I 
114TH CONGRESS 
2D SESSION 
H. R. 5841 
To amend title XVIII of the Social Security Act to establish a population 
based payment demonstration project under which Patient Care Networks 
are paid prospective monthly capitated payments for coordinated care 
furnished to Medicare beneficiaries. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 14, 2016 
Mr. KELLY of Pennsylvania (for himself and Mr. NEAL) introduced the fol-
lowing 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 consider-
ation of such provisions as fall within the jurisdiction of the committee 
concerned 
A BILL 
To amend title XVIII of the Social Security Act to establish 
a population based payment demonstration project under 
which Patient Care Networks are paid prospective 
monthly capitated payments for coordinated care fur-
nished to Medicare beneficiaries. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
VerDate Sep 11 2014 
02:10 Jul 29, 2016
Jkt 059200
PO 00000
Frm 00001
Fmt 6652
Sfmt 6201
E:\BILLS\H5841.IH
H5841
SSpencer on DSK4SPTVN1PROD with BILLS
SECTION 1. POPULATION BASED PAYMENT DEMONSTRA-
TION PROJECT. 
Title XVIII of the Social Security Act (42 U.S.C. 
1395x et seq.) is amended by adding at the end the fol-
lowing new section: 
‘‘SEC. 1899C. POPULATION BASED PAYMENT DEMONSTRA-
TION PROJECT. 
‘‘(a) IN GENERAL.—Beginning not later than Janu-
ary 1, 2017, the Secretary shall establish a 5-year Popu-
lation Based Payment Demonstration Project (in this sec-
tion referred to as the ‘demonstration project’) to promote 
efficiency of care and improve health outcomes for Medi-
care fee-for-service beneficiaries (as defined in subsection 
(m)). Under the demonstration project, providers of serv-
ices and suppliers may, in accordance with the subsequent 
subsections of this section, form Patient Care Networks 
(in this section referred to as ‘PCNs’)— 
‘‘(1) through which providers of services and 
suppliers shall furnish items and services for which 
payment would otherwise be made under parts A 
and B to participating beneficiaries, as defined in 
subsection (m); 
‘‘(2) which shall, with respect to participating 
beneficiaries of such PCN, provide for payment, in 
accordance with subsection (b)(2)(C), for all items 
and services for which payment would otherwise be 
VerDate Sep 11 2014 
02:10 Jul 29, 2016
Jkt 059200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6201
E:\BILLS\H5841.IH
H5841
SSpencer on DSK4SPTVN1PROD with BILLS
made under parts A and B furnished to such bene-
ficiaries; and 
‘‘(3) to which the Secretary shall prospectively 
make, instead of any other payment that would oth-
erwise be made under such parts for such items and 
services furnished to such participating beneficiaries, 
capitated payments in accordance with subsection 
(d), for each month during a year for which the 
PCN participates in the demonstration project for 
all such items and services furnished to such partici-
pating beneficiaries. 
‘‘(b) PATIENT CARE NETWORKS.— 
‘‘(1) ELIGIBLE
PCNS.—Subject to the suc-
ceeding provisions of this subsection, as determined 
appropriate by the Secretary, a group composed of 
at least the following providers of services and sup-
pliers which has established a mechanism for shared 
governance is eligible to enter into agreement under 
paragraph (2) to participate as a PCN under the 
demonstration program under this section: 
‘‘(A) Physicians (as defined in section 
1861(r)(1)) and practitioners (as described in 
section 1842(b)(18)(C)(i)) in group practice ar-
rangements. 
‘‘(B) At least one hospital. 
VerDate Sep 11 2014 
02:10 Jul 29, 2016
Jkt 059200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6201
E:\BILLS\H5841.IH
H5841
SSpencer on DSK4SPTVN1PROD with BILLS
‘‘(C) Federally qualified health center (as 
defined in section 1861(aa)(4)). 
‘‘(D) Such other providers of services and 
suppliers as the Secretary determines appro-
priate. 
‘‘(2) REQUIREMENTS.—A PCN shall meet the 
following requirements to participate in the dem-
onstration project: 
‘‘(A) The PCN shall be an integrated sys-
tem of care which directly provides items and 
services under parts A and B. 
‘‘(B) The PCN shall employ and enter into 
appropriate contractual arrangements— 
‘‘(i) with a sufficient number, as de-
termined by the Secretary, of primary care 
physicians to furnish items and services 
described in subparagraph (A) to at least 
twenty 
thousand 
participating 
bene-
ficiaries; and 
‘‘(ii) agree to enter into appropriate 
contractual arrangements to establish a 
network of providers of services and sup-
pliers to provide sufficient access for par-
ticipating beneficiaries with respect to such 
PCN to items and services for which pay-
VerDate Sep 11 2014 
02:10 Jul 29, 2016
Jkt 059200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6201
E:\BILLS\H5841.IH
H5841
SSpencer on DSK4SPTVN1PROD with BILLS
ment may otherwise be made under parts 
A and B. 
‘‘(C) The PCN shall, subject to paragraph 
(5), be responsible for— 
‘‘(i) payment to providers of services 
and suppliers participating in or otherwise 
entering into agreements with the PCN for 
items and services furnished to partici-
pating beneficiaries with respect to such 
PCN, in such amounts as specified by the 
PCN for such items and services; and 
‘‘(ii) payment to providers of services 
and suppliers not described in clause (i) 
for items and services furnished to partici-
pating beneficiaries with respect to such 
PCN, in such amounts as specified by the 
PCN for such items and services furnished 
by a provider of services or supplier that is 
described in such clause. 
‘‘(D) The PCN shall be willing to become 
accountable for the quality, cost, and overall 
care of participating beneficiaries with respect 
to such PCN. 
‘‘(E) The PCN shall enter into an agree-
ment with the Secretary under paragraph (3). 
VerDate Sep 11 2014 
02:10 Jul 29, 2016
Jkt 059200
PO 00000
Frm 00005
Fmt 6652
Sfmt 6201
E:\BILLS\H5841.IH
H5841
SSpencer on DSK4SPTVN1PROD with BILLS
‘‘(F) The PCN shall have a formal legal 
structure that would allow the organization to 
receive and distribute payments made to the 
PCN under subsection (d) to participating pro-
viders of services and suppliers. 
‘‘(G) The PCN shall provide the Secretary 
with such information regarding providers of 
services and suppliers participating in the PCN 
as the Secretary determines necessary to sup-
port the assignment of Medicare fee-for-service 
beneficiaries to a PCN, the implementation of 
quality requirements under subsection (f), other 
reporting requirements, and the determination 
of payments to the PCN under subsection (d). 
‘‘(H) The PCN shall have in place a lead-
ership and management structure that includes 
clinical and administrative systems. 
‘‘(I) The PCN shall provide for beneficiary 
protections for Medicare fee-for-service bene-
ficiaries participating in such PCN under the 
demonstration, including with respect to net-
work adequacy, appeals rights, and out-of-pock-
et costs. 
‘‘(3) PARTICIPATION AGREEMENT.— 
VerDate Sep 11 2014 
02:10 Jul 29, 2016
Jkt 059200
PO 00000
Frm 00006
Fmt 6652
Sfmt 6201
E:\BILLS\H5841.IH
H5841
SSpencer on DSK4SPTVN1PROD with BILLS