I 

114TH CONGRESS 

1ST SESSION H. R. 2581 

To amend title XVIII of the Social Security Act to establish a 3-year demonstration program to test the use of value-based insurance design methodologies under eligible Medicare Advantage plans, to preserve Medicare 

beneficiary choice under Medicare Advantage, to revise the treatment 

under the Medicare program of infusion drugs furnished through durable 

medical equipment, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 29, 2015 

Mr. BRADY of Texas 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 establish 

a 3-year demonstration program to test the use of valuebased insurance design methodologies under eligible 

Medicare Advantage plans, to preserve Medicare beneficiary choice under Medicare Advantage, to revise the 

treatment under the Medicare program of infusion drugs 

furnished through durable medical equipment, 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. DEMONSTRATION PROGRAM. 

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

3 Human Services (in this section referred to as the ‘‘Sec4 retary’’) shall establish a 3-year demonstration program 

5 to test the use of value-based insurance design methodolo6 gies (as defined in subsection (c)(1)) under eligible Medi7 care Advantage plans offered by Medicare Advantage or8 ganizations under part C of title XVIII of the Social Secu9 rity Act (42 U.S.C. 1395w–21 et seq.). 

10 (b) DEMONSTRATION PROGRAM DESIGN.— 

11 (1) SELECTION OF MEDICARE ADVANTAGE

12 SITES AND ELIGIBLE MEDICARE ADVANTAGE

13 PLANS.—Not later than two years after the date of 

14 the enactment of this Act, the Secretary shall— 

15 (A) select at least two Medicare Advantage 

16 sites with respect to which to conduct the dem17 onstration program under this section; and 

18 (B) approve eligible Medicare Advantage 

19 plans to participate in such demonstration pro20 gram. 

21 In selecting Medicare Advantage sites under sub22 paragraph (A), the Secretary shall take into account 

23 area differences as well as the availability of health 

24 maintenance organization plans and preferred pro25 vider organization plans offered in such sites. 


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1 (2) START OF DEMONSTRATION.—The dem2 onstration program shall begin not later than the 

3 third plan year beginning after the date of the en4 actment of this Act. 

5 (3) ELIGIBLE MEDICARE ADVANTAGE PLANS.— 

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

7 Medicare Advantage plan’’ means a Medicare Ad8 vantage plan under part C of title XVIII of the So9 cial Security Act (42 U.S.C. 1395w–21 et seq.) that 

10 meets the following requirements: 

11 (A) The plan is an Medicare Advantage re12 gional plan (as defined in paragraph (4) of sec13 tion 1859(b) of such Act (42 U.S.C. 1395w– 

14 28(b))) or Medicare Advantage local plan (as 

15 defined in paragraph (5) of such section) of16 fered in the Medicare Advantage region selected 

17 under paragraph (1)(A). 

18 (B) The plan has— 

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

20 1853(n)(4) of such Act (42 U.S.C. 1395w– 

21 23(n)(4)) of 4 stars or higher based on the 

22 most recent data available for such year, 

23 or 

24 (II) in the case of a specialized Medi25 care Advantage plan for special needs indiVerDate Sep 11 2014 02:13 May 30, 2015 Jkt 049200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2581.IH H2581

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1 viduals, as defined in section 

2 1859(b)(6)(A) of such Act (42 U.S.C. 

3 1395w–28(b)(6)(A)), a quality rating 

4 under 1853(n)(4) of such Act (42 U.S.C. 

5 1395w–23(n)(4)) equal to or higher than 

6 the national average for special needs 

7 plans (excluding Institutional-Special needs 

8 plans) based on the most recent data avail9 able for such year; and 

10 (ii) at least 20 percent of the popu11 lation to whom the plan is offered consists 

12 of subsidy eligible individuals (as defined 

13 in section 1860D–14(a)(3)(A) of the Social 

14 Security Act (42 U.S.C. 1395w– 

15 114(a)(3)(A))). 

16 (4) DISCLOSURE TO BENEFICIARIES.—The Sec17 retary shall provide to each individual eligible to en18 roll under a Medicare Advantage plan approved to 

19 participate under the demonstration program during 

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

21 (A) notification that the plan is partici22 pating in such demonstration program; 

23 (B) background information on the dem24 onstration program; 


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1 (C) clinical data derived from the studies 

2 resulting from the demonstration program; and 

3 (D) notification of the potential benefits 

4 that the individual will receive, and of the other 

5 potential impacts that the individual will experi6 ence, on account of the participation of the plan 

7 in the demonstration program. 

8 (c) VALUE-BASED INSURANCE DESIGN METHODOLO9 GIES.— 

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

11 the term ‘‘value-based insurance design method12 ology’’ means a methodology for identifying specific 

13 prescription medications, and clinical services that 

14 are payable under title XVIII of the Social Security 

15 Act, for which copayments, coinsurance, or both, 

16 would improve the management of specific chronic 

17 clinical conditions because of the high value and ef18 fectiveness of such medications and services for such 

19 specific chronic clinical conditions, as approved by 

20 the Secretary. 

21 (2) USE OF METHODOLOGIES TO REDUCE CO22 PAYMENTS AND COINSURANCE.—A Medicare Advan23 tage organization offering an eligible Medicare Ad24 vantage plan approved to participate under the dem25 onstration program, for each plan year for which the 


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1 plan is so selected and using value-based insurance 

2 design methodologies— 

3 (A) shall identify each prescription medica4 tion and clinical service covered under such 

5 plan for which the plan proposes to reduce or 

6 eliminate the copayment or coinsurance, with 

7 respect to the management of specific chronic 

8 clinical conditions (as specified by the Sec9 retary) of Medicare Advantage eligible individ10 uals (as defined in section 1851(a)(3) of the 

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

12 21(a)(3))) enrolled under such plans, for such 

13 plan year; 

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

15 eliminate copayments, coinsurance, or both for 

16 such prescription medication and clinical serv17 ices so identified with respect to the manage18 ment of such conditions of such individuals— 

19 (i) if such reduction or elimination is 

20 evidence-based and for the purpose of en21 couraging such individuals in such plan to 

22 use such prescription medications and clin23 ical services (such as preventive care, pri24 mary care, specialty visits, diagnostic tests, 


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1 procedures, and durable medical equip2 ment) with respect to such conditions; and 

3 (ii) for the purpose of encouraging 

4 such individuals in such plan to use health 

5 care providers that such organization has 

6 identified with respect to such plan year as 

7 being high value providers; and 

8 (C) if a reduction or elimination is applied 

9 pursuant to subparagraph (B), with respect to 

10 such medication and clinical services, shall, for 

11 such plan year, count toward the deductible ap12 plicable to such individual under such plan 

13 amounts that would have been payable by the 

14 individual as copayment or coinsurance for such 

15 medication and services if the reduction or 

16 elimination had not been applied. 

17 (3) PROHIBITION OF INCREASES OF COPAY18 MENTS AND COINSURANCE.—In no case may any 

19 Medicare Advantage plan participating in the dem20 onstration program increase, for any plan year for 

21 which the plan is so participating, the amount of co22 payments or coinsurance for any item or service cov23 ered under such plan for purposes of discouraging 

24 the use of such item or service. 

25 (d) REPORT ON IMPLEMENTATION.— 


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

2 the date on which the demonstration program under 

3 this section begins under subsection (b)(2), the Sec4 retary shall submit to Congress a report on the sta5 tus of the implementation of the demonstration pro6 gram. 

7 (2) ELEMENTS.—The report required by para8 graph (1) shall, with respect to eligible Medicare Ad9 vantage plans participating in the demonstration 

10 program for the first plan year of such program, in11 clude the following: 

12 (A) A list of each medication and service 

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

14 such plan with respect to such plan year. 

15 (B) For each such medication or service so 

16 identified, the amount of the copayment or co17 insurance required under such plan with respect 

18 to such plan year for such medication or service 

19 and the amount of the reduction of such copay20 ment or coinsurance from a previous plan year. 

21 (C) For each provider identified pursuant 

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

23 respect to such plan year, a statement of the 

24 amount of the copayment or coinsurance re25 quired under such plan with respect to such 


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1 plan year and the amount of the reduction of 

2 such copayment or coinsurance from the pre3 vious plan year. 

4 (e) REVIEW AND ASSESSMENT OF UTILIZATION OF

5 VALUE-BASED INSURANCE DESIGN METHODOLOGIES.— 

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

7 into a contract or agreement with an independent 

8 entity to review and assess the implementation of 

9 the demonstration program under this section. The 

10 review and assessment shall include the following: 

11 (A) An assessment of the utilization of 

12 value-based insurance design methodologies by 

13 Medicare Advantage plans participating under 

14 such program. 

15 (B) An analysis of whether reducing or 

16 eliminating the copayment or coinsurance for 

17 each medication and clinical service identified 

18 pursuant to subsection (c)(2)(A) resulted in in19 creased adherence to medication regimens, in20 creased service utilization, improvement in qual21 ity metrics, better health outcomes, and en22 hanced beneficiary experience. 

23 (C) An analysis of the extent to which 

24 costs to Medicare Advantage plans under part 

25 C of title XVIII of the Social Security Act parVerDate Sep 11 2014 02:13 May 30, 2015 Jkt 049200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H2581.IH H2581

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1 ticipating in the demonstration program is less 

2 than costs to Medicare Advantage plans under 

3 such part that are not participating in the dem4 onstration program. 

5 (D) An analysis of whether reducing or 

6 eliminating the copayment or coinsurance for 

7 providers identified pursuant to subsection 

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

9 metrics, better health outcomes, and enhanced 

10 beneficiary experience. 

11 (E) An analysis, for each provider so iden12 tified, the extent to which costs to Medicare Ad13 vantage plans under part C of title XVIII of the 

14 Social Security Act participating in the dem15 onstration program is less than costs to Medi16 care Advantage plans under such part that are 

17 not participating in the demonstration program. 

18 (F) Such other matters as the Secretary 

19 considers appropriate. 

20 (2) REPORT.—The contract or agreement en21 tered into under paragraph (1) shall require such 

22 entity to submit to the Secretary a report on the re23 view and assessment conducted by the entity under 

24 such paragraph in time for the inclusion of the re25 sults of such report in the report required by paraVerDate Sep 11 2014 02:13 May 30, 2015 Jkt 049200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H2581.IH H2581

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1 graph (3). Such report shall include a description, in 

2 clear language, of the manner in which the entity 

3 conducted the review and assessment. 

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

5 years after the date on which the demonstration pro6 gram begins under subsection (b)(2), the Secretary 

7 shall submit to Congress a report on the review and 

8 assessment of the demonstration program conducted 

9 under this subsection. The report shall include the 

10 following: 

11 (A) A description of the results of the re12 view and assessment included in the report sub13 mitted pursuant to paragraph (2). 

14 (B) Such recommendations as the Sec15 retary considers appropriate for enhancing the 

16 utilization of the methodologies applied under 

17 the demonstration program to all Medicare Ad18 vantage plans under part C of title XVIII of the 

19 Social Security Act so as to reduce copayments 

20 and coinsurance under such plans paid by 

21 Medicare beneficiaries for high-value prescrip22 tion medications and clinical services for which 

23 coverage is provided under such plans and to 

24 otherwise improve the quality of health care 

25 provided under such plans. 


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1 (4) OVERSIGHT REPORT.—Not later than three 

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

3 Comptroller General of the United States shall sub4 mit to Congress a report on the demonstration pro5 gram that includes an assessment, with respect to 

6 individuals enrolled under Medicare Advantage plans 

7 approved to participate under the demonstration 

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

9 and geographic regions of such individuals had upon 

10 the implementation of the demonstration program by 

11 the plans with respect to such individuals. 

12 (f) SAVINGS.—In no case may any reduction in bene13 ficiary copayments or coinsurance resulting from the im14 plementation of the demonstration program under this 

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

16 of the title XVIII of the Social Security Act that are great17 er than such expenditures without application of this sec18 tion. 

19 (g) EXPANSION OF DEMONSTRATION PROGRAM.— 

20 Taking into account the review and assessment conducted 

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

22 and comment rulemaking, expand (including implementa23 tion on a nationwide basis) the duration and scope of the 

24 demonstration program under title XVIII of the Social Se25 curity Act, other than under the original Medicare fee-forVerDate Sep 11 2014 02:13 May 30, 2015 Jkt 049200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H2581.IH H2581

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1 service program under parts A and B of such title, to the 

2 extent determined appropriate by the Secretary, if the re3 quirements of paragraphs (1), (2) and (3) of subsection 

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

5 1315a), as applied to the testing of a model under sub6 section (b) of such section, applied to the demonstration 

7 under this section. 

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

9 such provisions of titles XI and XVIII of the Social Secu10 rity Act as may be necessary to carry out the demonstra11 tion program under this section. 

12 (i) IMPLEMENTATION FUNDING.—For purposes of 

13 carrying out the demonstration program under this sec14 tion, the Secretary shall provide for the transfer from the 

15 Federal Hospital Insurance Trust Fund under section 

16 1817 of the Social Security Act (42 U.S.C. 1395i) and 

17 the Federal Supplementary Insurance Trust Fund under 

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

19 including the Medicare Prescription Drug Account in such 

20 Trust Fund, in such proportion as determined appropriate 

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

22 SEC. 2. PRESERVATION OF MEDICARE BENEFICIARY 

23 CHOICE UNDER MEDICARE ADVANTAGE. 

24 Section 1851(e)(2) of the Social Security Act (42 

25 U.S.C. 1395w–21(e)(2)) is amended— 


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1 (1) in subparagraph (C)— 

2 (A) in the heading, by inserting ‘‘FROM

3 2011 THROUGH 2015’’ after ‘‘45-DAY PERIOD’’; 

4 and 

5 (B) by inserting ‘‘and ending with 2015’’ 

6 after ‘‘beginning with 2011’’; and 

7 (2) by adding at the end the following new sub8 paragraph: 

9 ‘‘(G) CONTINUOUS OPEN ENROLLMENT

10 AND DISENROLLMENT FOR FIRST 3 MONTHS IN

11 2016 AND SUBSEQUENT YEARS.— 

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

13 (ii) and subparagraph (D), at any time 

14 during the first 3 months of a year (begin15 ning with 2016), or, if the individual first 

16 becomes a Medicare Advantage eligible in17 dividual during a year (beginning with 

18 2016), during the first 3 months of such 

19 year in which the individual is a Medicare 

20 Advantage eligible individual, a Medicare 

21 Advantage eligible individual may change 

22 the election under subsection (a)(1). 

23 ‘‘(ii) LIMITATION OF ONE CHANGE

24 DURING OPEN ENROLLMENT PERIOD EACH

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1 tion pursuant to clause (i) only once dur2 ing the applicable 3-month period de3 scribed in such clause in each year. The 

4 limitation under this clause shall not apply 

5 to changes in elections effected during an 

6 annual, coordinated election period under 

7 paragraph (3) or during a special enroll8 ment period under paragraph (4). 

9 ‘‘(iii) LIMITED APPLICATION TO PART

10 D.—Clauses (i) and (ii) of this subpara11 graph shall only apply with respect to 

12 changes in enrollment in a prescription 

13 drug plan under part D in the case of an 

14 individual who, previous to such change in 

15 enrollment, is enrolled in a Medicare Ad16 vantage plan. 

17 ‘‘(iv) LIMITATIONS ON MARKETING.— 

18 Pursuant to subsection (j), no unsolicited 

19 marketing or marketing materials may be 

20 sent to an individual described in clause (i) 

21 during the continuous open enrollment and 

22 disenrollment period established for the in23 dividual under such clause.’’. 


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1 SEC. 3. TREATMENT OF INFUSION DRUGS FURNISHED 

2 THROUGH DURABLE MEDICAL EQUIPMENT. 

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

4 U.S.C. 1395u(o)(1)) is amended— 

5 (1) in subparagraph (C), by inserting ‘‘(and in6 cluding a drug or biological described in subpara7 graph (D)(i) furnished on or after January 1, 

8 2017)’’ after ‘‘2005’’; and 

9 (2) in subparagraph (D)— 

10 (A) by striking ‘‘infusion drugs’’ and in11 serting ‘‘infusion drugs or biologicals’’ each 

12 place it appears; and 

13 (B) in clause (i)— 

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

15 ‘‘2004, and before January 1, 2017’’; and 

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

Æ 


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