H. R. 3590—281 
‘‘(5) the percent of shared savings specified by the Secretary 
under subsection (d)(2) and any limit on the total amount 
of shared savings established by the Secretary under such 
subsection; and 
‘‘(6) the termination of an ACO under subsection (d)(4). 
‘‘(h) DEFINITIONS.—In this section: 
‘‘(1) ACO PROFESSIONAL.—The term ‘ACO professional’ 
means— 
‘‘(A) a physician (as defined in section 1861(r)(1)); and 
‘‘(B) 
a 
practitioner 
described 
in 
section 
1842(b)(18)(C)(i). 
‘‘(2) HOSPITAL.—The term ‘hospital’ means a subsection 
(d) hospital (as defined in section 1886(d)(1)(B)). 
‘‘(3) MEDICARE FEE-FOR-SERVICE BENEFICIARY.—The term 
‘Medicare fee-for-service beneficiary’ means an individual who 
is enrolled in the original Medicare fee-for-service program 
under parts A and B and is not enrolled in an MA plan 
under part C, an eligible organization under section 1876, or 
a PACE program under section 1894.’’. 
SEC. 3023. NATIONAL PILOT PROGRAM ON PAYMENT BUNDLING. 
Title XVIII of the Social Security Act, as amended by section 
3021, is amended by inserting after section 1886C the following 
new section: 
‘‘NATIONAL PILOT PROGRAM ON PAYMENT BUNDLING 
‘‘SEC. 1866D. (a) IMPLEMENTATION.— 
‘‘(1) IN
GENERAL.—The Secretary shall establish a pilot 
program for integrated care during an episode of care provided 
to an applicable beneficiary around a hospitalization in order 
to improve the coordination, quality, and efficiency of health 
care services under this title. 
‘‘(2) DEFINITIONS.—In this section: 
‘‘(A) APPLICABLE BENEFICIARY.—The term ‘applicable 
beneficiary’ means an individual who— 
‘‘(i) is entitled to, or enrolled for, benefits under 
part A and enrolled for benefits under part B of such 
title, but not enrolled under part C or a PACE program 
under section 1894; and 
‘‘(ii) is admitted to a hospital for an applicable 
condition. 
‘‘(B) APPLICABLE
CONDITION.—The term ‘applicable 
condition’ means 1 or more of 8 conditions selected by 
the Secretary. In selecting conditions under the preceding 
sentence, the Secretary shall take into consideration the 
following factors: 
‘‘(i) Whether the conditions selected include a mix 
of chronic and acute conditions. 
‘‘(ii) Whether the conditions selected include a mix 
of surgical and medical conditions. 
‘‘(iii) Whether a condition is one for which there 
is evidence of an opportunity for providers of services 
and suppliers to improve the quality of care furnished 
while reducing total expenditures under this title. 
‘‘(iv) Whether a condition has significant variation 
in— 
‘‘(I) the number of readmissions; and
H. R. 3590—282 
‘‘(II) the amount of expenditures for post-acute 
care spending under this title. 
‘‘(v) Whether a condition is high-volume and has 
high post-acute care expenditures under this title. 
‘‘(vi) Which conditions the Secretary determines 
are most amenable to bundling across the spectrum 
of care given practice patterns under this title. 
‘‘(C) APPLICABLE SERVICES.—The term ‘applicable serv-
ices’ means the following: 
‘‘(i) Acute care inpatient services. 
‘‘(ii) Physicians’ services delivered in and outside 
of an acute care hospital setting. 
‘‘(iii) Outpatient hospital services, including emer-
gency department services. 
‘‘(iv) Post-acute care services, including home 
health services, skilled nursing services, inpatient 
rehabilitation services, and inpatient hospital services 
furnished by a long-term care hospital. 
‘‘(v) Other services the Secretary determines appro-
priate. 
‘‘(D) EPISODE OF CARE.— 
‘‘(i) IN GENERAL.—Subject to clause (ii), the term 
‘episode of care’ means, with respect to an applicable 
condition and an applicable beneficiary, the period that 
includes— 
‘‘(I) the 3 days prior to the admission of the 
applicable beneficiary to a hospital for the 
applicable condition; 
‘‘(II) the length of stay of the applicable bene-
ficiary in such hospital; and 
‘‘(III) the 30 days following the discharge of 
the applicable beneficiary from such hospital. 
‘‘(ii) ESTABLISHMENT
OF
PERIOD
BY
THE
SEC-
RETARY.—The Secretary, as appropriate, may establish 
a period (other than the period described in clause 
(i)) for an episode of care under the pilot program. 
‘‘(E) PHYSICIANS’ 
SERVICES.—The term ‘physicians’ 
services’ has the meaning given such term in section 
1861(q). 
‘‘(F) PILOT PROGRAM.—The term ‘pilot program’ means 
the pilot program under this section. 
‘‘(G) PROVIDER
OF
SERVICES.—The term ‘provider of 
services’ has the meaning given such term in section 
1861(u). 
‘‘(H) READMISSION.—The term ‘readmission’ has the 
meaning given such term in section 1886(q)(5)(E). 
‘‘(I) SUPPLIER.—The term ‘supplier’ has the meaning 
given such term in section 1861(d). 
‘‘(3) DEADLINE FOR IMPLEMENTATION.—The Secretary shall 
establish the pilot program not later than January 1, 2013. 
‘‘(b) DEVELOPMENTAL PHASE.— 
‘‘(1) 
DETERMINATION
OF
PATIENT
ASSESSMENT 
INSTRUMENT.—The Secretary shall determine which patient 
assessment instrument (such as the Continuity Assessment 
Record and Evaluation (CARE) tool) shall be used under the 
pilot program to evaluate the applicable condition of an 
applicable beneficiary for purposes of determining the most
H. R. 3590—283 
clinically appropriate site for the provision of post-acute care 
to the applicable beneficiary. 
‘‘(2) DEVELOPMENT OF QUALITY MEASURES FOR AN EPISODE 
OF CARE AND FOR POST-ACUTE CARE.— 
‘‘(A) IN GENERAL.—The Secretary, in consultation with 
the Agency for Healthcare Research and Quality and the 
entity with a contract under section 1890(a) of the Social 
Security Act, shall develop quality measures for use in 
the pilot program— 
‘‘(i) for episodes of care; and 
‘‘(ii) for post-acute care. 
‘‘(B) SITE-NEUTRAL
POST-ACUTE
CARE
QUALITY
MEAS-
URES.—Any quality measures developed under subpara-
graph (A)(ii) shall be site-neutral. 
‘‘(C) COORDINATION WITH QUALITY MEASURE DEVELOP-
MENT
AND
ENDORSEMENT
PROCEDURES.—The Secretary 
shall ensure that the development of quality measures 
under subparagraph (A) is done in a manner that is con-
sistent with the measures developed and endorsed under 
section 1890 and 1890A that are applicable to all post- 
acute care settings. 
‘‘(c) DETAILS.— 
‘‘(1) DURATION.— 
‘‘(A) IN GENERAL.—Subject to subparagraph (B), the 
pilot program shall be conducted for a period of 5 years. 
‘‘(B) EXTENSION.—The Secretary may extend the dura-
tion of the pilot program for providers of services and 
suppliers participating in the pilot program as of the day 
before the end of the 5-year period described in subpara-
graph (A), for a period determined appropriate by the Sec-
retary, if the Secretary determines that such extension 
will result in improving or not reducing the quality of 
patient care and reducing spending under this title. 
‘‘(2) PARTICIPATING
PROVIDERS
OF
SERVICES
AND
SUP-
PLIERS.— 
‘‘(A) IN GENERAL.—An entity comprised of providers 
of services and suppliers, including a hospital, a physician 
group, a skilled nursing facility, and a home health agency, 
who are otherwise participating under this title, may 
submit an application to the Secretary to provide applicable 
services to applicable individuals under this section. 
‘‘(B) REQUIREMENTS.—The Secretary shall develop 
requirements for entities to participate in the pilot program 
under this section. Such requirements shall ensure that 
applicable beneficiaries have an adequate choice of pro-
viders of services and suppliers under the pilot program. 
‘‘(3) PAYMENT METHODOLOGY.— 
‘‘(A) IN GENERAL.— 
‘‘(i) ESTABLISHMENT OF PAYMENT METHODS.—The 
Secretary shall develop payment methods for the pilot 
program for entities participating in the pilot program. 
Such payment methods may include bundled payments 
and bids from entities for episodes of care. The Sec-
retary shall make payments to the entity for services 
covered under this section. 
‘‘(ii) NO
ADDITIONAL
PROGRAM
EXPENDITURES.— 
Payments under this section for applicable items and
H. R. 3590—284 
services under this title (including payment for services 
described in subparagraph (B)) for applicable bene-
ficiaries for a year shall be established in a manner 
that does not result in spending more for such entity 
for such beneficiaries than would otherwise be 
expended for such entity for such beneficiaries for such 
year if the pilot program were not implemented, as 
estimated by the Secretary. 
‘‘(B) INCLUSION
OF
CERTAIN
SERVICES.—A payment 
methodology tested under the pilot program shall include 
payment for the furnishing of applicable services and other 
appropriate services, such as care coordination, medication 
reconciliation, discharge planning, transitional care serv-
ices, and other patient-centered activities as determined 
appropriate by the Secretary. 
‘‘(C) BUNDLED PAYMENTS.— 
‘‘(i) IN GENERAL.—A bundled payment under the 
pilot program shall— 
‘‘(I) be comprehensive, covering the costs of 
applicable services and other appropriate services 
furnished to an individual during an episode of 
care (as determined by the Secretary); and 
‘‘(II) be made to the entity which is partici-
pating in the pilot program. 
‘‘(ii) REQUIREMENT FOR PROVISION OF APPLICABLE 
SERVICES
AND
OTHER
APPROPRIATE
SERVICES.— 
Applicable services and other appropriate services for 
which payment is made under this subparagraph shall 
be furnished or directed by the entity which is partici-
pating in the pilot program. 
‘‘(D) PAYMENT FOR POST-ACUTE CARE SERVICES AFTER 
THE EPISODE OF CARE.—The Secretary shall establish proce-
dures, in the case where an applicable beneficiary requires 
continued post-acute care services after the last day of 
the episode of care, under which payment for such services 
shall be made. 
‘‘(4) QUALITY MEASURES.— 
‘‘(A) IN
GENERAL.—The Secretary shall establish 
quality measures (including quality measures of process, 
outcome, and structure) related to care provided by entities 
participating in the pilot program. Quality measures estab-
lished under the preceding sentence shall include measures 
of the following: 
‘‘(i) Functional status improvement. 
‘‘(ii) Reducing rates of avoidable hospital readmis-
sions. 
‘‘(iii) Rates of discharge to the community. 
‘‘(iv) Rates of admission to an emergency room 
after a hospitalization. 
‘‘(v) Incidence of health care acquired infections. 
‘‘(vi) Efficiency measures. 
‘‘(vii) Measures of patient-centeredness of care. 
‘‘(viii) Measures of patient perception of care. 
‘‘(ix) Other measures, including measures of 
patient outcomes, determined appropriate by the Sec-
retary. 
‘‘(B) REPORTING ON QUALITY MEASURES.—
H. R. 3590—285 
‘‘(i) IN GENERAL.—A entity shall submit data to 
the Secretary on quality measures established under 
subparagraph (A) during each year of the pilot program 
(in a form and manner, subject to clause (iii), specified 
by the Secretary). 
‘‘(ii) SUBMISSION
OF
DATA
THROUGH
ELECTRONIC 
HEALTH RECORD.—To the extent practicable, the Sec-
retary shall specify that data on measures be submitted 
under clause (i) through the use of an qualified elec-
tronic health record (as defined in section 3000(13) 
of the Public Health Service Act (42 U.S.C. 300jj– 
11(13)) in a manner specified by the Secretary. 
‘‘(d) WAIVER.—The Secretary may waive such provisions of this 
title and title XI as may be necessary to carry out the pilot program. 
‘‘(e) INDEPENDENT EVALUATION AND REPORTS ON PILOT PRO-
GRAM.— 
‘‘(1) INDEPENDENT EVALUATION.—The Secretary shall con-
duct an independent evaluation of the pilot program, including 
the extent to which the pilot program has— 
‘‘(A) improved quality measures established under sub-
section (c)(4)(A); 
‘‘(B) improved health outcomes; 
‘‘(C) improved applicable beneficiary access to care; 
and 
‘‘(D) reduced spending under this title. 
‘‘(2) REPORTS.— 
‘‘(A) INTERIM REPORT.—Not later than 2 years after 
the implementation of the pilot program, the Secretary 
shall submit to Congress a report on the initial results 
of the independent evaluation conducted under paragraph 
(1). 
‘‘(B) FINAL REPORT.—Not later than 3 years after the 
implementation of the pilot program, the Secretary shall 
submit to Congress a report on the final results of the 
independent evaluation conducted under paragraph (1). 
‘‘(f) CONSULTATION.—The Secretary shall consult with rep-
resentatives of small rural hospitals, including critical access hos-
pitals (as defined in section 1861(mm)(1)), regarding their participa-
tion in the pilot program. Such consultation shall include consider-
ation of innovative methods of implementing bundled payments 
in hospitals described in the preceding sentence, taking into consid-
eration any difficulties in doing so as a result of the low volume 
of services provided by such hospitals. 
‘‘(g) IMPLEMENTATION PLAN.— 
‘‘(1) IN GENERAL.—Not later than January 1, 2016, the 
Secretary shall submit a plan for the implementation of an 
expansion of the pilot program if the Secretary determines 
that such expansion will result in improving or not reducing 
the quality of patient care and reducing spending under this 
title. 
‘‘(h) ADMINISTRATION.—Chapter 35 of title 44, United States 
Code, shall not apply to the selection, testing, and evaluation of 
models or the expansion of such models under this section.’’.
H. R. 3590—286 
SEC. 3024. INDEPENDENCE AT HOME DEMONSTRATION PROGRAM. 
Title XVIII of the Social Security Act is amended by inserting 
after section 1866D, as inserted by section 3023, the following 
new section: 
‘‘INDEPENDENCE AT HOME MEDICAL PRACTICE DEMONSTRATION 
PROGRAM 
‘‘SEC. 1866D. (a) ESTABLISHMENT.— 
‘‘(1) IN
GENERAL.—The Secretary shall conduct a dem-
onstration program (in this section referred to as the ‘dem-
onstration program’) to test a payment incentive and service 
delivery model that utilizes physician and nurse practitioner 
directed home-based primary care teams designed to reduce 
expenditures and improve health outcomes in the provision 
of items and services under this title to applicable beneficiaries 
(as defined in subsection (d)). 
‘‘(2) REQUIREMENT.—The demonstration program shall test 
whether a model described in paragraph (1), which is account-
able for providing comprehensive, coordinated, continuous, and 
accessible care to high-need populations at home and coordi-
nating health care across all treatment settings, results in— 
‘‘(A) reducing preventable hospitalizations; 
‘‘(B) preventing hospital readmissions; 
‘‘(C) reducing emergency room visits; 
‘‘(D) improving health outcomes commensurate with 
the beneficiaries’ stage of chronic illness; 
‘‘(E) improving the efficiency of care, such as by 
reducing duplicative diagnostic and laboratory tests; 
‘‘(F) reducing the cost of health care services covered 
under this title; and 
‘‘(G) achieving beneficiary and family caregiver satis-
faction. 
‘‘(b) INDEPENDENCE AT HOME MEDICAL PRACTICE.— 
‘‘(1) INDEPENDENCE AT HOME MEDICAL PRACTICE DEFINED.— 
In this section: 
‘‘(A) IN GENERAL.—The term ‘independence at home 
medical practice’ means a legal entity that— 
‘‘(i) is comprised of an individual physician or nurse 
practitioner or group of physicians and nurse practi-
tioners that provides care as part of a team that 
includes physicians, nurses, physician assistants, phar-
macists, and other health and social services staff as 
appropriate who have experience providing home-based 
primary care to applicable beneficiaries, make in-home 
visits, and are available 24 hours per day, 7 days 
per week to carry out plans of care that are tailored 
to the individual beneficiary’s chronic conditions and 
designed to achieve the results in subsection (a); 
‘‘(ii) is organized at least in part for the purpose 
of providing physicians’ services; 
‘‘(iii) has documented experience in providing 
home-based primary care services to high-cost chron-
ically ill beneficiaries, as determined appropriate by 
the Secretary;
H. R. 3590—287 
‘‘(iv) furnishes services to at least 200 applicable 
beneficiaries (as defined in subsection (d)) during each 
year of the demonstration program; 
‘‘(v) has entered into an agreement with the Sec-
retary; 
‘‘(vi) uses electronic health information systems, 
remote monitoring, and mobile diagnostic technology; 
and 
‘‘(vii) meets such other criteria as the Secretary 
determines to be appropriate to participate in the dem-
onstration program. 
The entity shall report on quality measures (in such form, 
manner, and frequency as specified by the Secretary, which 
may be for the group, for providers of services and sup-
pliers, or both) and report to the Secretary (in a form, 
manner, and frequency as specified by the Secretary) such 
data as the Secretary determines appropriate to monitor 
and evaluate the demonstration program. 
‘‘(B) PHYSICIAN.—The term ‘physician’ includes, except 
as the Secretary may otherwise provide, any individual 
who furnishes services for which payment may be made 
as physicians’ services and has the medical training or 
experience to fulfill the physician’s role described in 
subparagraph (A)(i). 
‘‘(2) PARTICIPATION OF NURSE PRACTITIONERS AND PHYSICIAN 
ASSISTANTS.—Nothing in this section shall be construed to pre-
vent a nurse practitioner or physician assistant from partici-
pating in, or leading, a home-based primary care team as 
part of an independence at home medical practice if— 
‘‘(A) all the requirements of this section are met; 
‘‘(B) the nurse practitioner or physician assistant, as 
the case may be, is acting consistent with State law; and 
‘‘(C) the nurse practitioner or physician assistant has 
the medical training or experience to fulfill the nurse 
practitioner or physician assistant role described in para-
graph (1)(A)(i). 
‘‘(3) INCLUSION
OF
PROVIDERS
AND
PRACTITIONERS.— 
Nothing in this subsection shall be construed as preventing 
an independence at home medical practice from including a 
provider of services or a participating practitioner described 
in section 1842(b)(18)(C) that is affiliated with the practice 
under an arrangement structured so that such provider of 
services or practitioner participates in the demonstration pro-
gram and shares in any savings under the demonstration pro-
gram. 
‘‘(4) QUALITY
AND
PERFORMANCE
STANDARDS.—The Sec-
retary shall develop quality performance standards for 
independence at home medical practices participating in the 
demonstration program. 
‘‘(c) PAYMENT METHODOLOGY.— 
‘‘(1) ESTABLISHMENT OF TARGET SPENDING LEVEL.—The Sec-
retary shall establish an estimated annual spending target, 
for the amount the Secretary estimates would have been spent 
in the absence of the demonstration, for items and services
H. R. 3590—288 
covered under parts A and B furnished to applicable bene-
ficiaries for each qualifying independence at home medical prac-
tice under this section. Such spending targets shall be deter-
mined on a per capita basis. Such spending targets shall include 
a risk corridor that takes into account normal variation in 
expenditures for items and services covered under parts A 
and B furnished to such beneficiaries with the size of the 
corridor being related to the number of applicable beneficiaries 
furnished services by each independence at home medical prac-
tice. The spending targets may also be adjusted for other factors 
as the Secretary determines appropriate. 
‘‘(2) INCENTIVE
PAYMENTS.—Subject to performance on 
quality measures, a qualifying independence at home medical 
practice is eligible to receive an incentive payment under this 
section if actual expenditures for a year for the applicable 
beneficiaries it enrolls are less than the estimated spending 
target established under paragraph (1) for such year. An incen-
tive payment for such year shall be equal to a portion (as 
determined by the Secretary) of the amount by which actual 
expenditures (including incentive payments under this para-
graph) for applicable beneficiaries under parts A and B for 
such year are estimated to be less than 5 percent less than 
the estimated spending target for such year, as determined 
under paragraph (1). 
‘‘(d) APPLICABLE BENEFICIARIES.— 
‘‘(1) DEFINITION.—In this section, the term ‘applicable bene-
ficiary’ means, with respect to a qualifying independence at 
home medical practice, an individual who the practice has 
determined— 
‘‘(A) is entitled to benefits under part A and enrolled 
for benefits under part B; 
‘‘(B) is not enrolled in a Medicare Advantage plan 
under part C or a PACE program under section 1894; 
‘‘(C) has 2 or more chronic illnesses, such as congestive 
heart failure, diabetes, other dementias designated by the 
Secretary, chronic obstructive pulmonary disease, ischemic 
heart 
disease, 
stroke, 
Alzheimer’s 
Disease 
and 
neurodegenerative diseases, and other diseases and condi-
tions designated by the Secretary which result in high 
costs under this title; 
‘‘(D) within the past 12 months has had a nonelective 
hospital admission; 
‘‘(E) within the past 12 months has received acute 
or subacute rehabilitation services; 
‘‘(F) has 2 or more functional dependencies requiring 
the assistance of another person (such as bathing, dressing, 
toileting, walking, or feeding); and 
‘‘(G) meets such other criteria as the Secretary deter-
mines appropriate. 
‘‘(2) PATIENT
ELECTION
TO
PARTICIPATE.—The Secretary 
shall determine an appropriate method of ensuring that 
applicable beneficiaries have agreed to enroll in an independ-
ence at home medical practice under the demonstration pro-
gram. Enrollment in the demonstration program shall be vol-
untary. 
‘‘(3) BENEFICIARY ACCESS TO SERVICES.—Nothing in this 
section shall be construed as encouraging physicians or nurse
H. R. 3590—289 
practitioners to limit applicable beneficiary access to services 
covered under this title and applicable beneficiaries shall not 
be required to relinquish access to any benefit under this title 
as a condition of receiving services from an independence at 
home medical practice. 
‘‘(e) IMPLEMENTATION.— 
‘‘(1) STARTING
DATE.—The demonstration program shall 
begin no later than January 1, 2012. An agreement with an 
independence at home medical practice under the demonstra-
tion program may cover not more than a 3-year period. 
‘‘(2) NO PHYSICIAN DUPLICATION IN DEMONSTRATION PARTICI-
PATION.—The Secretary shall not pay an independence at home 
medical practice under this section that participates in section 
1899. 
‘‘(3) NO
BENEFICIARY
DUPLICATION
IN
DEMONSTRATION 
PARTICIPATION.—The Secretary shall ensure that no applicable 
beneficiary enrolled in an independence at home medical prac-
tice under this section is participating in the programs under 
section 1899. 
‘‘(4) PREFERENCE.—In approving an independence at home 
medical practice, the Secretary shall give preference to practices 
that are— 
‘‘(A) located in high-cost areas of the country; 
‘‘(B) have experience in furnishing health care services 
to applicable beneficiaries in the home; and 
‘‘(C) use electronic medical records, health information 
technology, and individualized plans of care. 
‘‘(5) LIMITATION ON NUMBER OF PRACTICES.—In selecting 
qualified independence at home medical practices to participate 
under the demonstration program, the Secretary shall limit 
the number of such practices so that the number of applicable 
beneficiaries that may participate in the demonstration pro-
gram does not exceed 10,000. 
‘‘(6) WAIVER.—The Secretary may waive such provisions 
of this title and title XI as the Secretary determines necessary 
in order to implement the demonstration program. 
‘‘(7) ADMINISTRATION.—Chapter 35 of title 44, United States 
Code, shall not apply to this section. 
‘‘(f) EVALUATION AND MONITORING.— 
‘‘(1) IN
GENERAL.—The Secretary shall evaluate each 
independence at home medical practice under the demonstra-
tion program to assess whether the practice achieved the results 
described in subsection (a). 
‘‘(2) MONITORING
APPLICABLE
BENEFICIARIES.—The Sec-
retary may monitor data on expenditures and quality of services 
under this title after an applicable beneficiary discontinues 
receiving services under this title through a qualifying 
independence at home medical practice. 
‘‘(g) REPORTS TO CONGRESS.—The Secretary shall conduct an 
independent evaluation of the demonstration program and submit 
to Congress a final report, including best practices under the dem-
onstration program. Such report shall include an analysis of the 
demonstration program on coordination of care, expenditures under 
this title, applicable beneficiary access to services, and the quality 
of health care services provided to applicable beneficiaries. 
‘‘(h) FUNDING.—For purposes of administering and carrying 
out the demonstration program, other than for payments for items