiaries for high-value prescrip5 tion medications and clinical services for which 

6 coverage is provided under such plans and to 

7 otherwise improve the quality of health care 

8 provided under such plans. 

9 (4) OVERSIGHT REPORT.—Not later than 3 

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

11 Comptroller General of the United States shall sub12 mit to Congress a report on the demonstration pro13 gram that includes an assessment, with respect to 

14 individuals enrolled under Medicare Advantage plans 

15 approved to participate under the demonstration 

16 program, of the impact that the age, co-morbidities, 

17 and geographic regions of such individuals had upon 

18 the implementation of the demonstration program by 

19 the plans with respect to such individuals. 

20 (f) SAVINGS.—In no case may any reduction in bene21 ficiary copayments or coinsurance resulting from the im22 plementation of the demonstration program under this 

23 section result in expenditures under parts A, B, and D 

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1 er than such expenditures without application of this sec2 tion. 

3 (g) EXPANSION OF DEMONSTRATION PROGRAM.— 

4 Taking into account the review and assessment conducted 

5 under subsection (e), the Secretary may, through notice 

6 and comment rulemaking, expand (including implementa7 tion on a nationwide basis) the duration and scope of the 

8 demonstration program under title XVIII of the Social Se9 curity Act, other than under the original medicare fee-for10 service program under parts A and B of such title, to the 

11 extent determined appropriate by the Secretary, if the re12 quirements of paragraphs (1), (2), and (3) of subsection 

13 (c) of section 1115A of the Social Security Act (42 U.S.C. 

14 1315a), as applied to the testing of a model under sub15 section (b) of such section, applied to the demonstration 

16 under this section. 

17 (h) WAIVER AUTHORITY.—The Secretary may waive 

18 such provisions of titles XI and XVIII of the Social Secu19 rity Act as may be necessary to carry out the demonstra20 tion program under this section. 

21 (i) IMPLEMENTATION FUNDING.—For purposes of 

22 carrying out the demonstration program under this sec23 tion, the Secretary shall provide for the transfer from the 

24 Federal Hospital Insurance Trust Fund under section 

25 1817 of the Social Security Act (42 U.S.C. 1395i) and 


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1 the Federal Supplementary Insurance Trust Fund under 

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

3 including the Medicare Prescription Drug Account in such 

4 Trust Fund, in such proportion as determined appropriate 

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

6 SEC. 4. TREATMENT OF INFUSION DRUGS FURNISHED 

7 THROUGH DURABLE MEDICAL EQUIPMENT. 

8 Section 1842(o)(1) of the Social Security Act (42 

9 U.S.C. 1395u(o)(1)) is amended— 

10 (1) in subparagraph (C), by inserting ‘‘(and in11 cluding a drug or biological described in subpara12 graph (D)(i) furnished on or after January 1, 

13 2017)’’ after ‘‘2005’’; and 

14 (2) in subparagraph (D)— 

15 (A) by striking ‘‘infusion drugs’’ and in16 serting ‘‘infusion drugs or biologicals’’ each 

17 place it appears; and 

18 (B) in clause (i)— 

19 (i) by striking ‘‘2004’’ and inserting 

20 ‘‘2004, and before January 1, 2017’’; and 

21 (ii) by striking ‘‘for such drug’’. 


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1 SEC. 5. SENSE OF CONGRESS REGARDING THE IMPLEMEN2 TATION AND DISTRIBUTION OF QUALITY IN3 CENTIVE PAYMENTS TO MEDICARE ADVAN4 TAGE PLANS. 

5 It is the sense of Congress that— 

6 (1) the Secretary of Health and Human Serv7 ices has incorrectly interpreted subsection (n) of sec8 tion 1853 of the Social Security Act (42 U.S.C. 

9 1395w–23) as prohibiting the provision of any Medi10 care quality incentive payments under subsection (o) 

11 of such section with respect to Medicare Advantage 

12 plans that exceed the payment benchmark cap under 

13 such subsection (n) for the area served by such 

14 plans; and 

15 (2) the Secretary should immediately apply 

16 quality incentive payments under such subsection (o) 

17 with respect to such Medicare Advantage plans with18 out regard to the limits set forth in such subsection 

19 (n). 

20 SEC. 6. MEDICARE IMPROVEMENT FUND. 

21 Section 1898(b)(1) of the Social Security Act (42 

22 U.S.C. 1395iii(b)(1)) is amended by striking ‘‘during and 

23 after fiscal year 2020, $0’’ and inserting ‘‘after fiscal year 

24 2020, $220,000,000’’. 


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1 SEC. 7. NON-INCLUSION OF DME INFUSION DRUGS UNDER 

2 DME COMPETITIVE ACQUISITION PROGRAMS. 

3 (a) IN GENERAL.—Section 1847(a)(2)(A) of the So4 cial Security Act (42 U.S.C. 1395w–3(a)(2)(A)) is amend5 ed— 

6 (1) by striking ‘‘and excluding’’ and inserting ‘‘, 

7 excluding’’; and 

8 (2) by inserting before the period at the end the 

9 following: ‘‘, and excluding drugs and biologicals de10 scribed in section 1842(o)(1)(D)’’. 

11 (b) CONFORMING AMENDMENT.—Section 

12 1842(o)(1)(D)(ii) of the Social Security Act (42 U.S.C. 

13 1395u(o)(1)(D)(ii)) is amended by striking ‘‘2007’’ and 

14 inserting ‘‘2007, and before the date of the enactment of 

15 the Strengthening Medicare Advantage through Innova16 tion and Transparency for Seniors Act of 2015’’. 

Passed the House of Representatives June 17, 2015. 

Attest: KAREN L. HAAS, 

Clerk. 


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