I 
113TH CONGRESS 
1ST SESSION H. R. 2524 
To establish a program to provide incentive payments to participating 
Medicare beneficiaries who voluntarily establish and maintain better health. 
IN THE HOUSE OF REPRESENTATIVES 
JUNE 26, 2013 
Mr. PAULSEN (for himself, Mr. KIND, Mr. GRIFFIN of Arkansas, and Ms. 
FUDGE) introduced the following bill; which was referred to the Com-
mittee on Ways and Means, and in addition to the Committee on Energy 
and Commerce, for a period to be subsequently determined by the Speak-
er, in each case for consideration of such provisions as fall within the ju-
risdiction of the committee concerned 
A BILL 
To establish a program to provide incentive payments to 
participating Medicare beneficiaries who voluntarily es-
tablish and maintain better health. 
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 ‘‘Medicare Better 
Health Rewards Program Act of 2013’’. 
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SEC. 2. MEDICARE BETTER HEALTH REWARDS PROGRAM. 
Part B of title XVIII of the Social Security Act (42 
U.S.C. 1395j et seq.) is amended by adding at the end 
the following new section: 
‘‘MEDICARE BETTER HEALTH REWARDS PROGRAM 
‘‘SEC. 1849. (a) IN GENERAL.—The Secretary shall 
establish a Better Health Rewards Program (in this sec-
tion referred to as the ‘Program’) under which incentives 
are provided to Medicare beneficiaries who voluntarily 
agree to participate in the Program. 
‘‘(b) ENROLLMENT.—A health professional partici-
pating in the Program shall provide their patients who are 
Medicare beneficiaries with a description of and an oppor-
tunity to enroll in the Program on a voluntary basis. If 
a Medicare beneficiary elects to enroll in the Program, the 
health professional shall inform the Secretary of the indi-
vidual’s enrollment through a process established by the 
Secretary, which does not impose additional administra-
tive requirements on the participating health professional. 
‘‘(c) ESTABLISHMENT OF BETTER HEALTH TARGET 
STANDARDS.— 
‘‘(1) IN GENERAL.— 
‘‘(A) 
ESTABLISHMENT.—The 
Secretary 
shall establish standards for measuring better 
health targets and points for achieving such 
standards for participating Medicare bene-
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assessment under paragraph (3)(A). The health pro-
fessional shall use such data to aid in the determina-
tion of whether and to what extent the participating 
Medicare beneficiary is meeting the target standards 
under subsection (c) in each of years 2 and 3 of the 
Program. 
‘‘(3) REQUIRED
ASSESSMENTS
FOR
PARTICI-
PATING MEDICARE BENEFICIARIES.— 
‘‘(A) FIRST YEAR.—During year 1 of the 
Program, a health professional shall furnish to 
each participating Medicare beneficiary that is 
a patient of the health professional either an 
annual wellness visit or an initial preventive 
physical examination. 
‘‘(B) SECOND AND THIRD YEARS.—During 
each of years 2 and 3 of the Program, a health 
professional shall furnish to each participating 
Medicare beneficiary that is a patient of the 
health professional an annual wellness visit to 
determine whether and to what extent the par-
ticipating Medicare beneficiary has met the tar-
get standards under subsection (c). 
‘‘(e) DETERMINATION OF POINTS AND PAYMENT OF 
INCENTIVES.— 
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‘‘(B) INFLATION ADJUSTMENT.—The dol-
lar amounts specified in this paragraph shall be 
increased, beginning with 2017, from year to 
year based on the percentage increase in the 
consumer price index for all urban consumers 
(all items; United States city average), rounded 
to the nearest $1. 
‘‘(3) FINAL
DETERMINATION
OF
STANDARDS 
ACHIEVEMENT
MADE
BY
PARTICIPATING
HEALTH 
PROFESSIONAL.—Under the Program, a partici-
pating health professional shall make the final deter-
mination as to whether or not a participating Medi-
care beneficiary has met the target standards under 
subsection (c) and what screening tests and specified 
vaccinations, or other services, are necessary for 
purposes of making such determination. 
‘‘(f) SPENDING BENCHMARKS.— 
‘‘(1) IN GENERAL.—The Secretary shall collect 
relevant data, including data on claims paid under 
this title for services furnished to participating 
Medicare beneficiaries during the Program, for pur-
poses of determining the aggregate estimated sav-
ings achieved under this title for participating Medi-
care beneficiaries during each of years 2 and 3 of 
the Program in accordance with paragraph (2) (and 
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for a subsequent year if the Program is expanded 
under subsection (d)(1)(B)). 
‘‘(2) DETERMINATION
OF
AGGREGATE
ESTI-
MATED SAVINGS.— 
‘‘(A) IN
GENERAL.—The amount of the 
aggregate estimated savings under this title for 
participating Medicare beneficiaries under para-
graph (1), with respect to a year, shall be equal 
to— 
‘‘(i) the estimated savings determined 
under subparagraph (B) for the year; 
minus 
‘‘(ii) the aggregate incentive payments 
made under the Program during the year. 
‘‘(B) DETERMINATION OF ESTIMATED SAV-
INGS.—For purposes of subparagraph (A)(i), 
the estimated savings determined under this 
subparagraph for a year shall be equal to— 
‘‘(i) the estimated aggregate expendi-
tures under this title (as projected under 
subparagraph (C)) for the year; minus 
‘‘(ii) the actual aggregate expendi-
tures under this title (as determined by the 
Secretary and taking into account any re-
duction in specific health risks of the par-
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ticipating Medicare beneficiaries) for the 
year. 
‘‘(C) PROJECTION OF ESTIMATED AGGRE-
GATE CLAIMS COST.— 
‘‘(i) BENCHMARK
BASE
YEAR.—The 
Secretary shall establish a benchmark base 
year amount of expenditures under this 
title for participating Medicare bene-
ficiaries during year 1 of the Program. 
‘‘(ii) 
PROJECTION.—The 
Secretary 
shall use the benchmark base year amount 
established under clause (i) to project the 
estimated aggregate expenditures for all 
participating Medicare beneficiaries during 
each of years 2 and 3 of the Program as 
if the beneficiaries were not participating 
in the Program. In making such projec-
tion, the Secretary may include adjust-
ments for health status or other specific 
risk factors and geographic variation for 
the participating Medicare beneficiaries. 
‘‘(D) PUBLIC REPORT OF DETERMINATION 
AND
OTHER
PROGRAM
INFORMATION.—Not 
later than 90 days after determining the aggre-
gate estimated savings (if any) under subpara-
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graph (A) with respect to a year, the Secretary 
shall make available to the public a report con-
taining a description of the amount of the sav-
ings determined, including the methodology and 
any other calculations or determinations in-
volved in the determination of such amount. 
Such report shall include— 
‘‘(i) a description of any reduction in 
specific health risks of participating Medi-
care beneficiaries identified by the Sec-
retary; 
‘‘(ii) a description of— 
‘‘(I) standards for measuring bet-
ter health targets under subsection 
(c); and 
‘‘(II) the points available for 
achieving each such standard under 
that subsection; and 
‘‘(iii) recommendations for such legis-
lation and administrative action as the 
Secretary determines appropriate. 
‘‘(3) MONITORING OF PROGRAM COSTS.—Dur-
ing the operation of the Program, the Chief Actuary 
of the Centers for Medicare & Medicaid Services 
shall— 
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‘‘(A) monitor the Program to determine 
whether or not the Program is reducing aggre-
gate expenditures under this title; and 
‘‘(B) submit to the Secretary an annual re-
port on the results of such monitoring. 
‘‘(4) REQUIRED ACTION IF AGGREGATE INCEN-
TIVE
PAYMENTS
EXCEED
SAVINGS.—If the Sec-
retary, taking into account the reports under para-
graph (3)(B), determines that the aggregate expend-
itures under this title exceed the aggregate expendi-
tures under this title that would have been made if 
the Program had not been implemented, the Sec-
retary shall provide for changes to the provisions of 
the program in order to eliminate such excess. 
‘‘(g) WAIVER
AUTHORITY.—The Secretary may 
waive such requirements of titles XI and XVIII as may 
be necessary to carry out the purposes of the Program 
established under this section. 
‘‘(h) DEFINITIONS.—In this section: 
‘‘(1) ANNUAL WELLNESS VISIT.—The term ‘an-
nual wellness visit’ includes personalized prevention 
plan services (as defined in section 1861(hhh)(1)). 
‘‘(2) 
HEALTH
PROFESSIONAL.—The 
term 
‘health professional’ includes a physician (as defined 
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in section 1861(r)(1)) and a practitioner described 
in clause (i) of section 1842(b)(18)(C). 
‘‘(3) INITIAL PREVENTIVE PHYSICAL EXAMINA-
TION.—The term ‘initial preventive physical exam-
ination’ has the meaning given that term in section 
1861(ww)(1). 
‘‘(4) 
MEDICARE
BENEFICIARY.—The 
term 
‘Medicare beneficiary’ means an individual enrolled 
in part B. 
‘‘(5) 
PARTICIPATING
MEDICARE
BENE-
FICIARY.—The term ‘participating Medicare bene-
ficiary’ means a Medicare beneficiary who enrolls in 
the Program under subsection (b). 
‘‘(6) SCREENING TESTS.—The term ‘screening 
tests’ means any of the following that are deter-
mined by a health professional to be appropriate for 
a participating Medicare beneficiary: 
‘‘(A) Colorectal cancer screening tests (as 
defined in section 1861(pp)). 
‘‘(B) Screening mammography (as de-
scribed in section 1861(jj)). 
‘‘(C) Screening pap smear and screening 
pelvic exam (as defined in section 1861(nn)). 
‘‘(D) Screening for glaucoma (as defined 
in section 1861(uu)). 
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‘‘(E) Bone mass measurement (as defined 
in section 1861(rr)) for qualified individuals de-
scribed in paragraph (2)(A) of such section. 
‘‘(F) HIV screening for high-risk groups 
(as identified by the Secretary). 
‘‘(7) SPECIFIED
VACCINATIONS.—The term 
‘specified vaccinations’ means the vaccinations de-
scribed in section 1861(ww)(1) that are determined 
by a health professional to be appropriate for a par-
ticipating Medicare beneficiary.’’. 
SEC. 3. PARTICIPATION BY MEDICARE ADVANTAGE PLANS. 
Section 1859 of the Social Security Act (42 U.S.C. 
1395w–28) is amended by adding at the end the following 
new subsection: 
‘‘(h) PROVIDING INCENTIVES FOR VOLUNTARY PAR-
TICIPATION
IN
A BETTER HEALTH REWARDS PRO-
GRAM.— 
‘‘(1) IN GENERAL.—Effective for plan years be-
ginning on or after the date of enactment of the 
Medicare Better Health Rewards Program Act of 
2013, a Medicare Advantage organization may pro-
vide to individuals enrolled in an MA plan offered by 
the organization incentive payments, including cash, 
cash-equivalent, or other types of incentives, for vol-
untary participation in a Better Health Rewards 
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Program (in this subsection referred to as the ‘Pro-
gram’) that rewards individuals for meeting certain 
health targets established by the Secretary. 
‘‘(2) LIMITATION.—In no case shall the month-
ly bid amount submitted by a Medicare Advantage 
organization under section 1834(a)(6) (or the 
monthly premium charged by the organization under 
section 1854(b)) with respect to an MA plan offered 
by the organization take into account any incentive 
payments made to enrollees under the Program. 
‘‘(3) IMPLEMENTATION.—The Program under 
this subsection shall be conducted in a similar man-
ner to the manner in which the program under sec-
tion 1849 is conducted, in accordance with stand-
ards established by the Secretary. 
‘‘(4) NOTIFICATION AND PROVISION OF INFOR-
MATION.—A Medicare Advantage organization seek-
ing to participate in the Program shall— 
‘‘(A) notify the Secretary of the organiza-
tion’s intent to participate in the Program; and 
‘‘(B) agree to provide to the Secretary— 
‘‘(i) information regarding— 
‘‘(I) which enrollees participate 
in the Program; 
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‘‘(II) the scores of those enrollees 
with respect to applicable health tar-
gets under the Program; and 
‘‘(III) the incentives enrollees re-
ceive for meeting such health targets; 
and 
‘‘(ii) any other information specified 
by the Secretary for purposes of this sub-
section. 
‘‘(5) WAIVER AUTHORITY.—The Secretary may 
waive such requirements of titles XI and XVIII as 
may be necessary to carry out the purposes of the 
Program established under this subsection.’’. 
SEC. 4. PARTICIPATION OF SECTION 1876 COST PLANS. 
Section 1876 of the Social Security Act (42 U.S.C. 
1395mm) is amended by inserting at the end the fol-
lowing: 
‘‘(l) PROVIDING INCENTIVES FOR VOLUNTARY PAR-
TICIPATION
IN
A BETTER HEALTH REWARDS PRO-
GRAM.— 
‘‘(1) IN GENERAL.—Effective for contract peri-
ods beginning on or after the date of enactment of 
the Medicare Better Health Rewards Program Act 
of 2013, an eligible organization may provide to 
members enrolled under this section with the organi-
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zation incentive payments, including cash, cash- 
equivalent, or other types of incentives, for voluntary 
participation in a Better Health Rewards Program 
(in this subsection referred to as the ‘Program’) that 
rewards members for meeting certain health targets 
established by the Secretary. 
‘‘(2) LIMITATION.—In no case shall the pay-
ment to an eligible organization under this section 
(or the premium rate charged by the organization 
under this section) with respect to members enrolled 
with the organization take into account any incentive 
payments made to members under the Program. 
‘‘(3) IMPLEMENTATION.—The Program under 
this subsection shall be conducted in a similar man-
ner to the manner in which the program under sec-
tion 1849 is conducted, in accordance with stand-
ards established by the Secretary. 
‘‘(4) NOTIFICATION AND PROVISION OF INFOR-
MATION.—An eligible organization seeking to partici-
pate in the Program shall— 
‘‘(A) notify the Secretary of the organiza-
tion’s intent to participate in the Program; and 
‘‘(B) agree to provide to the Secretary— 
‘‘(i) information regarding— 
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‘‘(I) which members participate 
in the Program; 
‘‘(II) the scores of those members 
with respect to applicable health tar-
gets under the Program; and 
‘‘(III) the incentives members re-
ceive for meeting such health targets; 
and 
‘‘(ii) any other information specified 
by the Secretary for purposes of this sub-
section. 
‘‘(5) WAIVER AUTHORITY.—The Secretary may 
waive such requirements of titles XI and XVIII as 
may be necessary to carry out the purposes of the 
Program established under this subsection.’’. 
SEC. 5. PARTICIPATION OF PROGRAMS OF ALL-INCLUSIVE 
CARE FOR THE ELDERLY (PACE). 
(a) MEDICARE.—Section 1894 of the Social Security 
Act (42 U.S.C. 1395eee) is amended by adding at the end 
the following new subsection: 
‘‘(j) PROVIDING INCENTIVES FOR VOLUNTARY PAR-
TICIPATION
IN
A BETTER HEALTH REWARDS PRO-
GRAM.— 
‘‘(1) IN GENERAL.—Effective for PACE pro-
gram agreements entered into on or after the date 
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of enactment of the Medicare Better Health Re-
wards Program Act of 2013, a PACE provider may 
provide to PACE program eligible individuals en-
rolled under this section with the PACE provider in-
centive payments, including cash, cash-equivalent, or 
other types of incentives, for voluntary participation 
in a Better Health Rewards Program (in this sub-
section referred to as the ‘Program’) that rewards 
enrollees for meeting certain health targets estab-
lished by the Secretary. 
‘‘(2) LIMITATION.—In no case shall the pay-
ment to a PACE provider under this section (or any 
premium charged by the provider under this section) 
with respect to PACE program eligible individuals 
enrolled with the PACE provider take into account 
any incentive payments made to individuals under 
the Program. 
‘‘(3) IMPLEMENTATION.—The Program under 
this subsection shall be conducted in a similar man-
ner to the manner in which the program under sec-
tion 1849 is conducted, in accordance with stand-
ards established by the Secretary. 
‘‘(4) NOTIFICATION AND PROVISION OF INFOR-
MATION.—A PACE provider seeking to participate 
in the Program shall— 
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‘‘(A) notify the Secretary of the PACE 
provider’s intent to participate in the Program; 
and 
‘‘(B) agree to provide to the Secretary— 
‘‘(i) information regarding— 
‘‘(I) which PACE program eligi-
ble individuals enrolled with the 
PACE provider participate in the Pro-
gram; 
‘‘(II) the scores of those individ-
uals with respect to applicable health 
targets under the Program; and 
‘‘(III) the incentives individuals 
receive for meeting such health tar-
gets; and 
‘‘(ii) any other information specified 
by the Secretary for purposes of this sub-
section. 
‘‘(5) WAIVER AUTHORITY.—The Secretary may 
waive such requirements of titles XI, XVIII, and 
XIX as may be necessary to carry out the purposes 
of the Program established under this subsection.’’. 
(b) MEDICAID.—Section 1934 of the Social Security 
Act (42 U.S.C. 1396u–4) is amended by adding at the 
end the following new subsection: 
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‘‘(k) PROVIDING INCENTIVES FOR VOLUNTARY PAR-
TICIPATION
IN
A BETTER HEALTH REWARDS PRO-
GRAM.— 
‘‘(1) IN GENERAL.—Effective for PACE pro-
gram agreements entered into on or after the date 
of enactment of the Medicare Better Health Re-
wards Program Act of 2013, a PACE provider may 
provide to PACE program eligible individuals en-
rolled under this section with the PACE provider in-
centive payments, including cash, cash-equivalent, or 
other types of incentives, for voluntary participation 
in a Better Health Rewards Program (in this sub-
section referred to as the ‘Program’) that rewards 
enrollees for meeting certain health targets estab-
lished by the Secretary. 
‘‘(2) LIMITATION.—In no case shall the pay-
ment to a PACE provider under this section (or any 
premium charged by the provider under this section) 
with respect to PACE program eligible individuals 
enrolled with the PACE provider take into account 
any incentive payments made to individuals under 
the Program. 
‘‘(3) IMPLEMENTATION.—The Program under 
this subsection shall be conducted in a similar man-
ner to the manner in which the program under sec-
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tion 1849 is conducted, in accordance with stand-
ards established by the Secretary. 
‘‘(4) NOTIFICATION AND PROVISION OF INFOR-
MATION.—A PACE provider seeking to participate 
in the Program shall— 
‘‘(A) notify the Secretary of the PACE 
provider’s intent to participate in the Program; 
and 
‘‘(B) agree to provide to the Secretary— 
‘‘(i) information regarding— 
‘‘(I) which PACE program eligi-
ble individuals enrolled with the 
PACE provider participate in the Pro-
gram; 
‘‘(II) the scores of those individ-
uals with respect to applicable health 
targets under the Program; and 
‘‘(III) the incentives individuals 
receive for meeting such health tar-
gets; and 
‘‘(ii) any other information specified 
by the Secretary for purposes of this sub-
section. 
‘‘(5) WAIVER AUTHORITY.—The Secretary may 
waive such requirements of titles XI, XVIII, and 
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XIX as may be necessary to carry out the purposes 
of the Program established under this subsection.’’. 
SEC. 6. EXCLUSION OF INCENTIVE PAYMENTS. 
(a) IN GENERAL.—Part III of subchapter B of chap-
ter 1 of the Internal Revenue Code of 1986 is amended 
by inserting after section 139D the following new section: 
‘‘SEC. 139E. MEDICARE BETTER HEALTH REWARDS PAY-
MENTS. 
‘‘Gross income shall not include any payment made 
under the following programs: 
‘‘(1) The Medicare Better Health Rewards Pro-
gram established under section 1849 of the Social 
Security Act. 
‘‘(2) A Better Health Rewards Program estab-
lished pursuant to section 1859(h), 1876(l), 1894(j), 
or 1934(k) of the Social Security Act.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for part III of subchapter B of chapter 1 of such Code 
is amended by inserting after the item relating to section 
139D the following new item: 
‘‘Sec. 139E. Medicare Better Health Rewards payments.’’. 
Æ 
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