I 

114TH CONGRESS 

1ST SESSION H. R. 2570 

To establish a demonstration program requiring the utilization of ValueBased 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. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 22, 2015 

Mrs. BLACK (for herself, Mr. BLUMENAUER, and Mrs. MCMORRIS RODGERS) 

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 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. 

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 for Better Care Act of 2015’’ or the ‘‘VBID for 

4 Better Care Act of 2015’’. 

5 SEC. 2. FINDINGS. 

6 Congress makes the following findings: 

7 (1) A growing body of evidence demonstrates 

8 that increases in patient-level financial barriers (in9 cluding deductibles, copayments, and coinsurance) 

10 for high-value medical services (such as prescription 

11 medications, clinician visits, diagnostic tests, and 

12 procedures) systematically reduce their use. Savings 

13 attributable to cost-related decreased utilization of 

14 specific services may lead to an increase in total 

15 medical expenditures due to increased use of other 

16 related clinical services, such as hospitalizations and 

17 emergency room visits. 

18 (2) Empirical research studies demonstrate that 

19 reductions in beneficiary out-of-pocket expenses for 

20 high-value prescription medications and clinical serv21 ices can mitigate the adverse health and financial 

22 consequences attributable to cost-related decreased 

23 utilization of high-value services. 

24 (3) Financial barriers to prescription medica25 tions and clinical services that are deemed to be 


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1 high-value should be reduced or eliminated to in2 crease their use. 

3 (4) Value-Based Insurance Design is a method4 ology that adjusts patient out-of-pocket costs for 

5 prescription medications and clinical services accord6 ing to the clinical value—not exclusively the cost. 

7 Value-Based Insurance Design is based on the con8 cept of clinical nuance that recognizes— 

9 (A) prescription medications and clinical 

10 services differ in the clinical benefit provided; 

11 and 

12 (B) the clinical benefit derived from a spe13 cific prescription medication or clinical service 

14 depends on the clinical situation, the provider, 

15 and where the care is delivered. 

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

17 coinsurance design for prescription medications and 

18 clinical services provided under the Medicare pro19 gram does not recognize the well-established value 

20 differences in health outcomes produced by various 

21 medical interventions. 

22 (6) The establishment by Medicare of copay23 ment and coinsurance requirements using Value24 Based Insurance Design methodologies will improve 

25 patient-centered health outcomes, enhance personal 


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1 responsibility, and afford a more efficient use of tax2 payer dollars. 

3 SEC. 3. DEMONSTRATION PROGRAM. 

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

5 Human Services (in this section referred to as the ‘‘Sec6 retary’’) shall establish a 3-year demonstration program 

7 to test the use of value-based insurance design methodolo8 gies (as defined in subsection (c)(1)) under eligible Medi9 care Advantage plans offered by Medicare Advantage or10 ganizations under part C of title XVIII of the Social Secu11 rity Act (42 U.S.C. 1395w–21 et seq.). 

12 (b) DEMONSTRATION PROGRAM DESIGN.— 

13 (1) SELECTION OF MEDICARE ADVANTAGE

14 SITES AND ELIGIBLE MEDICARE ADVANTAGE

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

16 the enactment of this Act, the Secretary shall— 

17 (A) select at least two Medicare Advantage 

18 sites with respect to which to conduct the dem19 onstration program under this section; and 

20 (B) approve eligible Medicare Advantage 

21 plans to participate in such demonstration pro22 gram. 

23 In selecting Medicare Advantage sites under sub24 paragraph (A), the Secretary shall take into account 

25 area differences as well as the availability of health 


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1 maintenance organization plans and preferred pro2 vider organization plans offered in such sites. 

3 (2) START OF DEMONSTRATION.—The dem4 onstration program shall begin not later than the 

5 third plan year beginning after the date of the en6 actment of this Act. 

7 (3) ELIGIBLE MEDICARE ADVANTAGE PLANS.— 

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

9 Medicare Advantage plan’’ means a Medicare Ad10 vantage plan under part C of title XVIII of the So11 cial Security Act (42 U.S.C. 1395w–21 et seq.) that 

12 meets the following requirements: 

13 (A) The plan is an Medicare Advantage re14 gional plan (as defined in paragraph (4) of sec15 tion 1859(b) of such Act (42 U.S.C. 1395w– 

16 28(b))) or Medicare Advantage local plan (as 

17 defined in paragraph (5) of such section) of18 fered in the Medicare Advantage region selected 

19 under paragraph (1)(A). 

20 (B) The plan has— 

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

22 1853(n)(4) of such Act (42 U.S.C. 1395w– 

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

24 most recent data available for such year, 

25 or 


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1 (II) in the case of a specialized Medi2 care Advantage plan for special needs indi3 viduals, as defined in section 

4 1859(b)(6)(A) of such Act (42 U.S.C. 

5 1395w–28(b)(6)(A)), a quality rating 

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

7 1395w–23(n)(4)) equal to or higher than 

8 the national average for special needs 

9 plans (excluding Institutional-Special needs 

10 plans) based on the most recent data avail11 able for such year; and 

12 (ii) at least 20 percent of the popu13 lation to whom the plan is offered consists 

14 of subsidy eligible individuals (as defined 

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

16 Security Act (42 U.S.C. 1395w– 

17 114(a)(3)(A))). 

18 (4) DISCLOSURE TO BENEFICIARIES.—The Sec19 retary shall provide to each individual eligible to en20 roll under a Medicare Advantage plan approved to 

21 participate under the demonstration program during 

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

23 (A) notification that the plan is partici24 pating in such demonstration program; 


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1 (B) background information on the dem2 onstration program; 

3 (C) clinical data derived from the studies 

4 resulting from the demonstration program; and 

5 (D) notification of the potential benefits 

6 that the individual will receive, and of the other 

7 potential impacts that the individual will experi8 ence, on account of the participation of the plan 

9 in the demonstration program. 

10 (c) VALUE-BASED INSURANCE DESIGN METHODOLO11 GIES.— 

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

13 the term ‘‘value-based insurance design method14 ology’’ means a methodology for identifying specific 

15 prescription medications, and clinical services that 

16 are payable under title XVIII of the Social Security 

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

18 would improve the management of specific chronic 

19 clinical conditions because of the high value and ef20 fectiveness of such medications and services for such 

21 specific chronic clinical conditions, as approved by 

22 the Secretary. 

23 (2) USE OF METHODOLOGIES TO REDUCE CO24 PAYMENTS AND COINSURANCE.—A Medicare Advan25 tage organization offering an eligible Medicare AdVerDate Sep 11 2014 00:48 May 30, 2015 Jkt 049200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H2570.IH H2570

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1 vantage plan approved to participate under the dem2 onstration program, for each plan year for which the 

3 plan is so selected and using value-based insurance 

4 design methodologies— 

5 (A) shall identify each prescription medica6 tion and clinical service covered under such 

7 plan for which the plan proposes to reduce or 

8 eliminate the copayment or coinsurance, with 

9 respect to the management of specific chronic 

10 clinical conditions (as specified by the Sec11 retary) of Medicare Advantage eligible individ12 uals (as defined in section 1851(a)(3) of the 

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

14 21(a)(3))) enrolled under such plans, for such 

15 plan year; 

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

17 eliminate copayments, coinsurance, or both for 

18 such prescription medication and clinical serv19 ices so identified with respect to the manage20 ment of such conditions of such individuals— 

21 (i) if such reduction or elimination is 

22 evidence-based and for the purpose of en23 couraging such individuals in such plan to 

24 use such prescription medications and clin25 ical services (such as preventive care, priVerDate Sep 11 2014 00:48 May 30, 2015 Jkt 049200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H2570.IH H2570

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1 mary care, specialty visits, diagnostic tests, 

2 procedures, and durable medical equip3 ment) with respect to such conditions; and 

4 (ii) for the purpose of encouraging 

5 such individuals in such plan to use health 

6 care providers that such organization has 

7 identified with respect to such plan year as 

8 being high value providers; and 

9 (C) if a reduction or elimination is applied 

10 pursuant to subparagraph (B), with respect to 

11 such medication and clinical services, shall, for 

12 such plan year, count toward the deductible ap13 plicable to such individual under such plan 

14 amounts that would have been payable by the 

15 individual as copayment or coinsurance for such 

16 medication and services if the reduction or 

17 elimination had not been applied. 

18 (3) PROHIBITION OF INCREASES OF COPAY19 MENTS AND COINSURANCE.—In no case may any 

20 Medicare Advantage plan participating in the dem21 onstration program increase, for any plan year for 

22 which the plan is so participating, the amount of co23 payments or coinsurance for any item or service cov24 ered under such plan for purposes of discouraging 

25 the use of such item or service. 


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1 (d) REPORT ON IMPLEMENTATION.— 

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

3 the date on which the demonstration program under 

4 this section begins under subsection (b)(2), the Sec5 retary shall submit to Congress a report on the sta6 tus of the implementation of the demonstration pro7 gram. 

8 (2) ELEMENTS.—The report required by para9 graph (1) shall, with respect to eligible Medicare Ad10 vantage plans participating in the demonstration 

11 program for the first plan year of such program, in12 clude the following: 

13 (A) A list of each medication and service 

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

15 such plan with respect to such plan year. 

16 (B) For each such medication or service so 

17 identified, the amount of the copayment or co18 insurance required under such plan with respect 

19 to such plan year for such medication or service 

20 and the amount of the reduction of such copay21 ment or coinsurance from a previous plan year. 

22 (C) For each provider identified pursuant 

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

24 respect to such plan year, a statement of the 

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1 quired under such plan with respect to such 

2 plan year and the amount of the reduction of 

3 such copayment or coinsurance from the pre4 vious plan year. 

5 (e) REVIEW AND ASSESSMENT OF UTILIZATION OF

6 VALUE-BASED INSURANCE DESIGN METHODOLOGIES.— 

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

8 into a contract or agreement with an independent 

9 entity to review and assess the implementation of 

10 the demonstration program under this section. The 

11 review and assessment shall include the following: 

12 (A) An assessment of the utilization of 

13 value-based insurance design methodologies by 

14 Medicare Advantage plans participating under 

15 such program. 

16 (B) An analysis of whether reducing or 

17 eliminating the copayment or coinsurance for 

18 each medication and clinical service identified 

19 pursuant to subsection (c)(2)(A) resulted in in20 creased adherence to medication regimens, in21 creased service utilization, improvement in qual22 ity metrics, better health outcomes, and en23 hanced beneficiary experience. 

24 (C) An analysis of the extent to which 

25 costs to Medicare Advantage plans under part 


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1 C of title XVIII of the Social Security Act par2 ticipating in the demonstration program is less 

3 than costs to Medicare Advantage plans under 

4 such part that are not participating in the dem5 onstration program. 

6 (D) An analysis of whether reducing or 

7 eliminating the copayment or coinsurance for 

8 providers identified pursuant to subsection 

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

10 metrics, better health outcomes, and enhanced 

11 beneficiary experience. 

12 (E) An analysis, for each provider so iden13 tified, the extent to which costs to Medicare Ad14 vantage plans under part C of title XVIII of the 

15 Social Security Act participating in the dem16 onstration program is less than costs to Medi17 care Advantage plans under such part that are 

18 not participating in the demonstration program. 

19 (F) Such other matters as the Secretary 

20 considers appropriate. 

21 (2) REPORT.—The contract or agreement en22 tered into under paragraph (1) shall require such 

23 entity to submit to the Secretary a report on the re24 view and assessment conducted by the entity under 

25 such paragraph in time for the inclusion of the reVerDate Sep 11 2014 00:48 May 30, 2015 Jkt 049200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H2570.IH H2570

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1 sults of such report in the report required by para2 graph (3). Such report shall include a description, in 

3 clear language, of the manner in which the entity 

4 conducted the review and assessment. 

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

6 years after the date on which the demonstration pro7 gram begins under subsection (b)(2), the Secretary 

8 shall submit to Congress a report on the review and 

9 assessment of the demonstration program conducted 

10 under this subsection. The report shall include the 

11 following: 

12 (A) A description of the results of the re13 view and assessment included in the report sub14 mitted pursuant to paragraph (2). 

15 (B) Such recommendations as the Sec16 retary considers appropriate for enhancing the 

17 utilization of the methodologies applied under 

18 the demonstration program to all Medicare Ad19 vantage plans under part C of title XVIII of the 

20 Social Security Act so as to reduce copayments 

21 and coinsurance under such plans paid by 

22 Medicare beneficiaries for high-value prescrip23 tion medications and clinical services for which 

24 coverage is provided under such plans and to 


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1 otherwise improve the quality of health care 

2 provided under such plans. 

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

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

5 Comptroller General of the United States shall sub6 mit to Congress a report on the demonstration pro7 gram that includes an assessment, with respect to 

8 individuals enrolled under Medicare Advantage plans 

9 approved to participate under the demonstration 

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

11 and geographic regions of such individuals had upon 

12 the implementation of the demonstration program by 

13 the plans with respect to such individuals. 

14 (f) SAVINGS.—In no case may any reduction in bene15 ficiary copayments or coinsurance resulting from the im16 plementation of the demonstration program under this 

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

18 of the title XVIII of the Social Security Act that are great19 er than such expenditures without application of this sec20 tion. 

21 (g) EXPANSION OF DEMONSTRATION PROGRAM.— 

22 Taking into account the review and assessment conducted 

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

24 and comment rulemaking, expand (including implementa25 tion on a nationwide basis) the duration and scope of the 


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1 demonstration program under title XVIII of the Social Se2 curity Act, other than under the original Medicare fee-for3 service program under parts A and B of such title, to the 

4 extent determined appropriate by the Secretary, if the re5 quirements of paragraphs (1), (2) and (3) of subsection 

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

7 1315a), as applied to the testing of a model under sub8 section (b) of such section, applied to the demonstration 

9 under this section. 

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

11 such provisions of titles XI and XVIII of the Social Secu12 rity Act as may be necessary to carry out the demonstra13 tion program under this section. 

14 (i) IMPLEMENTATION FUNDING.—For purposes of 

15 carrying out the demonstration program under this sec16 tion, the Secretary shall provide for the transfer from the 

17 Federal Hospital Insurance Trust Fund under section 

18 1817 of the Social Security Act (42 U.S.C. 1395i) and 

19 the Federal Supplementary Insurance Trust Fund under 

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

21 including the Medicare Prescription Drug Account in such 

22 Trust Fund, in such proportion as determined appropriate 

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

Æ 


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