I 
114TH CONGRESS 
1ST SESSION H. R. 2570 
To establish a demonstration program requiring the utilization of Value- 
Based Insurance Design to demonstrate that reducing the copayments 
or coinsurance charged to Medicare beneficiaries for selected high-value 
prescription medications and clinical services can increase their utilization 
and ultimately improve clinical outcomes and lower health care expendi-
tures. 
IN THE HOUSE OF REPRESENTATIVES 
MAY 22, 2015 
Mrs. BLACK (for herself, Mr. BLUMENAUER, and Mrs. MCMORRIS RODGERS) 
introduced the following bill; which was referred to the Committee on 
Ways and Means, and in addition to the Committee on Energy and Com-
merce, for a period to be subsequently determined by the Speaker, in 
each case for consideration of such provisions as fall within the jurisdic-
tion of the committee concerned 
A BILL 
To establish a demonstration program requiring the utiliza-
tion of Value-Based Insurance Design to demonstrate 
that reducing the copayments or coinsurance charged 
to Medicare beneficiaries for selected high-value prescrip-
tion medications and clinical services can increase their 
utilization and ultimately improve clinical outcomes and 
lower health care expenditures. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
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SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Value Based Insurance 
Design for Better Care Act of 2015’’ or the ‘‘VBID for 
Better Care Act of 2015’’. 
SEC. 2. FINDINGS. 
Congress makes the following findings: 
(1) A growing body of evidence demonstrates 
that increases in patient-level financial barriers (in-
cluding deductibles, copayments, and coinsurance) 
for high-value medical services (such as prescription 
medications, clinician visits, diagnostic tests, and 
procedures) systematically reduce their use. Savings 
attributable to cost-related decreased utilization of 
specific services may lead to an increase in total 
medical expenditures due to increased use of other 
related clinical services, such as hospitalizations and 
emergency room visits. 
(2) Empirical research studies demonstrate that 
reductions in beneficiary out-of-pocket expenses for 
high-value prescription medications and clinical serv-
ices can mitigate the adverse health and financial 
consequences attributable to cost-related decreased 
utilization of high-value services. 
(3) Financial barriers to prescription medica-
tions and clinical services that are deemed to be 
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high-value should be reduced or eliminated to in-
crease their use. 
(4) Value-Based Insurance Design is a method-
ology that adjusts patient out-of-pocket costs for 
prescription medications and clinical services accord-
ing to the clinical value—not exclusively the cost. 
Value-Based Insurance Design is based on the con-
cept of clinical nuance that recognizes— 
(A) prescription medications and clinical 
services differ in the clinical benefit provided; 
and 
(B) the clinical benefit derived from a spe-
cific prescription medication or clinical service 
depends on the clinical situation, the provider, 
and where the care is delivered. 
(5) The current ‘‘one-size-fits-all’’ copayment or 
coinsurance design for prescription medications and 
clinical services provided under the Medicare pro-
gram does not recognize the well-established value 
differences in health outcomes produced by various 
medical interventions. 
(6) The establishment by Medicare of copay-
ment and coinsurance requirements using Value- 
Based Insurance Design methodologies will improve 
patient-centered health outcomes, enhance personal 
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responsibility, and afford a more efficient use of tax-
payer dollars. 
SEC. 3. DEMONSTRATION PROGRAM. 
(a) IN GENERAL.—The Secretary of Health and 
Human Services (in this section referred to as the ‘‘Sec-
retary’’) shall establish a 3-year demonstration program 
to test the use of value-based insurance design methodolo-
gies (as defined in subsection (c)(1)) under eligible Medi-
care Advantage plans offered by Medicare Advantage or-
ganizations under part C of title XVIII of the Social Secu-
rity Act (42 U.S.C. 1395w–21 et seq.). 
(b) DEMONSTRATION PROGRAM DESIGN.— 
(1) SELECTION
OF
MEDICARE
ADVANTAGE 
SITES
AND
ELIGIBLE
MEDICARE
ADVANTAGE 
PLANS.—Not later than two years after the date of 
the enactment of this Act, the Secretary shall— 
(A) select at least two Medicare Advantage 
sites with respect to which to conduct the dem-
onstration program under this section; and 
(B) approve eligible Medicare Advantage 
plans to participate in such demonstration pro-
gram. 
In selecting Medicare Advantage sites under sub-
paragraph (A), the Secretary shall take into account 
area differences as well as the availability of health 
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maintenance organization plans and preferred pro-
vider organization plans offered in such sites. 
(2) START
OF
DEMONSTRATION.—The dem-
onstration program shall begin not later than the 
third plan year beginning after the date of the en-
actment of this Act. 
(3) ELIGIBLE MEDICARE ADVANTAGE PLANS.— 
For purposes of this section, the term ‘‘eligible 
Medicare Advantage plan’’ means a Medicare Ad-
vantage plan under part C of title XVIII of the So-
cial Security Act (42 U.S.C. 1395w–21 et seq.) that 
meets the following requirements: 
(A) The plan is an Medicare Advantage re-
gional plan (as defined in paragraph (4) of sec-
tion 1859(b) of such Act (42 U.S.C. 1395w– 
28(b))) or Medicare Advantage local plan (as 
defined in paragraph (5) of such section) of-
fered in the Medicare Advantage region selected 
under paragraph (1)(A). 
(B) The plan has— 
(i)(I) a quality rating under section 
1853(n)(4) of such Act (42 U.S.C. 1395w– 
23(n)(4)) of 4 stars or higher based on the 
most recent data available for such year, 
or 
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(II) in the case of a specialized Medi-
care Advantage plan for special needs indi-
viduals, 
as 
defined 
in 
section 
1859(b)(6)(A) of such Act (42 U.S.C. 
1395w–28(b)(6)(A)), 
a 
quality 
rating 
under 1853(n)(4) of such Act (42 U.S.C. 
1395w–23(n)(4)) equal to or higher than 
the national average for special needs 
plans (excluding Institutional-Special needs 
plans) based on the most recent data avail-
able for such year; and 
(ii) at least 20 percent of the popu-
lation to whom the plan is offered consists 
of subsidy eligible individuals (as defined 
in section 1860D–14(a)(3)(A) of the Social 
Security 
Act 
(42 
U.S.C. 
1395w– 
114(a)(3)(A))). 
(4) DISCLOSURE TO BENEFICIARIES.—The Sec-
retary shall provide to each individual eligible to en-
roll under a Medicare Advantage plan approved to 
participate under the demonstration program during 
a plan year for which the plan is so selected— 
(A) notification that the plan is partici-
pating in such demonstration program; 
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(B) background information on the dem-
onstration program; 
(C) clinical data derived from the studies 
resulting from the demonstration program; and 
(D) notification of the potential benefits 
that the individual will receive, and of the other 
potential impacts that the individual will experi-
ence, on account of the participation of the plan 
in the demonstration program. 
(c) VALUE-BASED INSURANCE DESIGN METHODOLO-
GIES.— 
(1) DEFINITION.—For purposes of this section, 
the term ‘‘value-based insurance design method-
ology’’ means a methodology for identifying specific 
prescription medications, and clinical services that 
are payable under title XVIII of the Social Security 
Act, for which copayments, coinsurance, or both, 
would improve the management of specific chronic 
clinical conditions because of the high value and ef-
fectiveness of such medications and services for such 
specific chronic clinical conditions, as approved by 
the Secretary. 
(2) USE OF METHODOLOGIES TO REDUCE CO-
PAYMENTS AND COINSURANCE.—A Medicare Advan-
tage organization offering an eligible Medicare Ad-
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vantage plan approved to participate under the dem-
onstration program, for each plan year for which the 
plan is so selected and using value-based insurance 
design methodologies— 
(A) shall identify each prescription medica-
tion and clinical service covered under such 
plan for which the plan proposes to reduce or 
eliminate the copayment or coinsurance, with 
respect to the management of specific chronic 
clinical conditions (as specified by the Sec-
retary) of Medicare Advantage eligible individ-
uals (as defined in section 1851(a)(3) of the 
Social 
Security 
Act 
(42 
U.S.C. 
1395w– 
21(a)(3))) enrolled under such plans, for such 
plan year; 
(B) may, for such plan year, reduce or 
eliminate copayments, coinsurance, or both for 
such prescription medication and clinical serv-
ices so identified with respect to the manage-
ment of such conditions of such individuals— 
(i) if such reduction or elimination is 
evidence-based and for the purpose of en-
couraging such individuals in such plan to 
use such prescription medications and clin-
ical services (such as preventive care, pri-
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mary care, specialty visits, diagnostic tests, 
procedures, and durable medical equip-
ment) with respect to such conditions; and 
(ii) for the purpose of encouraging 
such individuals in such plan to use health 
care providers that such organization has 
identified with respect to such plan year as 
being high value providers; and 
(C) if a reduction or elimination is applied 
pursuant to subparagraph (B), with respect to 
such medication and clinical services, shall, for 
such plan year, count toward the deductible ap-
plicable to such individual under such plan 
amounts that would have been payable by the 
individual as copayment or coinsurance for such 
medication and services if the reduction or 
elimination had not been applied. 
(3) PROHIBITION
OF
INCREASES
OF
COPAY-
MENTS AND COINSURANCE.—In no case may any 
Medicare Advantage plan participating in the dem-
onstration program increase, for any plan year for 
which the plan is so participating, the amount of co-
payments or coinsurance for any item or service cov-
ered under such plan for purposes of discouraging 
the use of such item or service. 
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(d) REPORT ON IMPLEMENTATION.— 
(1) IN GENERAL.—Not later than 1 year after 
the date on which the demonstration program under 
this section begins under subsection (b)(2), the Sec-
retary shall submit to Congress a report on the sta-
tus of the implementation of the demonstration pro-
gram. 
(2) ELEMENTS.—The report required by para-
graph (1) shall, with respect to eligible Medicare Ad-
vantage plans participating in the demonstration 
program for the first plan year of such program, in-
clude the following: 
(A) A list of each medication and service 
identified pursuant to subsection (c)(2)(A) for 
such plan with respect to such plan year. 
(B) For each such medication or service so 
identified, the amount of the copayment or co-
insurance required under such plan with respect 
to such plan year for such medication or service 
and the amount of the reduction of such copay-
ment or coinsurance from a previous plan year. 
(C) For each provider identified pursuant 
to subsection (c)(2)(B)(ii) for such plan with 
respect to such plan year, a statement of the 
amount of the copayment or coinsurance re-
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quired under such plan with respect to such 
plan year and the amount of the reduction of 
such copayment or coinsurance from the pre-
vious plan year. 
(e) REVIEW AND ASSESSMENT OF UTILIZATION OF 
VALUE-BASED INSURANCE DESIGN METHODOLOGIES.— 
(1) IN
GENERAL.—The Secretary shall enter 
into a contract or agreement with an independent 
entity to review and assess the implementation of 
the demonstration program under this section. The 
review and assessment shall include the following: 
(A) An assessment of the utilization of 
value-based insurance design methodologies by 
Medicare Advantage plans participating under 
such program. 
(B) An analysis of whether reducing or 
eliminating the copayment or coinsurance for 
each medication and clinical service identified 
pursuant to subsection (c)(2)(A) resulted in in-
creased adherence to medication regimens, in-
creased service utilization, improvement in qual-
ity metrics, better health outcomes, and en-
hanced beneficiary experience. 
(C) An analysis of the extent to which 
costs to Medicare Advantage plans under part 
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C of title XVIII of the Social Security Act par-
ticipating in the demonstration program is less 
than costs to Medicare Advantage plans under 
such part that are not participating in the dem-
onstration program. 
(D) An analysis of whether reducing or 
eliminating the copayment or coinsurance for 
providers identified pursuant to subsection 
(c)(2)(B)(ii) resulted in improvement in quality 
metrics, better health outcomes, and enhanced 
beneficiary experience. 
(E) An analysis, for each provider so iden-
tified, the extent to which costs to Medicare Ad-
vantage plans under part C of title XVIII of the 
Social Security Act participating in the dem-
onstration program is less than costs to Medi-
care Advantage plans under such part that are 
not participating in the demonstration program. 
(F) Such other matters as the Secretary 
considers appropriate. 
(2) REPORT.—The contract or agreement en-
tered into under paragraph (1) shall require such 
entity to submit to the Secretary a report on the re-
view and assessment conducted by the entity under 
such paragraph in time for the inclusion of the re-
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sults of such report in the report required by para-
graph (3). Such report shall include a description, in 
clear language, of the manner in which the entity 
conducted the review and assessment. 
(3) REPORT TO CONGRESS.—Not later than 4 
years after the date on which the demonstration pro-
gram begins under subsection (b)(2), the Secretary 
shall submit to Congress a report on the review and 
assessment of the demonstration program conducted 
under this subsection. The report shall include the 
following: 
(A) A description of the results of the re-
view and assessment included in the report sub-
mitted pursuant to paragraph (2). 
(B) Such recommendations as the Sec-
retary considers appropriate for enhancing the 
utilization of the methodologies applied under 
the demonstration program to all Medicare Ad-
vantage plans under part C of title XVIII of the 
Social Security Act so as to reduce copayments 
and coinsurance under such plans paid by 
Medicare beneficiaries for high-value prescrip-
tion medications and clinical services for which 
coverage is provided under such plans and to 
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otherwise improve the quality of health care 
provided under such plans. 
(4) OVERSIGHT REPORT.—Not later than three 
years after the date of the enactment of this Act, the 
Comptroller General of the United States shall sub-
mit to Congress a report on the demonstration pro-
gram that includes an assessment, with respect to 
individuals enrolled under Medicare Advantage plans 
approved to participate under the demonstration 
program, of the impact that the age, co-morbidities, 
and geographic regions of such individuals had upon 
the implementation of the demonstration program by 
the plans with respect to such individuals. 
(f) SAVINGS.—In no case may any reduction in bene-
ficiary copayments or coinsurance resulting from the im-
plementation of the demonstration program under this 
section result in expenditures under parts A, B, and D 
of the title XVIII of the Social Security Act that are great-
er than such expenditures without application of this sec-
tion. 
(g) EXPANSION OF DEMONSTRATION PROGRAM.— 
Taking into account the review and assessment conducted 
under subsection (e), the Secretary may, through notice 
and comment rulemaking, expand (including implementa-
tion on a nationwide basis) the duration and scope of the 
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demonstration program under title XVIII of the Social Se-
curity Act, other than under the original Medicare fee-for- 
service program under parts A and B of such title, to the 
extent determined appropriate by the Secretary, if the re-
quirements of paragraphs (1), (2) and (3) of subsection 
(c) of section 1115A of the Social Security Act (42 U.S.C. 
1315a), as applied to the testing of a model under sub-
section (b) of such section, applied to the demonstration 
under this section. 
(h) WAIVER AUTHORITY.—The Secretary may waive 
such provisions of titles XI and XVIII of the Social Secu-
rity Act as may be necessary to carry out the demonstra-
tion program under this section. 
(i) IMPLEMENTATION FUNDING.—For purposes of 
carrying out the demonstration program under this sec-
tion, the Secretary shall provide for the transfer from the 
Federal Hospital Insurance Trust Fund under section 
1817 of the Social Security Act (42 U.S.C. 1395i) and 
the Federal Supplementary Insurance Trust Fund under 
section 1841 of the Social Security Act (42 U.S.C. 1395t), 
including the Medicare Prescription Drug Account in such 
Trust Fund, in such proportion as determined appropriate 
by the Secretary, of such sums as may be necessary. 
Æ 
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