1808 
a multi-year period of between 3 and 5 
years. 
‘‘(2) 
WAIVER.—The 
Secretary 
may 
waive such provisions of this title (in-
cluding section 1877) and title XI in the 
manner the Secretary determines nec-
essary in order implement the pilot pro-
gram. 
‘‘(3) PERFORMANCE RESULTS REPORTS.— 
The Secretary shall report performance 
results to qualifying ACOs under the 
pilot program at least annually. 
‘‘(4) LIMITATIONS
ON
REVIEW.—There 
shall be no administrative or judicial re-
view under section 1869, section 1878, or 
otherwise of— 
‘‘(A) the elements, parameters, 
scope, and duration of the pilot pro-
gram; 
‘‘(B) the selection of qualifying 
ACOs for the pilot program; 
‘‘(C) the establishment of targets, 
measurement of performance, deter-
minations with respect to whether 
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savings have been achieved and the 
amount of savings; 
‘‘(D) 
determinations 
regarding 
whether, to whom, and in what 
amounts incentive payments are paid; 
and 
‘‘(E) decisions about the extension 
of the program under subsection (g), 
expansion of the program under sub-
section (h) or extensions under sub-
section (i). 
‘‘(5) ADMINISTRATION.—Chapter 35 of 
title 44, United States Code shall not 
apply to this section. 
‘‘(f) EVALUATION; MONITORING.— 
‘‘(1) IN GENERAL.—The Secretary shall 
evaluate the payment incentive model for 
each qualifying ACO under the pilot pro-
gram to assess impacts on beneficiaries, 
providers of services, suppliers and the 
program under this title. The Secretary 
shall 
make 
such 
evaluation 
publicly 
available within 60 days of the date of 
completion of such report. 
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‘‘(2) MONITORING.—The Inspector Gen-
eral of the Department of Health and 
Human Services shall provide for moni-
toring of the operation of ACOs under the 
pilot program with regard to violations of 
section 1877 (popularly known as the 
‘Stark law’). 
‘‘(g) EXTENSION OF PILOT AGREEMENT WITH 
SUCCESSFUL ORGANIZATIONS.— 
‘‘(1) REPORTS TO CONGRESS.—Not later 
than 2 years after the date the first 
agreement is entered into under this sec-
tion, and biennially thereafter for six 
years, the Secretary shall submit to Con-
gress and make publicly available a re-
port on the use of authorities under the 
pilot program. Each report shall address 
the impact of the use of those authorities 
on expenditures, access, and quality 
under this title. 
‘‘(2) EXTENSION.—Subject to the report 
provided under paragraph (1), with re-
spect to a qualifying ACO, the Secretary 
may extend the duration of the agree-
ment for such ACO under the pilot pro-
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gram as the Secretary determines appro-
priate if— 
‘‘(A) the ACO receives incentive 
payments with respect to any of the 
first 4 years of the pilot agreement 
and is consistently meeting quality 
standards or 
‘‘(B) the ACO is consistently ex-
ceeding quality standards and is not 
increasing spending under the pro-
gram. 
‘‘(3) TERMINATION.—The Secretary may 
terminate an agreement with a qualifying 
ACO under the pilot program if such ACO 
did not receive incentive payments or 
consistently failed to meet quality stand-
ards in any of the first 3 years under the 
program. 
‘‘(h) EXPANSION TO ADDITIONAL ACOS.— 
‘‘(1) TESTING AND REFINEMENT OF PAY-
MENT
INCENTIVE
MODELS.—Subject to the 
evaluation described in subsection (f), the 
Secretary may enter into agreements 
under the pilot program with additional 
qualifying ACOs to further test and re-
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fine payment incentive models with re-
spect to qualifying ACOs. 
‘‘(2) EXPANDING
USE
OF
SUCCESSFUL 
MODELS TO PROGRAM IMPLEMENTATION.— 
‘‘(A) IN GENERAL.—Subject to sub-
paragraph (B), the Secretary may 
issue regulations to implement, on a 
permanent basis, 1 or more models if, 
and to the extent that, such models 
are beneficial to the program under 
this title, as determined by the Sec-
retary. 
‘‘(B) 
CERTIFICATION.—The 
Chief 
Actuary of the Centers for Medicare 
& Medicaid Services shall certify that 
1 or more of such models described in 
subparagraph (A) would result in es-
timated spending that would be less 
than what spending would otherwise 
be estimated to be in the absence of 
such expansion. 
‘‘(i) TREATMENT OF PHYSICIAN GROUP PRAC-
TICE DEMONSTRATION.— 
‘‘(1) EXTENSION.—The Secretary may 
enter in to an agreement with a quali-
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fying 
ACO 
under 
the 
demonstration 
under section 1866A, subject to rebasing 
and other modifications deemed appro-
priate by the Secretary, until the pilot 
program under this section is oper-
ational. 
‘‘(2) TRANSITION.—For purposes of ex-
tension of an agreement with a qualifying 
ACO under subsection (g)(2), the Sec-
retary shall treat receipt of an incentive 
payment for a year by an organization 
under the physician group practice dem-
onstration pursuant to section 1866A as a 
year for which an incentive payment is 
made under such subsection, as long as 
such practice group practice organiza-
tion meets the criteria under subsection 
(b)(2). 
‘‘(j) ADDITIONAL PROVISIONS.— 
‘‘(1) AUTHORITY
FOR
SEPARATE
INCEN-
TIVE ARRANGEMENTS.—The Secretary may 
create separate incentive arrangements 
(including using multiple years of data, 
varying thresholds, varying shared sav-
ings amounts, and varying shared savings 
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limits) for different categories of quali-
fying ACOs to reflect natural variations 
in data availability, variation in average 
annual attributable expenditures, pro-
gram integrity, and other matters the 
Secretary deems appropriate. 
‘‘(2) ENCOURAGEMENT OF PARTICIPATION 
OF
SMALLER
ORGANIZATIONS.—In order to 
encourage the participation of smaller 
accountable care organizations under the 
pilot program, the Secretary may limit a 
qualifying ACO’s exposure to high cost 
patients under the program. 
‘‘(3) INVOLVEMENT IN PRIVATE PAYER AR-
RANGEMENTS.—Nothing 
in 
this 
section 
shall be construed as preventing quali-
fying ACOs participating in the pilot pro-
gram from negotiating similar contracts 
with private payers. 
‘‘(4) ANTIDISCRIMINATION LIMITATION.— 
The Secretary shall not enter into an 
agreement with an entity to provide 
health care items or services under the 
pilot program, or with an entity to ad-
minister the program, unless such entity 
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guarantees that it will not deny, limit, or 
condition the coverage or provision of 
benefits under the program, for individ-
uals eligible to be enrolled under such 
program, based on any health status-re-
lated 
factor 
described 
in 
section 
2702(a)(1) of the Public Health Service 
Act. 
‘‘(5) CONSTRUCTION.—Nothing in this 
section shall be construed to compel or 
require an organization to use an organi-
zation-specific target growth rate for an 
accountable care organization under this 
section for purposes of section 1848. 
‘‘(6) FUNDING.—For purposes of ad-
ministering and carrying out the pilot 
program, other than for payments for 
items and services furnished under this 
title and incentive payments under sub-
section (c)(1), in addition to funds other-
wise 
appropriated, 
there 
are 
appro-
priated to the Secretary for the Center 
for Medicare & Medicaid Services Pro-
gram Management Account $25,000,000 
for each of fiscal years 2010 through 2014 
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and $20,000,000 for fiscal year 2015. 
Amounts appropriated under this para-
graph for a fiscal year shall be available 
until expended.’’. 
SEC. 1302. MEDICAL HOME PILOT PROGRAM. 
(a) IN GENERAL.—Title XVIII of the Social 
Security Act is amended by inserting after 
section 1866E, as inserted by section 1301, the 
following new section: 
‘‘MEDICAL HOME PILOT PROGRAM 
‘‘SEC. 1866F. (a) ESTABLISHMENT AND MED-
ICAL HOME MODELS.— 
‘‘(1) ESTABLISHMENT
OF
PILOT
PRO-
GRAM.—The Secretary shall establish a 
medical home pilot program (in this sec-
tion referred to as the ‘pilot program’) for 
the purpose of evaluating the feasibility 
and advisability of reimbursing qualified 
patient-centered medical homes for fur-
nishing medical home services (as de-
fined under subsection (b)(1)) to high 
need beneficiaries (as defined in sub-
section (d)(1)(C)) and to targeted high 
need beneficiaries (as defined in sub-
section (c)(1)(C)). 
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‘‘(2) SCOPE.—Subject to subsection (g), 
the pilot program shall include urban, 
rural, and underserved areas. 
‘‘(3) MODELS OF MEDICAL HOMES IN THE 
PILOT PROGRAM.—The pilot program shall 
evaluate each of the following medical 
home models: 
‘‘(A) 
INDEPENDENT
PATIENT-CEN-
TERED
MEDICAL
HOME
MODEL.—Inde-
pendent 
patient-centered 
medical 
home model under subsection (c). 
‘‘(B) 
COMMUNITY-BASED
MEDICAL 
HOME MODEL.—Community-based med-
ical home model under subsection (d). 
‘‘(4) PARTICIPATION
OF
NURSE
PRACTI-
TIONERS AND PHYSICIAN ASSISTANTS.— 
‘‘(A) Nothing in this section shall 
be construed as preventing a nurse 
practitioner from leading a patient 
centered medical home so long as— 
‘‘(i) all the requirements of 
this section are met; and 
‘‘(ii) the nurse practitioner is 
acting 
consistently 
with 
State 
law. 
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‘‘(B) Nothing in this section shall 
be construed as preventing a physi-
cian assistant from participating in a 
patient centered medical home so 
long as— 
‘‘(i) all the requirements of 
this section are met; and 
‘‘(ii) the physician assistant is 
acting 
consistently 
with 
State 
law. 
‘‘(b) DEFINITIONS.—For purposes of this 
section: 
‘‘(1) PATIENT-CENTERED MEDICAL HOME 
SERVICES.—The 
term 
‘patient-centered 
medical home services’ means services 
that— 
‘‘(A) provide beneficiaries with di-
rect and ongoing access to a primary 
care or principal care by a physician 
or nurse practitioner who accepts re-
sponsibility for providing first con-
tact, continuous and comprehensive 
care to such beneficiary; 
‘‘(B) coordinate the care provided 
to a beneficiary by a team of individ-
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uals at the practice level across of-
fice, institutional and home settings 
led by a primary care or principal 
care physician or nurse practitioner, 
as needed and appropriate; 
‘‘(C) provide for all the patient’s 
health care needs or take responsi-
bility 
for 
appropriately 
arranging 
care with other qualified providers 
for all stages of life; 
‘‘(D) provide continuous access to 
care and communication with partici-
pating beneficiaries; 
‘‘(E) provide support for patient 
self-management, proactive and reg-
ular patient monitoring, support for 
family caregivers, use patient-cen-
tered 
processes, 
and 
coordination 
with community resources; 
‘‘(F) integrate readily accessible, 
clinically useful information on par-
ticipating patients that enables the 
practice to treat such patients com-
prehensively and systematically; and 
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‘‘(G) 
implement 
evidence-based 
guidelines and apply such guidelines 
to the identified needs of bene-
ficiaries over time and with the inten-
sity needed by such beneficiaries. 
‘‘(2) PRIMARY
CARE.—The term ‘pri-
mary care’ means health care that is pro-
vided by a physician, nurse practitioner, 
or physician assistant who practices in 
the field of family medicine, general in-
ternal medicine, geriatric medicine, or 
pediatric medicine. 
‘‘(3) PRINCIPAL CARE.—The term ‘prin-
cipal care’ means integrated, accessible 
health care that is provided by a physi-
cian who is a medical subspecialist that 
addresses the majority of the personal 
health care needs of patients with chron-
ic conditions requiring the subspecialist’s 
expertise, and for whom the subspecialist 
assumes care management. 
‘‘(c) INDEPENDENT PATIENT-CENTERED MED-
ICAL HOME MODEL.— 
‘‘(1) IN GENERAL.— 
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‘‘(A) PAYMENT
AUTHORITY.—Under 
the 
independent 
patient-centered 
medical home model under this sub-
section, the Secretary shall make pay-
ments for medical home services fur-
nished by an independent patient- 
centered medical home (as defined in 
subparagraph (B)) pursuant to para-
graph (3)(B) for a targeted high need 
beneficiaries (as defined in subpara-
graph (C)). 
‘‘(B) 
INDEPENDENT
PATIENT-CEN-
TERED MEDICAL HOME DEFINED.—In this 
section, the term ‘independent pa-
tient-centered medical home’ means a 
physician-directed 
or 
nurse-practi-
tioner-directed practice that is quali-
fied under paragraph (2) as— 
‘‘(i) 
providing 
beneficiaries 
with 
patient-centered 
medical 
home services; and 
‘‘(ii) meets such other require-
ments as the Secretary may speci-
fy. 
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‘‘(C) TARGETED
HIGH
NEED
BENE-
FICIARY
DEFINED.—For 
purposes 
of 
this subsection, the term ‘targeted 
high need beneficiary’ means a high 
need beneficiary who, based on a risk 
score as specified by the Secretary, is 
generally within the upper 50th per-
centile of Medicare beneficiaries. 
‘‘(D) BENEFICIARY ELECTION TO PAR-
TICIPATE.—The Secretary shall deter-
mine an appropriate method of ensur-
ing that beneficiaries have agreed to 
participate in the pilot program. 
‘‘(E) IMPLEMENTATION.—The pilot 
program under this subsection shall 
begin no later than 6 months after 
the date of the enactment of this sec-
tion. 
‘‘(2) STANDARD SETTING AND QUALIFICA-
TION PROCESS FOR PATIENT-CENTERED MED-
ICAL HOMES.—The Secretary shall review 
alternative models for standard setting 
and qualification, and shall establish a 
process— 
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‘‘(A) to establish standards to en-
able medical practices to qualify as 
patient-centered medical homes; and 
‘‘(B) to initially provide for the re-
view and certification of medical 
practices as meeting such standards. 
‘‘(3) PAYMENT.— 
‘‘(A) ESTABLISHMENT
OF
METHOD-
OLOGY.—The Secretary shall establish 
a methodology for the payment for 
medical home services furnished by 
independent patient-centered medical 
homes. Under such methodology, the 
Secretary shall adjust payments to 
medical homes based on beneficiary 
risk scores to ensure that higher pay-
ments are made for higher risk bene-
ficiaries. 
‘‘(B) PER BENEFICIARY PER MONTH 
PAYMENTS.—Under 
such 
payment 
methodology, the Secretary shall pay 
independent patient-centered medical 
homes a monthly fee for each tar-
geted high need beneficiary who con-
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sents to receive medical home serv-
ices through such medical home. 
‘‘(C) PROSPECTIVE
PAYMENT.—The 
fee under subparagraph (B) shall be 
paid on a prospective basis. 
‘‘(D) AMOUNT OF PAYMENT.—In de-
termining the amount of such fee, the 
Secretary 
shall 
consider 
the 
fol-
lowing: 
‘‘(i) The clinical work and 
practice expenses involved in pro-
viding the medical home services 
provided by the independent pa-
tient-centered 
medical 
home 
(such as providing increased ac-
cess, 
care 
coordination, 
popu-
lation disease management, and 
teaching self-care skills for man-
aging chronic illnesses) for which 
payment is not made under this 
title as of the date of the enact-
ment of this section. 
‘‘(ii) Allow for differential pay-
ments based on capabilities of the 
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independent 
patient-centered 
medical home. 
‘‘(iii) Use appropriate risk-ad-
justment 
in 
determining 
the 
amount of the per beneficiary per 
month payment under this para-
graph in a manner that ensures 
that higher payments are made 
for higher risk beneficiaries. 
‘‘(4) ENCOURAGING
PARTICIPATION
OF 
VARIETY OF PRACTICES.—The pilot program 
under this subsection shall be designed 
to include the participation of physicians 
in practices with fewer than 10 full-time 
equivalent physicians, as well as physi-
cians in larger practices, particularly in 
underserved and rural areas, as well as 
federally qualified community health cen-
ters, and rural health centers. 
‘‘(5) NO DUPLICATION IN PILOT PARTICI-
PATION.—A physician in a group practice 
that participates in the accountable care 
organization pilot program under section 
1866D shall not be eligible to participate 
in the pilot program under this sub-
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