I 
113TH CONGRESS 
1ST SESSION H. R. 3796 
To amend title XVIII of the Social Security Act to provide for bundled 
payments for certain episodes of care surrounding a hospitalization, and 
for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
DECEMBER 19, 2013 
Mrs. BLACK (for herself and Mr. NEAL) 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 provi-
sions as fall within the jurisdiction of the committee concerned 
A BILL 
To amend title XVIII of the Social Security Act to provide 
for bundled payments for certain episodes of care sur-
rounding a hospitalization, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Comprehensive Care 
Payment Innovation Act’’. 
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SEC. 2. PERMANENT, NATIONAL VOLUNTARY PAYMENT 
BUNDLING. 
Title XVIII of the Social Security Act is amended by 
inserting after section 1866E (42 U.S.C. 1395cc–5) the 
following new section: 
‘‘NATIONAL VOLUNTARY PAYMENT BUNDLING 
‘‘SEC. 1866F. (a) ESTABLISHMENT AND IMPLEMEN-
TATION.— 
‘‘(1) IN GENERAL.—The Secretary shall provide 
for bundled payments under this section for inte-
grated care furnished by a qualified entity during an 
episode of care to an applicable beneficiary for appli-
cable conditions involving a hospitalization. 
‘‘(2) DEADLINE.—The Secretary shall imple-
ment this section not later than January 1, 2015. 
‘‘(3) APPLICABLE BENEFICIARY DEFINED.—In 
this section, the term ‘applicable beneficiary’ means 
an individual who is entitled to, or enrolled for, ben-
efits under part A and enrolled for benefits under 
part B, but not enrolled under part C or in a PACE 
program under section 1894, and who is admitted to 
a hospital for an applicable condition. 
‘‘(b) QUALIFIED ENTITY AND APPLICATION PROC-
ESS.— 
‘‘(1) DEFINITIONS.—In this section: 
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‘‘(A) IN
GENERAL.—The term ‘qualified 
entity’ means a qualified applicant that has an 
application approved by the Secretary to receive 
bundled payments for furnishing applicable 
services to applicable individuals under this sec-
tion. 
‘‘(B) QUALIFIED
APPLICANT.—The term 
‘qualified applicant’ means a corporation, part-
nership, or limited liability company, that is au-
thorized in writing by a group of providers of 
services and suppliers, including at least a hos-
pital, that are otherwise participating under 
this title to act as their agent for the purpose 
of receiving and distributing bundled payments 
on their behalf under this section. A qualified 
applicant may (but is not required to) be a pro-
vider of services or supplier that is otherwise 
participating under this title. 
‘‘(2) APPLICATION.— 
‘‘(A) IN GENERAL.—A qualified applicant 
may submit to the Secretary an application to 
become a qualified entity to receive bundled 
payments under this section. 
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‘‘(B) CONTENTS.—An application under 
subparagraph (A) with respect to a group of 
providers of services and suppliers— 
‘‘(i) shall contain such information 
and assurances as the Secretary may speci-
fy, including with respect to the require-
ments under subsection (c)(1); and 
‘‘(ii) shall indicate the applicable con-
ditions with respect to which the group 
seeks to furnish applicable services during 
the episode of care involved and the bun-
dled payment methodology under sub-
section (g) or (h) under which the group 
would be paid for such services. 
‘‘(3) CHOICE
AMONG
APPLICABLE
CONDI-
TIONS.—A qualified entity may select one or more 
applicable conditions for bundled payments under 
this section. Nothing in this section shall be con-
strued as requiring, or authorizing the Secretary to 
require, a qualified entity to select any particular ap-
plicable condition under this section. 
‘‘(4) EXPEDITED
APPLICATION
PROCESS
FOR 
QUALIFIED
APPLICANTS
SUCCESSFULLY
PARTICI-
PATING
IN
THE
CMI
BUNDLED
PAYMENT
DEM-
ONSTRATION.—In the case of any qualified applicant 
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that the Secretary determines has successfully par-
ticipated in any of the payment and service delivery 
models tested by the Center for Medicare and Med-
icaid Innovation under section 1115A through the 
Bundled Payments for Care Improvement (BPCI) 
Initiative, the Secretary shall provide for an expe-
dited application process under this subsection. 
‘‘(c) REQUIREMENTS FOR QUALIFIED ENTITIES.— 
‘‘(1) REQUIREMENTS.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
develop requirements for qualified entities to re-
ceive bundled payments for furnishing applica-
ble services for applicable conditions during an 
episode of care under this section. 
‘‘(B) AGREEMENT
PERIOD.—Under such 
requirements, a qualified entity shall agree to 
receive bundled payments for the furnishing of 
such services for a 5-year period (each such 
year in such period referred to in this section 
as an ‘agreement year’). 
‘‘(C) BENEFICIARY TRANSPARENCY.—Such 
requirements shall ensure transparency between 
a qualified entity and applicable beneficiaries 
such that notice is provided to an applicable 
beneficiary sufficiently in advance, to the extent 
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practicable, of the beneficiary’s inpatient admis-
sion for the applicable condition and episode of 
care involved. Such a notice shall include— 
‘‘(i) appropriate notice of bundled 
payments for the applicable condition for 
the episode of care involved; and 
‘‘(ii) a statement informing the bene-
ficiary of the beneficiary’s right to select 
the providers of services and suppliers fur-
nishing items and services related to the 
episode of care. 
‘‘(D) METHODOLOGY AND MEASURES FOR 
QUALITY AND EFFICIENCY ARRANGEMENTS.— 
Insofar as a qualified entity uses or seeks to 
implement a quality and efficiency arrangement 
under subsection (i), the qualified entity shall 
specify in the application to the Secretary in de-
tail the methodology for allocating savings 
under the arrangement and the specific meas-
ures to be used to assess the quality of care 
under the arrangement. 
‘‘(2) PROVISION OF DATA BY SECRETARY.— 
‘‘(A) CLAIMS DATA.—The Secretary shall 
furnish to a group of providers of services and 
suppliers interested in submitting an applica-
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tion under subsection (b)(2) claims data under 
parts A and B, including complete claims files, 
for applicable conditions relating to the pro-
viders and suppliers in the group that are suffi-
ciently specific to permit such group to deter-
mine whether to submit such application. Such 
claims data shall also be furnished to a quali-
fied entity monthly during the agreement period 
described in paragraph (1)(B) of any approved 
application with respect to an applicable condi-
tion. 
‘‘(B) QUALITY DATA.—The Secretary shall 
furnish to a qualified entity data on quality 
measures with respect to any applicable condi-
tion under an approved application during the 
agreement period for the entity for each episode 
of care and across the continuum of care. 
‘‘(d) APPLICABLE CONDITIONS.— 
‘‘(1) INITIAL CONDITIONS.—In this section, the 
term ‘applicable condition’ means any of the fol-
lowing procedures furnished as part of inpatient hos-
pital services: 
‘‘(A) Hip/Knee joint replacement. 
‘‘(B) Lumbar spine fusion. 
‘‘(C) Coronary artery bypass graft. 
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‘‘(D) Heart valve replacement. 
‘‘(E) Percutaneous coronary intervention 
with stent. 
‘‘(F) Colon resection. 
‘‘(2) DISCRETION TO ADD CONDITIONS.—Such 
term also includes such additional procedures or 
conditions as the Secretary may select. In selecting 
such procedures or conditions, the Secretary may 
take into consideration the factors described in sec-
tion 1866D(a)(2)(B). 
‘‘(e) APPLICABLE SERVICES; EPISODE OF CARE.—In 
this section: 
‘‘(1) APPLICABLE SERVICES.—The term ‘appli-
cable services’ means the following items and serv-
ices: 
‘‘(A) Acute care inpatient services. 
‘‘(B) Physicians’ services delivered in and 
outside of an acute care hospital setting. 
‘‘(C) Outpatient hospital services. 
‘‘(D) 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. 
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‘‘(E) Other services the Secretary deter-
mines appropriate. 
‘‘(2) EPISODE OF CARE.— 
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), the term ‘episode of care’ means, 
with respect to an applicable condition and an 
applicable beneficiary, the period consisting 
of— 
‘‘(i) the 3 days prior to the admission 
of the applicable beneficiary to a hospital 
with respect to the applicable condition; 
‘‘(ii) the duration of the applicable 
beneficiary’s initial inpatient stay in such 
hospital for the applicable condition; and 
‘‘(iii) the 90 days following the dis-
charge of the applicable beneficiary from 
such hospital. 
‘‘(B) ESTABLISHMENT OF PERIOD BY THE 
SECRETARY.—The Secretary, as appropriate, 
may establish a period (other than the period 
described in subparagraph (A)) for an episode 
of care under this section based on data anal-
yses. 
‘‘(3) DISCHARGING HOSPITAL.—The term ‘dis-
charging hospital’ means, with respect to applicable 
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services in an episode of care, the hospital referred 
to in paragraph (2)(A). 
‘‘(f) BUNDLED PAYMENT DEVELOPMENT.— 
‘‘(1) IN GENERAL.—Subject to the succeeding 
provisions of this subsection, the Secretary shall de-
velop bundled payments for qualified entities. A bun-
dled payment shall provide for comprehensive pay-
ment for the costs of applicable services furnished to 
an applicable beneficiary during an episode of care 
for an applicable condition, including readmissions 
related to the applicable condition but excluding un-
related readmissions, under either a fee-for-service 
model with shared savings and losses (under sub-
section (g)) or under a prospective payment model 
for advanced qualified entities (under subsection 
(h)). Bundled payments shall be based on the spend-
ing targets computed under paragraph (2). 
‘‘(2) COMPUTATION OF SPENDING TARGETS.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
compute under this paragraph, for each quali-
fied entity for each applicable condition for an 
episode of care beginning in an agreement year 
(beginning with 2015) that is attributable to a 
discharging hospital, a spending target equal to 
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the updated amount computed under subpara-
graph (C) for that entity, episode, and year. 
‘‘(B) INITIAL
WEIGHTED
AVERAGE
CAL-
CULATION FOR DISCHARGING HOSPITALS.— 
‘‘(i) IN GENERAL.—Using fee-for-serv-
ice claims data from the base period (as 
defined in subparagraph (D)), subject to 
clause (ii), the Secretary shall first cal-
culate a base average spending target for 
each applicable condition for each dis-
charging hospital equal to a weighted aver-
age of spending under parts A and B for 
all applicable services for such applicable 
condition associated with initial admissions 
to such hospital computed as the sum of 
the following (with respect to such hos-
pital): 
‘‘(I) 60 percent of the standard-
ized spending per episode in the most 
recent year in the base period. 
‘‘(II) 30 percent of the standard-
ized spending per episode in the pre-
vious year. 
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‘‘(III) 10 percent of the stand-
ardized spending per episode in the 
second previous year. 
‘‘(ii) EXCLUSION
OF
OUTLIERS
AND 
STANDARDIZATION.—In 
calculating 
the 
amount of the base average spending tar-
get for an applicable condition under 
clause (i) for a discharging hospital, the 
Secretary shall— 
‘‘(I) exclude from the calculation 
payments for episodes of care for the 
applicable condition that exceed the 
95th percentile of all such spending 
for such episodes of care and applica-
ble condition, as estimated by the Sec-
retary, based on the most recent data 
available; and 
‘‘(II) standardize the spending 
made in each year in the base period 
to each provider of service or supplier 
to remove the spending adjustments 
in effect in such year relating to pro-
vider or supplier location (such as 
area wage indices) and provider type 
(such as indirect medical education 
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adjustments 
and 
disproportionate 
share hospital adjustments). 
‘‘(C) TRENDING THE SPENDING TARGETS 
BASED
ON
NATIONAL
GROWTH
RATES
TO 
AGREEMENT
YEAR; PERIODIC
REBASING
FOR 
NEW AGREEMENT PERIODS.— 
‘‘(i) IN
GENERAL.—The Secretary 
shall update the base average spending tar-
gets for all discharging hospitals under 
subparagraph (B) for each applicable con-
dition and agreement year based on trends 
in the national fee-for-service claims data 
for applicable services furnished during an 
episode of care for an applicable condition 
from the base period to the agreement year 
involved. Such update shall not vary by 
discharging hospital. 
‘‘(ii) PERIODIC
REBASING
FOR
NEW 
AGREEMENT
PERIODS.—At the start of 
each new agreement period, the Secretary 
shall update the base period and calculate 
new spending targets under the previous 
provisions of this paragraph for a dis-
charging hospital and applicable condi-
tions, including providing for adjustments 
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