I 
115TH CONGRESS 
1ST SESSION H. R. 4580 
To amend title XVIII of the Social Security Act to improve the Medicare 
accountable care organization (ACO) program, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
DECEMBER 6, 2017 
Mr. WELCH (for himself and Mrs. BLACK) 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 improve 
the Medicare accountable care organization (ACO) pro-
gram, 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 ‘‘ACO Improvement Act 
of 2017’’. 
SEC. 2. MEDICARE ACO PROGRAM IMPROVEMENTS. 
(a) IMPROVING
OUTCOMES
THROUGH
GREATER 
BENEFICIARY ENGAGEMENT.— 
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(1) IN GENERAL.—Section 1899 of the Social 
Security Act (42 U.S.C. 1395jjj) is amended by add-
ing at the end the following new subsection: 
‘‘(l) IMPROVING OUTCOMES THROUGH GREATER 
BENEFICIARY ENGAGEMENT.— 
‘‘(1) USE OF BENEFICIARY INCENTIVES.—Sub-
ject to approval of the Secretary, the Secretary shall 
permit an ACO— 
‘‘(A) to reduce or eliminate cost-sharing 
otherwise applicable under part B for some or 
all primary care services (as identified by the 
ACO) furnished by health care professionals 
(including, as applicable, professionals fur-
nishing services through a rural health clinic or 
Federally qualified health center) within the 
network of the ACO; and 
‘‘(B) to develop additional incentives to en-
courage patient engagement and participation 
in their own wellness. 
The cost of the incentives under this paragraph shall 
be borne by the ACO and shall not affect the pay-
ments to the ACO under subsection (d). 
‘‘(2) FOSTERING STRONGER PATIENT-PROVIDER 
TIES.— 
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‘‘(A) PERMITTING
PROSPECTIVE
ASSIGN-
MENT
OF
BENEFICIARIES.—In carrying out 
subsection (c) with respect to any agreement 
with an ACO under this section, the ACO may 
elect under any such agreement prospective as-
signment of Medicare fee-for-service bene-
ficiaries before the beginning of a year to the 
ACO and a primary care ACO professional. 
‘‘(B) INCLUSION OF ACO INFORMATION IN 
WELCOME
TO
MEDICARE
VISIT
AND
ANNUAL 
WELLNESS VISITS.—The Secretary may encour-
age a primary care ACO professional to include, 
as part of the initial preventive physical exam-
ination under section 1861(ww)(1) or personal-
ized prevention plan services under section 
1861(hhh)(1) for a Medicare fee-for-service 
beneficiary assigned to that professional under 
this section, to provide the beneficiary with in-
formation concerning the ACO program under 
this section, including information on any cost- 
sharing reductions allowed under this section. 
‘‘(3) MOVING FROM VOLUME TO VALUE.—Sub-
ject to paragraph (4)— 
‘‘(A) REGULATORY
RELIEF
FOR
MOVING 
TO TWO-SIDED RISK.—In the case of an ACO 
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that has elected a two-sided risk model (as pro-
vided for under regulations), in addition to the 
authority provided under paragraph (1), the 
Secretary shall provide the following regulatory 
relief: 
‘‘(i) 3-DAY
PRIOR
HOSPITALIZATION 
WAIVER
FOR
SNF
SERVICES.—Waiver of 
the 3-day prior hospitalization requirement 
for coverage of skilled nursing facility serv-
ices. 
‘‘(ii) 
HOMEBOUND
REQUIREMENT 
WAIVER FOR HOME HEALTH SERVICES.— 
Waiver of the homebound requirement for 
coverage of home health services. 
‘‘(B) IMPROVING
CARE
COORDINATION 
THROUGH ACCESS TO TELEHEALTH.— 
‘‘(i) FLEXIBILITY
IN
FURNISHING 
TELEHEALTH SERVICES.—In applying sec-
tion 1834(m) in the case of an ACO, the 
Secretary shall grant a waiver, and the 
ACO may elect, to have the limitations on 
originating site (under paragraph (4)(C) of 
such section) and on the use of store-and- 
forward technologies (under paragraph (1) 
of such section) not apply. The previous 
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sentence shall not be construed as affect-
ing the authority of the Secretary under 
subsection (f) to waive other provisions of 
such section. 
‘‘(ii) PROVISION
OF
REMOTE
MONI-
TORING
IN
CONNECTION
WITH
HOME 
HEALTH SERVICES.—Nothing in this sec-
tion shall be construed as preventing an 
ACO from paying for remote patient moni-
toring and home-based video conferencing 
services in connection with the provision of 
home health services (under conditions for 
which payment for such services would not 
be made under section 1895 for such serv-
ices) in a manner that is financially not 
more expensive than the furnishing of a 
home health visit. 
‘‘(C) MOVING
UP
RISK
TRACK
ANNU-
ALLY.—Each year of an agreement period, the 
Secretary shall permit an ACO to make an elec-
tion to assume greater risk. 
‘‘(4) DISCRETIONARY REVOCATION.—The Sec-
retary may revoke, at the Secretary’s discretion, a 
waiver granted under paragraph (3). 
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‘‘(5) PROVISIONS FOR SHARING OF INTERNAL 
COST SAVINGS.— 
‘‘(A) IN
GENERAL.—Subject to the suc-
ceeding provisions of this paragraph, the Sec-
retary shall permit an ACO to distribute inter-
nal cost savings among ACO participants pur-
suant to an internal cost savings sharing ar-
rangement if the arrangement meets the re-
quirements of subparagraph (B) and the ACO 
meets the reporting requirements of subpara-
graph (C) with respect to such arrangement. 
‘‘(B) REQUIREMENTS
RELATING
TO
DE-
SIGN OF ARRANGEMENT.—The requirements of 
this subparagraph for an internal cost savings 
sharing arrangement of an ACO are as follows: 
‘‘(i) NO
REDUCTION
IN
MEDICALLY 
NECESSARY CARE.—ACO participants may 
not reduce or limit medically necessary 
items and services furnished to Medicare 
fee-for-service beneficiaries. 
‘‘(ii) VOLUNTARY
PARTICIPATION.— 
Participation by providers of services and 
suppliers in the arrangement is voluntary. 
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‘‘(iii) TRANSPARENCY.—The arrange-
ment is transparent and subject to audit 
by the Secretary. 
‘‘(iv) QUALITY OF CARE.—ACO par-
ticipants participating in the arrangement 
meet quality performance standards estab-
lished by the Secretary under subsection 
(b)(3). 
‘‘(v) PAYMENT METHODOLOGY.—Dis-
tributions of internal cost savings under 
the arrangement is not based on the vol-
ume or value of referrals or business other-
wise generated. 
‘‘(C) REPORTING
REQUIREMENTS.—The 
requirements of this subparagraph for an ar-
rangement of an ACO is that the ACO provides 
the following information to the Secretary for 
purposes of evaluating the arrangement: 
‘‘(i) METHODOLOGY.—The method-
ology for distributions of internal cost sav-
ings under the arrangement among all 
ACO participants, including the frequency 
of and the criteria for such distributions. 
‘‘(ii) CARE REDESIGN.—A detailed ex-
planation of how the arrangement will 
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achieve improved quality and patient expe-
rience, as well as the anticipated cost sav-
ings. 
‘‘(iii) ELIGIBILITY TO PARTICIPATE IN 
ARRANGEMENT.—The criteria for partici-
pation by ACO participants, particularly 
professionals, in the arrangement. 
‘‘(iv) DISTRIBUTION
PLAN.—A com-
prehensive plan for distributions of inter-
nal cost savings under the arrangement. 
‘‘(D) WAIVERS.—The Secretary shall waive 
such provisions of this title and title XI as may 
be necessary to carry out this paragraph. 
‘‘(E) DEFINITIONS.—In this paragraph: 
‘‘(i) INTERNAL COST SAVINGS SHAR-
ING
ARRANGEMENT.—The term ‘internal 
cost savings sharing arrangement’ means 
an arrangement among ACO participants 
of an ACO for the distributions of internal 
cost savings to such ACO participants, in-
cluding to ACO professionals, solely from 
gains or savings that are a direct result of 
collaborative efforts among ACO partici-
pants of an ACO to improve the quality 
and efficiency of care furnished to Medi-
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care fee-for-service beneficiaries, but does 
not include shared savings under sub-
section (d)(2). 
‘‘(ii) DISTRIBUTION
OF
INTERNAL 
COST SAVINGS.—The term ‘distribution of 
internal cost savings’ means a payment of 
a percentage of the gains or savings from 
an internal cost savings sharing arrange-
ment to ACO participants. 
‘‘(iii) ACO PARTICIPANTS.—The term 
‘ACO participants’ means providers of 
services and suppliers participating in an 
ACO who voluntarily participate in an in-
ternal cost savings sharing arrangement 
under this paragraph.’’. 
(2) EFFECTIVE DATE.—The amendment made 
by paragraph (1) shall apply as if included in the 
enactment of section 3022 of Public Law 111–148. 
(3) CONFORMING AMENDMENT.—Effective as if 
included in the enactment of section 3021 of Public 
Law 111–148, the provisions of section 1899(l)(5) of 
the Social Security Act (relating to authority for dis-
tributions of internal cost savings under internal 
cost savings sharing arrangements), as added by 
paragraph (1), shall apply to participants in ac-
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countable care organization payment and service de-
livery models (and other appropriate models) tested 
pursuant to section 1115A of the Social Security Act 
(42 U.S.C. 1315a). 
(b) STUDY AND REPORT ON FEASIBILITY ON PRO-
VIDING ELECTRONIC ACCESS
TO MEDICARE CLAIMS 
DATA.— 
(1) STUDY.—The Secretary of Health and 
Human Services shall conduct a study regarding the 
feasibility of establishing a system of electronic ac-
cess of providers of services and suppliers to in-proc-
ess and complete patient claims data. Such system 
may be a modification of an existing database, such 
as the Virtual Research Data Center. The study 
shall take into account the measures needed to en-
sure the security and privacy of beneficiary and pro-
vider information. 
(2) REPORT.—Not later than six months after 
the date of the enactment of this Act, the Secretary 
shall submit to Congress a report on such study. 
The Secretary shall include in such report such rec-
ommendations as the Secretary deems appropriate. 
(c) PERMITTING DE MINIMIS VARIATION FROM MIN-
IMUM
ENROLLMENT
REQUIREMENT.—Section 
1899(b)(2)(D) of the Social Security Act (42 U.S.C. 
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1395jjj(b)(2)(D)) is amended by inserting before the pe-
riod at the end the following: ‘‘, except that the Secretary 
may permit an ACO with fewer than 5,000 participants 
by a de minimis number (not to exceed 100) to be eligible 
to continue to participate in cases where such fewer num-
ber does not negatively impact the ACO’s participation in 
the program and the ACO meets other conditions to be 
so eligible’’. 
(d) PAYMENTS
FOR
SHARED
SAVINGS.—Section 
1899(d)(2) of the Social Security Act (42 U.S.C. 
1395jjj(d)(2)) is amended by adding at the end the fol-
lowing: ‘‘For years beginning on or after January 1, 2018, 
the Secretary may use a sliding scale to increase by up 
to 10 percentage points the appropriate percent otherwise 
applied under this paragraph for an ACO that achieves 
the median of quality performance standards, or achieves 
quality improvement scores above such median, estab-
lished under subsection (b)(3). The Secretary shall not de-
crease such appropriate percent otherwise applied to an 
ACO because of the application of an increase under the 
previous sentence for another ACO.’’. 
(e) DEMONSTRATION FOR ALLOWING GROWTH OF 
HCC SCORES.—Section 1899(d)(1)(B)(ii) of the Social 
Security Act (42 U.S.C. 1395jjj(d)(1)(B)(ii)) is amended 
by adding at the end the following: ‘‘In carrying out this 
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subsection, the Secretary shall establish a 3-year dem-
onstration project that develops and applies a method-
ology, similar to the Medicare Advantage normalization 
factor applied under section 1853(a)(3), that allows 
growth of HCC scores for those who are continuously en-
rolled with an ACO. The Secretary shall submit to Con-
gress a report on the results of such demonstration 
project.’’. 
(f) CREATING INCENTIVES
FOR ACO DEVELOP-
MENT.—The Secretary of Health and Human Services 
may develop a mechanism to make permanent those ACO- 
related pilot programs, including the Advance Payment 
ACO Model, that the Secretary determines have been suc-
cessful. The Secretary shall submit to Congress a report 
on the mechanism and shall include in the report such rec-
ommendations, including such changes in legislation, as 
the Secretary determines appropriate. 
Æ 
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