I 

115TH CONGRESS 

2D SESSION H. R. 7177 

To amend title III of the Public Health Service Act and titles XI and 

XVIII of the Social Security Act to accelerate the adoption of valuebased payment and delivery arrangements among health care stakeholders intended to coordinate care, improve patient outcomes, share 

accountability, or lower costs, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

NOVEMBER 27, 2018 

Mr. PAULSEN introduced the following bill; which was referred to the Committee on Energy and Commerce, and in addition to the Committee on 

Ways and Means, 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 III of the Public Health Service Act and 

titles XI and XVIII of the Social Security Act to accelerate the adoption of value-based payment and delivery 

arrangements among health care stakeholders intended 

to coordinate care, improve patient outcomes, share accountability, or lower costs, 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, 


pamtmann on DSKBFK8HB2PROD with BILLS
2 

•HR 7177 IH

1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Shared Accountability 

3 for Improved Patient Outcomes Act of 2018’’. 

4 SEC. 2. VALUE-BASED ARRANGEMENTS. 

5 Subpart I of part S of title III of the Public Health 

6 Service Act (42 U.S.C. 280j et seq.) is amended by adding 

7 at the end the following new section: 

8 ‘‘SEC. 399KK–1. EDUCATIONAL CAMPAIGNS TO ENCOURAGE 

9 VALUE-BASED HEALTH CARE DELIVERY AND 

10 QUALITY IMPROVEMENT. 

11 ‘‘(a) IN GENERAL.—Beginning not later than Janu12 ary 1, 2019, the Secretary shall conduct annual education 

13 campaigns targeted to health care providers and payers 

14 to encourage the development of value-based arrange15 ments (as defined in section 1128B(b)(5)(B) of the Social 

16 Security Act) that are designed to meet one or more of 

17 the following goals: 

18 ‘‘(1) Promotion of accountability with respect to 

19 quality, cost, coordination, and overall care of pa20 tient populations, including patient populations that 

21 receive services which are reimbursed by various 

22 health care payers. 

23 ‘‘(2) Improvement of management and coordi24 nation of care for patients through such arrange25 ments approved by the parties to the arrangement. 


pamtmann on DSKBFK8HB2PROD with BILLS
3 

•HR 7177 IH

1 ‘‘(3) Encouragement of investment in health 

2 care infrastructure and redesigned care processes for 

3 high-quality and efficient service delivery for pa4 tients, including individuals entitled to benefits 

5 under part A of title XVIII of the Social Security 

6 Act or enrolled under part B of such title, such as 

7 appropriate reduction of costs or growth in expendi8 tures for items and services provided to patients, 

9 consistent with quality of care, physician medical 

10 judgment, and patient freedom of choice. 

11 ‘‘(b) AUTHORIZATION OF APPROPRIATIONS.—There 

12 are authorized to be appropriated to carry out this section 

13 such sums as may be necessary for each of fiscal years 

14 2019 through 2023.’’. 

15 SEC. 3. ANTIKICKBACK EXCEPTION FOR VALUE-BASED AR16 RANGEMENTS. 

17 (a) IN GENERAL.—Section 1128B(b) of the Social 

18 Security Act (42 U.S.C. 1320a–7b(b)) is amended by add19 ing at the end the following new paragraph: 

20 ‘‘(5)(A) Paragraphs (1) and (2) shall not apply to 

21 any remuneration exchanged under a value-based arrange22 ment (as defined in subparagraph (B)) directly or indi23 rectly between, among, or on behalf of one or more parties 

24 paid under such arrangement. 


pamtmann on DSKBFK8HB2PROD with BILLS
4 

•HR 7177 IH

1 ‘‘(B) For purposes of this paragraph, the term ‘value2 based arrangement’ means an arrangement that meets the 

3 following criteria: 

4 ‘‘(i) The arrangement is set out in writing in 

5 advance of the execution of the arrangement and 

6 specifies the health care items and services covered 

7 by the arrangement. 

8 ‘‘(ii) The arrangement is reasonably related to 

9 one or more of the goals described in section 

10 399KK–1(a) of the Public Health Service Act. 

11 ‘‘(iii) The arrangement— 

12 ‘‘(I) is a value-based risk-sharing trans13 action (as defined in subparagraph (C)); 

14 ‘‘(II) provides for payment for items and 

15 services furnished under the arrangement be16 tween, among, or on behalf of one or more par17 ties participating in a value-based risk-sharing 

18 network arrangement (as defined in subpara19 graph (C)); or 

20 ‘‘(III) is another arrangement determined 

21 appropriate by the Secretary. 

22 ‘‘(C) In this paragraph: 

23 ‘‘(i) The term ‘financial risk’ means upside or 

24 downside risk such that each party is eligible or lia25 ble for payment through a specified methodology 


pamtmann on DSKBFK8HB2PROD with BILLS
5 

•HR 7177 IH

1 that may include shared savings, withholds, or bo2 nuses. 

3 ‘‘(ii) The term ‘value-based risk-sharing net4 work arrangement’ means an arrangement under 

5 which an entity is established between or organized 

6 and operated by two or more parties (which may in7 clude providers, suppliers, corporations, or individ8 uals)— 

9 ‘‘(I) to accept capitation payments with re10 spect to certain items and services furnished to 

11 an individual; 

12 ‘‘(II) to accept as payment for such items 

13 and services a predetermined percentage of the 

14 value-based risk-sharing network’s revenue 

15 under the arrangement; or 

16 ‘‘(III) to provide financial incentives to 

17 parties to the arrangement for purposes of 

18 achieving one or more of the goals described in 

19 section 399KK–1(a) of the Public Health Serv20 ice Act through the use of— 

21 ‘‘(aa) arrangements under which such 

22 parties agree to a withhold of a significant 

23 amount of the compensation due them, to 

24 be used to cover losses of the arrangement, 

25 to cover losses of other parties within the 


pamtmann on DSKBFK8HB2PROD with BILLS
6 

•HR 7177 IH

1 arrangement, to be returned to all parties 

2 to the arrangement if such parties meet 

3 their utilization management or cost-con4 tainment goals for a specified time period, 

5 or to be distributed among all parties if 

6 the arrangement meets its utilization man7 agement or cost-containment goals for a 

8 specified time period; 

9 ‘‘(bb) arrangements where such par10 ties agree to preestablished cost or utiliza11 tion targets and to subsequent significant 

12 financial rewards or penalties (which may 

13 include a reduction in payments to down14 stream providers or suppliers in the net15 work) based on the performance of all such 

16 parties with respect to such targets; or 

17 ‘‘(cc) other mechanisms that dem18 onstrate significant shared financial risk 

19 (as defined in clause (i)) or significantly 

20 assist such parties in meeting risk-sharing 

21 targets, including shared-savings pay22 ments, withholds, or bonuses. 

23 Remuneration to parties who participate in a value24 based risk-sharing network arrangement may be in25 kind or monetary payments, which may but are not 


pamtmann on DSKBFK8HB2PROD with BILLS
7 

•HR 7177 IH

1 required to place the parties to such arrangement at 

2 financial risk (as defined in clause (i)). 

3 ‘‘(iii) The term ‘value-based risk-sharing trans4 action’ means a payment made under an arrange5 ment under which each party agrees— 

6 ‘‘(I) to contribute to the achievement of 

7 preidentified clinical or economic target metrics 

8 that are specifically tailored to improve patient 

9 outcomes or reduce the costs of health care de10 livery without negatively affecting patient out11 comes; 

12 ‘‘(II) to implement processes or procedures 

13 that otherwise optimize the delivery, efficiency, 

14 or quality of patient-centered care; and 

15 ‘‘(III) to predetermine the allocation of fi16 nancial risk (as defined in clause (i)) assumed 

17 by each party based on the participant’s relative 

18 contribution to the achievement of targeted out19 comes.’’. 

20 (b) EFFECTIVE DATE.—The amendment made by 

21 this section shall apply to arrangements entered into on 

22 or after the date of enactment of this Act. 


pamtmann on DSKBFK8HB2PROD with BILLS
8 

•HR 7177 IH

1 SEC. 4. STARK LAW EXCEPTION FOR VALUE-BASED AR2 RANGEMENTS. 

3 (a) Section 1877(e) of the Social Security Act (42 

4 U.S.C. 1395nn(e)) is amended by adding at the end the 

5 following new paragraphs: 

6 ‘‘(9) VALUE-BASED ARRANGEMENTS.—Remu7 neration to a physician (or an immediate family 

8 member of such physician) paid under a value-based 

9 arrangement (as defined in section 

10 1128B(b)(5)(B)).’’. 

11 (b) EFFECTIVE DATE.—The amendment made by 

12 this section shall apply with respect to arrangements en13 tered into on or after the date of enactment of this Act. 

Æ 


pamtmann on DSKBFK8HB2PROD with BILLS