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 value- 
based payment and delivery arrangements among health care stake-
holders 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 Com-
mittee 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 accel-
erate the adoption of value-based payment and delivery 
arrangements among health care stakeholders intended 
to coordinate care, improve patient outcomes, share ac-
countability, or lower costs, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
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SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Shared Accountability 
for Improved Patient Outcomes Act of 2018’’. 
SEC. 2. VALUE-BASED ARRANGEMENTS. 
Subpart I of part S of title III of the Public Health 
Service Act (42 U.S.C. 280j et seq.) is amended by adding 
at the end the following new section: 
‘‘SEC. 399KK–1. EDUCATIONAL CAMPAIGNS TO ENCOURAGE 
VALUE-BASED HEALTH CARE DELIVERY AND 
QUALITY IMPROVEMENT. 
‘‘(a) IN GENERAL.—Beginning not later than Janu-
ary 1, 2019, the Secretary shall conduct annual education 
campaigns targeted to health care providers and payers 
to encourage the development of value-based arrange-
ments (as defined in section 1128B(b)(5)(B) of the Social 
Security Act) that are designed to meet one or more of 
the following goals: 
‘‘(1) Promotion of accountability with respect to 
quality, cost, coordination, and overall care of pa-
tient populations, including patient populations that 
receive services which are reimbursed by various 
health care payers. 
‘‘(2) Improvement of management and coordi-
nation of care for patients through such arrange-
ments approved by the parties to the arrangement. 
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‘‘(3) Encouragement of investment in health 
care infrastructure and redesigned care processes for 
high-quality and efficient service delivery for pa-
tients, including individuals entitled to benefits 
under part A of title XVIII of the Social Security 
Act or enrolled under part B of such title, such as 
appropriate reduction of costs or growth in expendi-
tures for items and services provided to patients, 
consistent with quality of care, physician medical 
judgment, and patient freedom of choice. 
‘‘(b) AUTHORIZATION OF APPROPRIATIONS.—There 
are authorized to be appropriated to carry out this section 
such sums as may be necessary for each of fiscal years 
2019 through 2023.’’. 
SEC. 3. ANTIKICKBACK EXCEPTION FOR VALUE-BASED AR-
RANGEMENTS. 
(a) IN GENERAL.—Section 1128B(b) of the Social 
Security Act (42 U.S.C. 1320a–7b(b)) is amended by add-
ing at the end the following new paragraph: 
‘‘(5)(A) Paragraphs (1) and (2) shall not apply to 
any remuneration exchanged under a value-based arrange-
ment (as defined in subparagraph (B)) directly or indi-
rectly between, among, or on behalf of one or more parties 
paid under such arrangement. 
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‘‘(B) For purposes of this paragraph, the term ‘value- 
based arrangement’ means an arrangement that meets the 
following criteria: 
‘‘(i) The arrangement is set out in writing in 
advance of the execution of the arrangement and 
specifies the health care items and services covered 
by the arrangement. 
‘‘(ii) The arrangement is reasonably related to 
one or more of the goals described in section 
399KK–1(a) of the Public Health Service Act. 
‘‘(iii) The arrangement— 
‘‘(I) is a value-based risk-sharing trans-
action (as defined in subparagraph (C)); 
‘‘(II) provides for payment for items and 
services furnished under the arrangement be-
tween, among, or on behalf of one or more par-
ties participating in a value-based risk-sharing 
network arrangement (as defined in subpara-
graph (C)); or 
‘‘(III) is another arrangement determined 
appropriate by the Secretary. 
‘‘(C) In this paragraph: 
‘‘(i) The term ‘financial risk’ means upside or 
downside risk such that each party is eligible or lia-
ble for payment through a specified methodology 
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that may include shared savings, withholds, or bo-
nuses. 
‘‘(ii) The term ‘value-based risk-sharing net-
work arrangement’ means an arrangement under 
which an entity is established between or organized 
and operated by two or more parties (which may in-
clude providers, suppliers, corporations, or individ-
uals)— 
‘‘(I) to accept capitation payments with re-
spect to certain items and services furnished to 
an individual; 
‘‘(II) to accept as payment for such items 
and services a predetermined percentage of the 
value-based 
risk-sharing 
network’s 
revenue 
under the arrangement; or 
‘‘(III) to provide financial incentives to 
parties to the arrangement for purposes of 
achieving one or more of the goals described in 
section 399KK–1(a) of the Public Health Serv-
ice Act through the use of— 
‘‘(aa) arrangements under which such 
parties agree to a withhold of a significant 
amount of the compensation due them, to 
be used to cover losses of the arrangement, 
to cover losses of other parties within the 
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arrangement, to be returned to all parties 
to the arrangement if such parties meet 
their utilization management or cost-con-
tainment goals for a specified time period, 
or to be distributed among all parties if 
the arrangement meets its utilization man-
agement or cost-containment goals for a 
specified time period; 
‘‘(bb) arrangements where such par-
ties agree to preestablished cost or utiliza-
tion targets and to subsequent significant 
financial rewards or penalties (which may 
include a reduction in payments to down-
stream providers or suppliers in the net-
work) based on the performance of all such 
parties with respect to such targets; or 
‘‘(cc) other mechanisms that dem-
onstrate significant shared financial risk 
(as defined in clause (i)) or significantly 
assist such parties in meeting risk-sharing 
targets, 
including 
shared-savings 
pay-
ments, withholds, or bonuses. 
Remuneration to parties who participate in a value- 
based risk-sharing network arrangement may be in- 
kind or monetary payments, which may but are not 
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