H. R. 34—297 
Security Act (42 U.S.C. 1395 et seq.) or enrolled under 
part B of such title. 
(B) DEFINITIONS.—For purposes of this subsection, the 
following definitions apply: 
(i) SUPPLIER; DURABLE MEDICAL EQUIPMENT.—The 
terms ‘‘supplier’’ and ‘‘durable medical equipment’’ have 
the meanings given such terms by section 1861 of 
the Social Security Act (42 U.S.C. 1395x). 
(ii) APPLICABLE PAYMENT ADJUSTMENT.—The term 
‘‘applicable payment adjustment’’ means a payment 
adjustment described in section 414.210(g) of title 42, 
Code of Federal Regulations, that is phased in by para-
graph (9)(i) of such section. For purposes of the pre-
ceding sentence, a payment adjustment that is phased 
in pursuant to the extension under subsection (a) shall 
be considered a payment adjustment that is phased 
in by such paragraph (9)(i). 
(2) REPORT.—The Secretary of Health and Human Services 
shall, not later than January 12, 2017, submit to the Commit-
tees on Ways and Means and on Energy and Commerce of 
the House of Representatives, and to the Committee on Finance 
of the Senate, a report on the findings of the study conducted 
under paragraph (1). 
SEC. 16008. REQUIREMENTS IN DETERMINING ADJUSTMENTS USING 
INFORMATION 
FROM 
COMPETITIVE 
BIDDING 
PRO-
GRAMS. 
(a) IN GENERAL.—Section 1834(a)(1)(G) of the Social Security 
Act (42 U.S.C. 1395m(a)(1)(G)) is amended by adding at the end 
the following new sentence: ‘‘In the case of items and services 
furnished on or after January 1, 2019, in making any adjustments 
under clause (ii) or (iii) of subparagraph (F), under subsection 
(h)(1)(H)(ii), or under section 1842(s)(3)(B), the Secretary shall— 
‘‘(i) solicit and take into account stakeholder input; 
and 
‘‘(ii) take into account the highest amount bid by 
a winning supplier in a competitive acquisition area 
and a comparison of each of the following with respect 
to non-competitive acquisition areas and competitive 
acquisition areas: 
‘‘(I) The average travel distance and cost asso-
ciated with furnishing items and services in the 
area. 
‘‘(II) The average volume of items and services 
furnished by suppliers in the area. 
‘‘(III) The number of suppliers in the area.’’. 
(b) CONFORMING AMENDMENTS.—(1) Section 1834(h)(1)(H)(ii) of 
the Social Security Act (42 U.S.C. 1395m(h)(1)(H)(ii)) is amended 
by striking ‘‘the Secretary’’ and inserting ‘‘subject to subsection 
(a)(1)(G), the Secretary’’. 
(2) Section 1842(s)(3)(B) of the Social Security Act (42 U.S.C. 
1395m(s)(3)(B)) is amended by striking ‘‘the Secretary’’ and inserting 
‘‘subject to section 1834(a)(1)(G), the Secretary’’.
H. R. 34—298 
TITLE XVII—OTHER MEDICARE 
PROVISIONS 
SEC. 17001. DELAY IN AUTHORITY TO TERMINATE CONTRACTS FOR 
MEDICARE ADVANTAGE PLANS FAILING TO ACHIEVE 
MINIMUM QUALITY RATINGS. 
(a) FINDINGS.—Consistent with the studies provided under the 
IMPACT Act of 2014 (Public Law 113–185), it is the intent of 
Congress— 
(1) to continue to study and request input on the effects 
of socioeconomic status and dual-eligible populations on the 
Medicare Advantage STARS rating system before reforming 
such system with the input of stakeholders; and 
(2) pending the results of such studies and input, to provide 
for a temporary delay in authority of the Centers for Medicare 
& Medicaid Services (CMS) to terminate Medicare Advantage 
plan contracts solely on the basis of performance of plans 
under the STARS rating system. 
(b) DELAY
IN MA CONTRACT TERMINATION AUTHORITY
FOR 
PLANS FAILING TO ACHIEVE MINIMUM QUALITY RATINGS.—Section 
1857(h) of the Social Security Act (42 U.S.C. 1395w–27(h)) is 
amended by adding at the end the following new paragraph: 
‘‘(3) DELAY
IN
CONTRACT
TERMINATION
AUTHORITY
FOR 
PLANS FAILING TO ACHIEVE MINIMUM QUALITY RATING.—During 
the period beginning on the date of the enactment of this 
paragraph and through the end of plan year 2018, the Secretary 
may not terminate a contract under this section with respect 
to the offering of an MA plan by a Medicare Advantage 
organization solely because the MA plan has failed to achieve 
a minimum quality rating under the 5-star rating system under 
section 1853(o)(4).’’. 
SEC. 17002. REQUIREMENT FOR ENROLLMENT DATA REPORTING FOR 
MEDICARE. 
Section 1874 of the Social Security Act (42 U.S.C. 1395kk) 
is amended by adding at the end the following new subsection: 
‘‘(g) REQUIREMENT FOR ENROLLMENT DATA REPORTING.— 
‘‘(1) IN GENERAL.—Each year (beginning with 2016), the 
Secretary shall submit to the Committees on Ways and Means 
and Energy and Commerce of the House of Representatives 
and the Committee on Finance of the Senate a report on Medi-
care enrollment data (and, in the case of part A, on data 
on individuals receiving benefits under such part) as of a date 
in such year specified by the Secretary. Such data shall be 
presented— 
‘‘(A) by Congressional district and State; and 
‘‘(B) in a manner that provides for such data based 
on— 
‘‘(i) fee-for-service enrollment (as defined in para-
graph (2)); 
‘‘(ii) enrollment under part C (including separate 
for aggregate enrollment in MA–PD plans and aggre-
gate enrollment in MA plans that are not MA–PD 
plans); and 
‘‘(iii) enrollment under part D.
H. R. 34—299 
‘‘(2) FEE-FOR-SERVICE ENROLLMENT DEFINED.—For purpose 
of paragraph (1)(B)(i), the term ‘fee-for-service enrollment’ 
means aggregate enrollment (including receipt of benefits other 
than through enrollment) under— 
‘‘(A) part A only; 
‘‘(B) part B only; and 
‘‘(C) both part A and part B.’’. 
SEC. 17003. UPDATING THE WELCOME TO MEDICARE PACKAGE. 
(a) IN GENERAL.—Not later than 12 months after the last 
day of the period for the request of information described in sub-
section (b), the Secretary of Health and Human Services shall, 
taking into consideration information collected pursuant to sub-
section (b), update the information included in the Welcome to 
Medicare package to include information, presented in a clear and 
simple manner, about options for receiving benefits under the Medi-
care program under title XVIII of the Social Security Act (42 U.S.C. 
1395 et seq.), including through the original medicare fee-for-service 
program under parts A and B of such title (42 U.S.C. 1395c et 
seq., 42 U.S.C. 1395j et seq.), Medicare Advantage plans under 
part C of such title (42 U.S.C. 1395w–21 et seq.), and prescription 
drug plans under part D of such title (42 U.S.C. 1395w–101 et 
seq.)). The Secretary shall make subsequent updates to the informa-
tion included in the Welcome to Medicare package as appropriate. 
(b) REQUEST FOR INFORMATION.—Not later than 6 months after 
the date of the enactment of this Act, the Secretary of Health 
and Human Services shall request information, including rec-
ommendations, from stakeholders (including patient advocates, 
issuers, and employers) on information included in the Welcome 
to Medicare package, including pertinent data and information 
regarding enrollment and coverage for Medicare eligible individuals. 
SEC. 17004. NO PAYMENT FOR ITEMS AND SERVICES FURNISHED BY 
NEWLY ENROLLED PROVIDERS OR SUPPLIERS WITHIN 
A TEMPORARY MORATORIUM AREA. 
(a) MEDICARE.—Section 1866(j)(7) of the Social Security Act 
(42 U.S.C. 1395cc(j)(7)) is amended— 
(1) in the paragraph heading, by inserting ‘‘; NONPAYMENT’’ 
before the period; and 
(2) by adding at the end the following new subparagraph: 
‘‘(C) NONPAYMENT.— 
‘‘(i) IN GENERAL.—No payment may be made under 
this title or under a program described in subpara-
graph (A) with respect to an item or service described 
in clause (ii) furnished on or after October 1, 2017. 
‘‘(ii) ITEM
OR
SERVICE
DESCRIBED.—An item or 
service described in this clause is an item or service 
furnished— 
‘‘(I) within a geographic area with respect to 
which a temporary moratorium imposed under 
subparagraph (A) is in effect; and 
‘‘(II) by a provider of services or supplier that 
meets the requirements of clause (iii). 
‘‘(iii) REQUIREMENTS.—For purposes of clause (ii), 
the requirements of this clause are that a provider 
of services or supplier— 
‘‘(I) enrolls under this title on or after the 
effective date of such temporary moratorium; and
H. R. 34—300 
‘‘(II) is within a category of providers of serv-
ices and suppliers (as described in subparagraph 
(A)) subject to such temporary moratorium. 
‘‘(iv) PROHIBITION
ON
CHARGES
FOR
SPECIFIED 
ITEMS OR SERVICES.—In no case shall a provider of 
services or supplier described in clause (ii)(II) charge 
an individual or other person for an item or service 
described in clause (ii) furnished on or after October 
1, 2017, to an individual entitled to benefits under 
part A or enrolled under part B or an individual under 
a program specified in subparagraph (A).’’. 
(b) CONFORMING AMENDMENTS.— 
(1) MEDICAID.— 
(A) IN GENERAL.—Section 1903(i)(2) of the Social Secu-
rity Act (42 U.S.C. 1396b(i)(2)), as amended by section 
5005(a)(4), is further amended— 
(i) in subparagraph (C), by striking ‘‘or’’ at the 
end; and 
(ii) by adding at the end the following new 
subparagraph: 
‘‘(E) with respect to any amount expended for such 
an item or service furnished during calendar quarters 
beginning on or after October 1, 2017, subject to section 
1902(kk)(4)(A)(ii)(II), within a geographic area that is sub-
ject to a moratorium imposed under section 1866(j)(7) by 
a provider or supplier that meets the requirements specified 
in subparagraph (C)(iii) of such section, during the period 
of such moratorium; or’’. 
(B) EXCEPTION
WITH
RESPECT
TO
ACCESS.—Section 
1902(kk)(4)(A)(ii) of the Social Security Act (42 U.S.C. 
1396a(kk)(4)(A)(ii)) is amended to read as follows: 
‘‘(ii) EXCEPTIONS.— 
‘‘(I) COMPLIANCE WITH MORATORIUM.—A State 
shall not be required to comply with a temporary 
moratorium described in clause (i) if the State 
determines that the imposition of such temporary 
moratorium would adversely impact beneficiaries’ 
access to medical assistance. 
‘‘(II) FFP AVAILABLE.—Notwithstanding sec-
tion 1903(i)(2)(E), payment may be made to a State 
under this title with respect to amounts expended 
for items and services described in such section 
if the Secretary, in consultation with the State 
agency administering the State plan under this 
title (or a waiver of the plan), determines that 
denying payment to the State pursuant to such 
section would adversely impact beneficiaries’ 
access to medical assistance. ’’. 
(C) STATE PLAN REQUIREMENT WITH RESPECT TO LIMITA-
TION
ON
CHARGES
TO
BENEFICIARIES.—Section 
1902(kk)(4)(A) of the Social Security Act (42 U.S.C. 
1396a(kk)(4)(A)) is amended by adding at the end the fol-
lowing new clause: 
‘‘(iii) LIMITATION ON CHARGES TO BENEFICIARIES.— 
With respect to any amount expended for items or 
services furnished during calendar quarters beginning 
on or after October 1, 2017, the State prohibits, during
H. R. 34—301 
the period of a temporary moratorium described in 
clause (i), a provider meeting the requirements speci-
fied in subparagraph (C)(iii) of section 1866(j)(7) from 
charging an individual or other person eligible to 
receive medical assistance under the State plan under 
this title (or a waiver of the plan) for an item or 
service described in section 1903(i)(2)(E) furnished to 
such an individual.’’. 
(2) CORRECTING AMENDMENTS TO RELATED PROVISIONS.— 
(A) SECTION 1866(J).—Section 1866(j) of the Social Secu-
rity Act (42 U.S.C. 1395cc(j)) is amended— 
(i) in paragraph (1)(A)— 
(I) by striking ‘‘paragraph (4)’’ and inserting 
‘‘paragraph (5)’’; 
(II) by striking ‘‘moratoria in accordance with 
paragraph (5)’’ and inserting ‘‘moratoria in accord-
ance with paragraph (7)’’; and 
(III) by striking ‘‘paragraph (6)’’ and inserting 
‘‘paragraph (9)’’; and 
(ii) by redesignating the second paragraph (8) 
(redesignated by section 1304(1) of Public Law 111– 
152) as paragraph (9). 
(B) SECTION 1902(KK).—Section 1902(kk) of such Act 
(42 U.S.C. 1396a(kk)) is amended— 
(i) in paragraph (1), by striking ‘‘section 1886(j)(2)’’ 
and inserting ‘‘section 1866(j)(2)’’; 
(ii) in paragraph (2), by striking ‘‘section 1886(j)(3)’’ 
and inserting ‘‘section 1866(j)(3)’’; 
(iii) 
in 
paragraph 
(3), 
by 
striking 
‘‘section 
1886(j)(4)’’ and inserting ‘‘section 1866(j)(5)’’; and 
(iv) in paragraph (4)(A), by striking ‘‘section 
1886(j)(6)’’ and inserting ‘‘section 1866(j)(7)’’. 
SEC. 17005. PRESERVATION OF MEDICARE BENEFICIARY CHOICE 
UNDER MEDICARE ADVANTAGE. 
Section 1851(e)(2) of the Social Security Act (42 U.S.C. 1395w– 
21(e)(2)) is amended— 
(1) in subparagraph (C)— 
(A) in the heading, by inserting ‘‘FROM 2011 THROUGH 
2018’’ after ‘‘45-DAY PERIOD’’; and 
(B) by inserting ‘‘and ending with 2018’’ after ‘‘begin-
ning with 2011’’; and 
(2) by adding at the end the following new subparagraph: 
‘‘(G) 
CONTINUOUS
OPEN
ENROLLMENT
AND 
DISENROLLMENT FOR FIRST 3 MONTHS IN 2016 AND SUBSE-
QUENT YEARS.— 
‘‘(i) IN
GENERAL.—Subject to clause (ii) and 
subparagraph (D)— 
‘‘(I) in the case of an MA eligible individual 
who is enrolled in an MA plan, at any time during 
the first 3 months of a year (beginning with 2019); 
or 
‘‘(II) in the case of an individual who first 
becomes an MA eligible individual during a year 
(beginning with 2019) and enrolls in an MA plan, 
during the first 3 months during such year in 
which the individual is an MA eligible individual;
H. R. 34—302 
such MA eligible individual may change the election 
under subsection (a)(1). 
‘‘(ii) LIMITATION
OF
ONE
CHANGE
DURING
OPEN 
ENROLLMENT PERIOD EACH YEAR.—An individual may 
change the election pursuant to clause (i) only once 
during the applicable 3-month period described in such 
clause in each year. The limitation under this clause 
shall not apply to changes in elections effected during 
an annual, coordinated election period under para-
graph (3) or during a special enrollment period under 
paragraph (4). 
‘‘(iii) LIMITED
APPLICATION
TO
PART
D.—Clauses 
(i) and (ii) of this subparagraph shall only apply with 
respect to changes in enrollment in a prescription drug 
plan under part D in the case of an individual who, 
previous to such change in enrollment, is enrolled in 
a Medicare Advantage plan. 
‘‘(iv) LIMITATIONS ON MARKETING.— Pursuant to 
subsection (j), no unsolicited marketing or marketing 
materials may be sent to an individual described in 
clause (i) during the continuous open enrollment and 
disenrollment period established for the individual 
under such clause, notwithstanding marketing guide-
lines established by the Centers for Medicare & Med-
icaid Services.’’. 
SEC. 17006. ALLOWING END-STAGE RENAL DISEASE BENEFICIARIES 
TO CHOOSE A MEDICARE ADVANTAGE PLAN. 
(a) REMOVING PROHIBITION.— 
(1) IN GENERAL.—Section 1851(a)(3) of the Social Security 
Act (42 U.S.C. 1395w–21(a)(3)) is amended— 
(A) by striking subparagraph (B); and 
(B) by striking ‘‘ELIGIBLE INDIVIDUAL’’ and all that fol-
lows through ‘‘In this title, subject to subparagraph (B),’’ 
and inserting ‘‘ELIGIBLE INDIVIDUAL.—In this title,’’. 
(2) CONFORMING AMENDMENTS.— 
(A) Section 1852(b)(1) of the Social Security Act (42 
U.S.C. 1395w–22(b)(1)) is amended— 
(i) by striking subparagraph (B); and 
(ii) by striking ‘‘BENEFICIARIES’’ and all that follows 
through 
‘‘A 
Medicare+Choice 
organization’’ 
and 
inserting ‘‘BENEFICIARIES.—A Medicare Advantage 
organization’’. 
(B) Section 1859(b)(6) of the Social Security Act (42 
U.S.C. 1395w–28(b)(6)) is amended, in the last sentence, 
by striking ‘‘may waive’’ and all that follows through 
‘‘subparagraph and’’. 
(3) EFFECTIVE DATE.—The amendments made by this sub-
section shall apply with respect to plan years beginning on 
or after January 1, 2021. 
(b) EXCLUDING COSTS
FOR KIDNEY ACQUISITIONS FROM MA 
BENCHMARK.—Section 1853 of the Social Security Act (42 U.S.C. 
1395w–23) is amended— 
(1) in subsection (k)— 
(A) in paragraph (1)—
H. R. 34—303 
(i) in the matter preceding subparagraph (A), by 
striking ‘‘paragraphs (2) and (4)’’ and inserting ‘‘para-
graphs (2), (4), and (5)’’; and 
(ii) in subparagraph (B)(i), by striking ‘‘paragraphs 
(2) and (4)’’ and inserting ‘‘paragraphs (2), (4), and 
(5)’’; and 
(B) by adding at the end the following new paragraph: 
‘‘(5) EXCLUSION OF COSTS FOR KIDNEY ACQUISITIONS FROM 
CAPITATION RATES.—After determining the applicable amount 
for an area for a year under paragraph (1) (beginning with 
2021), the Secretary shall adjust such applicable amount to 
exclude from such applicable amount the Secretary’s estimate 
of the standardized costs for payments for organ acquisitions 
for kidney transplants covered under this title (including 
expenses covered under section 1881(d)) in the area for the 
year.’’; and 
(2) in subsection (n)(2)— 
(A) in subparagraph (A)(i), by inserting ‘‘and, for 2021 
and subsequent years, the exclusion of payments for organ 
acquisitions for kidney transplants from the capitation rate 
as described in subsection (k)(5)’’ before the semicolon at 
the end; 
(B) in subparagraph (E), in the matter preceding clause 
(i), by striking ‘‘subparagraph (F)’’ and inserting ‘‘subpara-
graphs (F) and (G)’’; and 
(C) by adding at the end the following new subpara-
graph: 
‘‘(G) APPLICATION
OF
KIDNEY
ACQUISITIONS
ADJUST-
MENT.—The base payment amount specified in subpara-
graph (E) for a year (beginning with 2021) shall be adjusted 
in the same manner under paragraph (5) of subsection 
(k) as the applicable amount is adjusted under such sub-
section.’’. 
(c) FFS COVERAGE OF KIDNEY ACQUISITIONS.— 
(1) IN GENERAL.—Section 1852(a)(1)(B)(i) of the Social Secu-
rity Act (42 U.S.C. 1395w–22(a)(1)(B)(i)) is amended by 
inserting ‘‘or coverage for organ acquisitions for kidney trans-
plants, including as covered under section 1881(d)’’ after ‘‘hos-
pice care’’. 
(2) CONFORMING AMENDMENT.—Section 1851(i) of the Social 
Security Act (42 U.S.C. 1395w–21(i)) is amended by adding 
at the end the following new paragraph: 
‘‘(3) FFS PAYMENT
FOR
EXPENSES
FOR
KIDNEY
ACQUISI-
TIONS.—Paragraphs (1) and (2) shall not apply with respect 
to expenses for organ acquisitions for kidney transplants 
described in section 1852(a)(1)(B)(i).’’. 
(3) EFFECTIVE DATE.—The amendments made by this sub-
section shall apply with respect to plan years beginning on 
or after January 1, 2021. 
(d) EVALUATION OF QUALITY.— 
(1) IN
GENERAL.—The Secretary of Health and Human 
Services (in this subsection referred to as the ‘‘Secretary’’) shall 
conduct an evaluation of whether the 5-star rating system 
based on the data collected under section 1852(e) of the Social 
Security Act (42 U.S.C. 1395w–22(e)) should include a quality 
measure specifically related to care for enrollees in Medicare
H. R. 34—304 
Advantage plans under part C of title XVIII of such Act deter-
mined to have end-stage renal disease. 
(2) PUBLIC AVAILABILITY.—Not later than April 1, 2020, 
the Secretary shall post on the Internet website of the Centers 
for Medicare & Medicaid Services the results of the evaluation 
under paragraph (1). 
(e) REPORT.—Not later than December 31, 2023, the Secretary 
of Health and Human Services (in this subsection referred to as 
the ‘‘Secretary’’) shall submit to Congress a report on the impact 
of the provisions of, and amendments made by, this section with 
respect to the following: 
(1) Spending under— 
(A) the original Medicare fee-for-service program under 
parts A and B of title XVIII of the Social Security Act; 
and 
(B) the Medicare Advantage program under part C 
of such title. 
(2) The number of enrollees determined to have end-stage 
renal disease— 
(A) in the original Medicare fee-for-service program; 
and 
(B) in the Medicare Advantage program. 
(3) The sufficiency of the amount of data under the original 
Medicare fee-for-service program for individuals determined to 
have end-stage renal disease for purposes of determining pay-
ment rates for end-stage renal disease under the Medicare 
Advantage program. 
(f) IMPROVEMENTS
TO RISK ADJUSTMENT UNDER MEDICARE 
ADVANTAGE.— 
(1) IN GENERAL.—Section 1853(a)(1) of the Social Security 
Act (42 U.S.C. 1395w–23(a)(1)) is amended— 
(A) in subparagraph (C)(i), by striking ‘‘The Secretary’’ 
and inserting ‘‘Subject to subparagraph (I), the Secretary’’; 
and 
(B) by adding at the end the following new subpara-
graph: 
‘‘(I) IMPROVEMENTS TO RISK ADJUSTMENT FOR 2019 AND 
SUBSEQUENT YEARS.— 
‘‘(i) IN GENERAL.—In order to determine the appro-
priate adjustment for health status under subpara-
graph (C)(i), the following shall apply: 
‘‘(I) TAKING INTO ACCOUNT TOTAL NUMBER OF 
DISEASES
OR
CONDITIONS.—The Secretary shall 
take into account the total number of diseases 
or conditions of an individual enrolled in an MA 
plan. The Secretary shall make an additional 
adjustment under such subparagraph as the 
number of diseases or conditions of an individual 
increases. 
‘‘(II) USING AT LEAST 2 YEARS OF DIAGNOSTIC 
DATA.—The Secretary may use at least 2 years 
of diagnosis data. 
‘‘(III) PROVIDING SEPARATE ADJUSTMENTS FOR 
DUAL
ELIGIBLE
INDIVIDUALS.—With respect to 
individuals who are dually eligible for benefits 
under this title and title XIX, the Secretary shall
H. R. 34—305 
make separate adjustments for each of the fol-
lowing: 
‘‘(aa) Full-benefit dual eligible individuals 
(as defined in section 1935(c)(6)). 
‘‘(bb) Such individuals not described in 
item (aa). 
‘‘(IV) EVALUATION
OF
MENTAL
HEALTH
AND 
SUBSTANCE USE DISORDERS.—The Secretary shall 
evaluate the impact of including additional diag-
nosis codes related to mental health and substance 
use disorders in the risk adjustment model. 
‘‘(V) EVALUATION
OF
CHRONIC
KIDNEY
DIS-
EASE.—The Secretary shall evaluate the impact 
of including the severity of chronic kidney disease 
in the risk adjustment model. 
‘‘(VI) EVALUATION OF PAYMENT RATES FOR END- 
STAGE
RENAL
DISEASE.—The 
Secretary 
shall 
evaluate whether other factors (in addition to those 
described in subparagraph (H)) should be taken 
into consideration when computing payment rates 
under such subparagraph. 
‘‘(ii) PHASED-IN IMPLEMENTATION.—The Secretary 
shall phase-in any changes to risk adjustment payment 
amounts 
under 
subparagraph 
(C)(i) 
under 
this 
subparagraph over a 3-year period, beginning with 
2019, with such changes being fully implemented for 
2022 and subsequent years. 
‘‘(iii) OPPORTUNITY FOR REVIEW AND PUBLIC COM-
MENT.—The Secretary shall provide an opportunity for 
review of the proposed changes to such risk adjustment 
payment amounts under this subparagraph and a 
public comment period of not less than 60 days before 
implementing such changes.’’. 
(2) STUDIES AND REPORTS.— 
(A) REPORTS ON THE RISK ADJUSTMENT SYSTEM.— 
(i) MEDPAC EVALUATION AND REPORT.— 
(I) 
EVALUATION.—The 
Medicare 
Payment 
Advisory Commission shall conduct an evaluation 
of the impact of the provisions of, and amendments 
made by, this section on risk scores for enrollees 
in Medicare Advantage plans under part C of title 
XVIII of the Social Security Act and payments 
to Medicare Advantage plans under such part, 
including the impact of such provisions and amend-
ments on the overall accuracy of risk scores under 
the Medicare Advantage program. 
(II) REPORT.—Not later than July 1, 2020, the 
Medicare Payment Advisory Commission shall 
submit to Congress a report on the evaluation 
under subclause (I), together with recommenda-
tions for such legislation and administrative action 
as the Commission determines appropriate. 
(ii) REPORTS BY SECRETARY OF HEALTH AND HUMAN 
SERVICES.—Not later than December 31, 2018, and 
every 3 years thereafter, the Secretary of Health and 
Human Services shall submit to Congress a report 
on the risk adjustment model and the ESRD risk
H. R. 34—306 
adjustment model under the Medicare Advantage pro-
gram under part C of title XVIII of the Social Security 
Act, including any revisions to either such model since 
the previous report. Such report shall include informa-
tion on how such revisions impact the predictive ratios 
under either such model for groups of enrollees in 
Medicare Advantage plans, including very high and 
very low cost enrollees, and groups defined by the 
number of chronic conditions of enrollees. 
(B) STUDY AND REPORT ON FUNCTIONAL STATUS.— 
(i) STUDY.—The Comptroller General of the United 
States (in this subparagraph referred to as the ‘‘Comp-
troller General’’) shall conduct a study on how to most 
accurately measure the functional status of enrollees 
in Medicare Advantage plans and whether the use 
of such functional status would improve the accuracy 
of risk adjustment payments under the Medicare 
Advantage program under part C of title XVIII of 
the Social Security Act. Such study shall include an 
analysis of the challenges in collecting and reporting 
functional status information for Medicare Advantage 
plans under such part, providers of services and sup-
pliers under the Medicare program, and the Centers 
for Medicare & Medicaid Services. 
(ii) REPORT.—Not later than June 30, 2018, the 
Comptroller General shall submit to Congress a report 
containing the results of the study under clause (i), 
together with recommendations for such legislation and 
administrative action as the Comptroller General 
determines appropriate. 
SEC. 17007. IMPROVEMENTS TO THE ASSIGNMENT OF BENEFICIARIES 
UNDER THE MEDICARE SHARED SAVINGS PROGRAM. 
Section 1899(c) of the Social Security Act (42 U.S.C. 1395jjj(c)) 
is amended— 
(1) by striking ‘‘utilization of primary’’ and inserting ‘‘utili-
zation of— 
‘‘(1) in the case of performance years beginning on or after 
April 1, 2012, primary’’; 
(2) in paragraph (1), as added by paragraph (1) of this 
section, by striking the period at the end and inserting ‘‘; 
and’’; 
(3) by adding at the end the following new paragraph: 
‘‘(2) in the case of performance years beginning on or after 
January 1, 2019, services provided under this title by a Feder-
ally qualified health center or rural health clinic (as those 
terms are defined in section 1861(aa)), as may be determined 
by the Secretary.’’. 
TITLE XVIII—OTHER PROVISIONS 
SEC. 18001. EXCEPTION FROM GROUP HEALTH PLAN REQUIREMENTS 
FOR 
QUALIFIED 
SMALL 
EMPLOYER 
HEALTH 
REIMBURSEMENT ARRANGEMENTS. 
(a) AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986 
AND THE PATIENT PROTECTION AND AFFORDABLE CARE ACT.—
H. R. 34—308 
‘‘(i) AMOUNT PRORATED IN CERTAIN CASES.—In the 
case of an individual who is not covered by an arrange-
ment for the entire year, the limitation under subpara-
graph (B)(iii) for such year shall be an amount which 
bears the same ratio to the amount which would (but 
for this clause) be in effect for such individual for 
such year under subparagraph (B)(iii) as the number 
of months for which such individual is covered by 
the arrangement for such year bears to 12. 
‘‘(ii) INFLATION ADJUSTMENT.—In the case of any 
year beginning after 2016, each of the dollar amounts 
in subparagraph (B)(iii) shall be increased by an 
amount equal to— 
‘‘(I) such dollar amount, multiplied by 
‘‘(II) the cost-of-living adjustment determined 
under section 1(f)(3) for the calendar year in which 
the taxable year begins, determined by sub-
stituting ‘calendar year 2015’ for ‘calendar year 
1992’ in subparagraph (B) thereof. 
If any dollar amount increased under the preceding 
sentence is not a multiple of $50, such dollar amount 
shall be rounded to the next lowest multiple of $50. 
‘‘(3) OTHER DEFINITIONS.—For purposes of this subsection— 
‘‘(A) ELIGIBLE EMPLOYEE.—The term ‘eligible employee’ 
means any employee of an eligible employer, except that 
the terms of the arrangement may exclude from consider-
ation employees described in any clause of section 
105(h)(3)(B) (applied by substituting ‘90 days’ for ‘3 years’ 
in clause (i) thereof). 
‘‘(B) ELIGIBLE EMPLOYER.—The term ‘eligible employer’ 
means an employer that— 
‘‘(i) is not an applicable large employer as defined 
in section 4980H(c)(2), and 
‘‘(ii) does not offer a group health plan to any 
of its employees. 
‘‘(C) PERMITTED BENEFIT.—The term ‘permitted benefit’ 
means, with respect to any eligible employee, the maximum 
dollar amount of payments and reimbursements which may 
be made under the terms of the qualified small employer 
health reimbursement arrangement for the year with 
respect to such employee. 
‘‘(4) NOTICE.— 
‘‘(A) IN GENERAL.—An employer funding a qualified 
small employer health reimbursement arrangement for any 
year shall, not later than 90 days before the beginning 
of such year (or, in the case of an employee who is not 
eligible to participate in the arrangement as of the begin-
ning of such year, the date on which such employee is 
first so eligible), provide a written notice to each eligible 
employee which includes the information described in 
subparagraph (B). 
‘‘(B) CONTENTS OF NOTICE.—The notice required under 
subparagraph (A) shall include each of the following: 
‘‘(i) A statement of the amount which would be 
such eligible employee’s permitted benefit under the 
arrangement for the year.
H. R. 34—309 
‘‘(ii) A statement that the eligible employee should 
provide the information described in clause (i) to any 
health insurance exchange to which the employee 
applies for advance payment of the premium assistance 
tax credit. 
‘‘(iii) A statement that if the employee is not cov-
ered under minimum essential coverage for any month 
the employee may be subject to tax under section 
5000A for such month and reimbursements under the 
arrangement may be includible in gross income.’’. 
(2) LIMITATION ON EXCLUSION FROM GROSS INCOME.—Sec-
tion 106 of such Code is amended by adding at the end the 
following: 
‘‘(g) QUALIFIED SMALL EMPLOYER HEALTH REIMBURSEMENT 
ARRANGEMENT.—For purposes of this section and section 105, pay-
ments or reimbursements from a qualified small employer health 
reimbursement arrangement (as defined in section 9831(d)) of an 
individual for medical care (as defined in section 213(d)) shall 
not be treated as paid or reimbursed under employer-provided 
coverage for medical expenses under an accident or health plan 
if for the month in which such medical care is provided the indi-
vidual does not have minimum essential coverage (within the 
meaning of section 5000A(f)).’’. 
(3) COORDINATION
WITH
HEALTH
INSURANCE
PREMIUM 
CREDIT.—Section 36B(c) of such Code is amended by adding 
at the end the following new paragraph: 
‘‘(4) SPECIAL
RULES
FOR
QUALIFIED
SMALL
EMPLOYER 
HEALTH REIMBURSEMENT ARRANGEMENTS.— 
‘‘(A) IN
GENERAL.—The term ‘coverage month’ shall 
not include any month with respect to an employee (or 
any spouse or dependent of such employee) if for such 
month the employee is provided a qualified small employer 
health reimbursement arrangement which constitutes 
affordable coverage. 
‘‘(B) DENIAL OF DOUBLE BENEFIT.—In the case of any 
employee who is provided a qualified small employer health 
reimbursement arrangement for any coverage month 
(determined without regard to subparagraph (A)), the credit 
otherwise allowable under subsection (a) to the taxpayer 
for such month shall be reduced (but not below zero) by 
the amount described in subparagraph (C)(i)(II) for such 
month. 
‘‘(C) AFFORDABLE COVERAGE.—For purposes of subpara-
graph (A), a qualified small employer health reimburse-
ment arrangement shall be treated as constituting afford-
able coverage for a month if— 
‘‘(i) the excess of— 
‘‘(I) the amount that would be paid by the 
employee as the premium for such month for self- 
only coverage under the second lowest cost silver 
plan offered in the relevant individual health 
insurance market, over 
‘‘(II) 1⁄12 of the employee’s permitted benefit 
(as defined in section 9831(d)(3)(C)) under such 
arrangement, does not exceed— 
‘‘(ii) 1⁄12 of 9.5 percent of the employee’s household 
income.
H. R. 34—310 
‘‘(D) QUALIFIED SMALL EMPLOYER HEALTH REIMBURSE-
MENT ARRANGEMENT.—For purposes of this paragraph, the 
term ‘qualified small employer health reimbursement 
arrangement’ has the meaning given such term by section 
9831(d)(2). 
‘‘(E) COVERAGE FOR LESS THAN ENTIRE YEAR.—In the 
case of an employee who is provided a qualified small 
employer health reimbursement arrangement for less than 
an entire year, subparagraph (C)(i)(II) shall be applied 
by substituting ‘the number of months during the year 
for which such arrangement was provided’ for ‘12’. 
‘‘(F) INDEXING.—In the case of plan years beginning 
in any calendar year after 2014, the Secretary shall adjust 
the 9.5 percent amount under subparagraph (C)(ii) in the 
same manner as the percentages are adjusted under sub-
section (b)(3)(A)(ii).’’. 
(4) APPLICATION OF EXCISE TAX ON HIGH COST EMPLOYER- 
SPONSORED HEALTH COVERAGE.— 
(A) IN GENERAL.—Section 4980I(f)(4) of such Code is 
amended by adding at the end the following: ‘‘Section 
9831(d)(1) shall not apply for purposes of this section.’’. 
(B) DETERMINATION OF COST OF COVERAGE.—Section 
4980I(d)(2) of such Code is amended by redesignating 
subparagraph (D) as subparagraph (E) and by inserting 
after subparagraph (C) the following new subparagraph: 
‘‘(D) QUALIFIED SMALL EMPLOYER HEALTH REIMBURSE-
MENT ARRANGEMENTS.—In the case of applicable employer- 
sponsored coverage consisting of coverage under any quali-
fied small employer health reimbursement arrangement 
(as defined in section 9831(d)(2)), the cost of coverage shall 
be equal to the amount described in section 6051(a)(15).’’. 
(5) ENFORCEMENT OF NOTICE REQUIREMENT.—Section 6652 
of such Code is amended by adding at the end the following 
new subsection: 
‘‘(o) FAILURE TO PROVIDE NOTICES WITH RESPECT TO QUALIFIED 
SMALL EMPLOYER HEALTH REIMBURSEMENT ARRANGEMENTS.—In 
the case of each failure to provide a written notice as required 
by section 9831(d)(4), unless it is shown that such failure is due 
to reasonable cause and not willful neglect, there shall be paid, 
on notice and demand of the Secretary and in the same manner 
as tax, by the person failing to provide such written notice, an 
amount equal to $50 per employee per incident of failure to provide 
such notice, but the total amount imposed on such person for 
all such failures during any calendar year shall not exceed $2,500.’’. 
(6) REPORTING.— 
(A) W–2 REPORTING.—Section 6051(a) of such Code 
is amended by striking ‘‘and’’ at the end of paragraph 
(13), by striking the period at the end of paragraph (14) 
and inserting ‘‘, and’’, and by inserting after paragraph 
(14) the following new paragraph: 
‘‘(15) the total amount of permitted benefit (as defined 
in section 9831(d)(3)(C)) for the year under a qualified small 
employer health reimbursement arrangement (as defined in 
section 9831(d)(2)) with respect to the employee.’’. 
(B) INFORMATION
REQUIRED
TO
BE
PROVIDED
BY 
EXCHANGE SUBSIDY APPLICANTS.—Section 1411(b)(3) of the 
Patient Protection and Affordable Care Act is amended
H. R. 34—311 
by redesignating subparagraph (B) as subparagraph (C) 
and by inserting after subparagraph (A) the following new 
subparagraph: 
‘‘(B) CERTAIN INDIVIDUAL HEALTH INSURANCE POLICIES 
OBTAINED THROUGH SMALL EMPLOYERS.—The amount of the 
enrollee’s 
permitted 
benefit 
(as 
defined 
in 
section 
9831(d)(3)(C) of the Internal Revenue Code of 1986) under 
a qualified small employer health reimbursement arrange-
ment (as defined in section 9831(d)(2) of such Code).’’. 
(7) EFFECTIVE DATES.— 
(A) IN GENERAL.—Except as otherwise provided in this 
paragraph, the amendments made by this subsection shall 
apply to years beginning after December 31, 2016. 
(B) TRANSITION
RELIEF.—The relief under Treasury 
Notice 2015–17 shall be treated as applying to any plan 
year beginning on or before December 31, 2016. 
(C) COORDINATION WITH HEALTH INSURANCE PREMIUM 
CREDIT.—The amendments made by paragraph (3) shall 
apply to taxable years beginning after December 31, 2016. 
(D) EMPLOYEE NOTICE.— 
(i) IN GENERAL.—The amendments made by para-
graph (5) shall apply to notices with respect to years 
beginning after December 31, 2016. 
(ii) TRANSITION RELIEF.—For purposes of section 
6652(o) of the Internal Revenue Code of 1986 (as added 
by this Act), a person shall not be treated as failing 
to provide a written notice as required by section 
9831(d)(4) of such Code if such notice is so provided 
not later than 90 days after the date of the enactment 
of this Act. 
(E) W–2 REPORTING.—The amendments made by para-
graph (6)(A) shall apply to calendar years beginning after 
December 31, 2016. 
(F) INFORMATION
PROVIDED
BY
EXCHANGE
SUBSIDY 
APPLICANTS.— 
(i) IN GENERAL.—The amendments made by para-
graph (6)(B) shall apply to applications for enrollment 
made after December 31, 2016. 
(ii) VERIFICATION.—Verification under section 1411 
of the Patient Protection and Affordable Care Act of 
information provided under section 1411(b)(3)(B) of 
such Act shall apply with respect to months beginning 
after October 2016. 
(iii) TRANSITIONAL
RELIEF.—In the case of an 
application for enrollment under section 1411(b) of the 
Patient Protection and Affordable Care Act made before 
April 1, 2017, the requirement of section 1411(b)(3)(B) 
of such Act shall be treated as met if the information 
described therein is provided not later than 30 days 
after the date on which the applicant receives the 
notice described in section 9831(d)(4) of the Internal 
Revenue Code of 1986. 
(8) SUBSTANTIATION REQUIREMENTS.—The Secretary of the 
Treasury (or his designee) may issue substantiation require-
ments as necessary to carry out this subsection. 
(b) AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME SECU-
RITY ACT OF 1974.—
H. R. 34—312 
(1) IN GENERAL.—Section 733(a)(1) of the Employee Retire-
ment Income Security Act of 1974 (29 U.S.C. 1191b(a)(1)) is 
amended by adding at the end the following: ‘‘Such term shall 
not include any qualified small employer health reimbursement 
arrangement (as defined in section 9831(d)(2) of the Internal 
Revenue Code of 1986).’’. 
(2) EXCEPTION
FROM
CONTINUATION
COVERAGE
REQUIRE-
MENTS, ETC.—Section 607(1) of such Act (29 U.S.C. 1167(1)) 
is amended by adding at the end the following: ‘‘Such term 
shall not include any qualified small employer health 
reimbursement arrangement (as defined in section 9831(d)(2) 
of the Internal Revenue Code of 1986).’’. 
(3) EFFECTIVE DATE.—The amendments made by this sub-
section shall apply to plan years beginning after December 
31, 2016. 
(c) AMENDMENTS TO THE PUBLIC HEALTH SERVICE ACT.— 
(1) IN GENERAL.—Section 2791(a)(1) of the Public Health 
Service Act (42 U.S.C. 300gg–91(a)(1)) is amended by adding 
at the end the following: ‘‘Except for purposes of part C of 
title XI of the Social Security Act (42 U.S.C. 1320d et seq.), 
such term shall not include any qualified small employer health 
reimbursement arrangement (as defined in section 9831(d)(2) 
of the Internal Revenue Code of 1986).’’. 
(2) EXCEPTION
FROM
CONTINUATION
COVERAGE
REQUIRE-
MENTS.—Section 2208(1) of the Public Health Service Act (42 
U.S.C. 300bb–8(1)) is amended by adding at the end the fol-
lowing: ‘‘Such term shall not include any qualified small 
employer health reimbursement arrangement (as defined in 
section 9831(d)(2) of the Internal Revenue Code of 1986).’’. 
(3) EFFECTIVE DATE.—The amendments made by this sub-
section shall apply to plan years beginning after December 
31, 2016. 
Speaker of the House of Representatives. 
Vice President of the United States and
President of the Senate.