Medicare-X Choice Act of 2017

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Medicare-X Choice Act of 2017''.

SEC. 2. ESTABLISHMENT AND ADMINISTRATION OF A PUBLIC HEALTH PLAN.

    The Social Security Act is amended by adding at the end the 
following new title:

              ``TITLE XXII--MEDICARE EXCHANGE HEALTH PLAN

``SEC. 2201. ESTABLISHMENT.

    ``(a) Establishment of Plan.--
            ``(1) In general.--The Secretary shall establish a 
        coordinated and low-cost health plan, to be known as the 
        `Medicare Exchange health plan' (referred to in this section as 
        the `health plan') to provide access to quality health care for 
        enrollees.
            ``(2) Timeframe.--
                    ``(A) Individual market availability.--
                            ``(i) In general.--In accordance with 
                        clause (ii), the Secretary shall make the 
                        health plan available in the individual market, 
                        in certain rating areas, for plan year 2020 and 
                        each subsequent plan year, and increase the 
                        availability such that the plan is available in 
                        the individual market to all residents of all 
                        rating areas in the United States for plan year 
                        2023 and each subsequent plan year.
                            ``(ii) Priority areas.--In determining in 
                        which rating areas the Secretary initially will 
                        make the health plan available, the Secretary 
                        shall give priority to rating areas in which--
                                    ``(I) not more than 1 health 
                                insurance issuer offers plans on the 
                                applicable State or Federal American 
                                Health Benefit Exchange (referred to in 
                                this title as the `Exchange'); or
                                    ``(II) there is a shortage of 
                                health providers or lack of competition 
                                that results in a high cost of health 
                                care services, including health 
                                professional shortage areas and rural 
                                areas.
                    ``(B) Small group market.--The Secretary shall make 
                the health plan available in the small group market in 
                all rating areas for plan year 2024.
    ``(b) Establishment of Funds.--
            ``(1) Plan reserve fund.--
                    ``(A) In general.--There is established in the 
                Treasury of the United States a `Plan Reserve Fund', to 
                be administered by the Secretary of Health and Human 
                Services, for purposes of establishing the Medicare 
                Exchange health plan and administering such plan, 
                consisting of amounts appropriated to such fund.
                    ``(B) Appropriation.--There is appropriated 
                $1,000,000,000, out of monies in the Treasury not 
                otherwise obligated, to the Plan Reserve Fund for 
                fiscal year 2018.
            ``(2) Data and technology fund.--There is established in 
        the Treasury of the United States a `Data and Technology Fund', 
        to be administered by the Secretary of Health and Human 
        Services, acting through the Chief Actuary of the Centers for 
        Medicare & Medicaid Services, for purposes of updating 
        technology and performing data collection under section 2205 in 
        order to establish appropriate premiums for all geographic 
        regions of the United States. There are authorized to be 
        appropriated to the Data and Technology Fund such sums as may 
        be necessary for fiscal year 2018.
    ``(c) Rulemaking.--The Secretary may promulgate such regulations as 
may be necessary to carry out this title.

``SEC. 2202. AVAILABILITY OF PLAN.

    ``(a) Eligibility.--An individual shall be eligible to enroll in 
the health plan if such individual, for the entire period for which 
enrollment is sought--
            ``(1) is a qualified individual within the meaning of 
        section 1312 of the Patient Protection and Affordable Care Act 
        (42 U.S.C. 18032); and
            ``(2) is not eligible for benefits under the Medicare 
        program under title XVIII.
    ``(b) Exchanges.--In accordance with the timeframe under section 
2201(a)(2), the health plan shall be made available through the 
American Health Benefit Exchanges described in sections 1311 and 1321 
of the Patient Protection and Affordable Care Act (42 U.S.C. 18031, 
18041), including the Small Business Health Options Program Exchange.

``SEC. 2203. PLAN REQUIREMENTS.

    ``(a) General Requirements.--The health plan shall comply with all 
requirements of subtitle D of title I of the Patient Protection and 
Affordable Care Act (42 U.S.C. 18021 et seq.) and title XXVII of the 
Public Health Service Act (42 U.S.C. 300gg et seq.) applicable to 
qualified health plans, and such health plan shall be a qualified 
health plan, including for purposes of the Internal Revenue Code of 
1986.
    ``(b) Levels of Coverage.--The Secretary--
            ``(1) shall make available a silver level and gold level 
        version of the plan, in accordance with section 
        1301(a)(1)(C)(ii); and
            ``(2) may make available no more than 2 versions of the 
        plan for each of the 4 levels of coverage described in 
        subparagraphs (A) through (D) of section 1302(d)(1) of the 
        Patient Protection and Affordable Care Act (42 U.S.C. 
        18022(d)(1)).

``SEC. 2204. ADMINISTRATIVE CONTRACTING.

    ``(a) In General.--The Secretary may enter into contracts for the 
purpose of performing administrative functions (including functions 
described in subsection (a)(4) of section 1874A) with respect to the 
health plan in the same manner as the Secretary may enter into 
contracts under subsection (a)(1) of such section. The Secretary shall 
have the same authority with respect to the public health insurance 
option as the Secretary has under such subsection (a)(1) and subsection 
(b) of section 1874A with respect to title XVIII.
    ``(b) Transfer of Insurance Risk.--Any contract under subsection 
(a) shall not involve the transfer of insurance risk from the Secretary 
to the entity entering into such contract with the Secretary, except in 
the case of an alternative payment model under section 2209(h).

``SEC. 2205. DATA COLLECTION.

    ``Subject to all applicable privacy requirements, including the 
requirements under the regulations promulgated pursuant to section 
264(c) of the Health Insurance Portability and Accountability Act of 
1996 (42 U.S.C. 1320d-2 note), the Secretary may collect data from 
State insurance commissioners and other relevant entities to establish 
rates for premiums and for other purposes including to improve quality, 
and reduce racial, ethnic, and other disparities, with respect to the 
health plan.

``SEC. 2206. PREMIUMS; RISK POOLS; REINSURANCE.

    ``(a) Premium Amounts.--The Secretary shall establish premiums for 
the health plan that cover the full actuarial cost of offering such 
plan, including the administrative costs of offering such plan. Such 
premiums shall vary geographically and between the small group market 
and the individual market in accordance with differences in the cost of 
providing such coverage. If, for any plan year, the amount collected in 
premiums exceeds the amount required for health care benefits and 
administrative costs in that plan year, such excess amounts shall 
remain available to the Secretary to administer the health plan and 
finance beneficiary costs in subsequent years.
    ``(b) Risk Pool.--All enrollees in the health plan within a State 
shall be members of a single risk pool, except that the Secretary may 
establish separate risk pools for the individual market and small group 
market if the State has not exercised its authority under section 
1312(c)(3) of the Patient Protection and Affordable Care Act (42 U.S.C. 
18032(c)(3)).
    ``(c) Reinsurance.--Notwithstanding subsection (b), the Secretary 
may establish a mechanism to pool the costs of the highest-cost 
patients on a nationwide basis to the extent such costs are not already 
pooled pursuant to section 1343 of the Patient Protection and 
Affordable Care Act (42 U.S.C. 18063).

``SEC. 2207. REIMBURSEMENT RATES.

    ``(a) Medicare Rates.--
            ``(1) In general.--Except as provided in paragraph (2) and 
        subsections (b) and (c) and subject to subsection (d), the 
        Secretary shall reimburse health care providers furnishing 
        items and services under the health plan at rates determined 
        for equivalent items and services under the original Medicare 
        fee-for-service program under parts A and B of title XVIII.
            ``(2) Authority to increase payments rates in rural 
        areas.--If the Secretary determines appropriate, the Secretary 
        may increase the reimbursements rates described in paragraph 
        (1) by up to 25 percent for items and services furnished in 
        rural areas (as defined in section 1886(d)(2)(D)).
    ``(b) Prescription Drugs.--Subject to subsection (d), payment rates 
for prescription drugs shall be at a rate negotiated by the Secretary. 
Such negotiations may be in conjunction with negotiations for covered 
part D drugs under part D of title XVIII.
    ``(c) Additional Items and Services.--Subject to subsection (d), 
the Secretary shall establish reimbursement rates for any items and 
services provided under the health plan that are not items and services 
provided under the original Medicare fee-for-service program under 
parts A and B of title XVIII.
    ``(d) Innovative Payment Methods.--The Secretary may utilize 
innovative payment methods, including value-based payment arrangements, 
in making payments for items and services (including prescription 
drugs) furnished under the health plan.

``SEC. 2208. PARTICIPATING PROVIDERS.

    ``(a) In General.--A health care provider that is enrolled under 
the Medicare program under section 1866(j) or is a participating 
provider under a State Medicaid plan under title XIX on the date of 
enactment of this Act shall be a participating provider under the 
health plan.
    ``(b) Additional Providers.--The Secretary shall establish a 
process to allow health care providers not described in subsection (a) 
to become a participating provider under the health plan.
    ``(c) Opt-Out.--The Secretary shall establish a process by which a 
health care provider that is a participating provider under the health 
plan pursuant to subsection (a) or (b) may opt-out of being such a 
participating provider.
    ``(d) Requirement To Participate in Order To Be Enrolled Under 
Medicare.--Beginning January 1, 2019, a health care provider may not be 
enrolled under the Medicare program under section 1866(j) unless the 
provider is also a participating provider under the health plan.

``SEC. 2209. DELIVERY SYSTEM REFORM FOR AN ENHANCED HEALTH PLAN.

    ``(a) In General.--For plan years beginning with plan year 2020, 
the Secretary may utilize innovative payment mechanisms and policies to 
determine payments for items and services under the health plan. The 
payment mechanisms and policies under this section may include patient-
centered medical home and other care management payments, accountable 
care organizations, value-based purchasing, bundling of services, 
differential payment rates, performance or utilization based payments, 
telehealth, remote patient monitoring, partial capitation, and direct 
contracting with providers.
    ``(b) Requirements for Innovative Payments.--The Secretary shall 
design and implement the payment mechanisms and policies under this 
section in a manner that--
            ``(1) seeks to--
                    ``(A) improve health outcomes;
                    ``(B) reduce health disparities (including racial, 
                ethnic, and other disparities);
                    ``(C) provide efficient and affordable care;
                    ``(D) address geographic variation in the provision 
                of health services; or
                    ``(E) prevent or manage chronic illness; and
            ``(2) promotes care that is integrated, patient-centered, 
        quality, and efficient.
    ``(c) Encouraging the Use of High-Value Services.--To the extent 
allowed by the benefit standards applied to all health benefits plans 
participating in the Exchanges (as described in section 2202(b)), the 
health plan may modify cost-sharing and payment rates to encourage the 
use of services that promote health and value.
    ``(d) Promotion of Delivery System Reform.--The Secretary shall 
monitor and evaluate the progress of payment and delivery system 
reforms under this section and shall seek to implement such reforms 
subject to the following:
            ``(1) To the extent that the Secretary finds a payment and 
        delivery system reform successful in improving quality and 
        reducing costs, the Secretary shall implement such reform on as 
        large a geographic scale as practical and economical.
            ``(2) The Secretary may delay the implementation of such a 
        reform in geographic areas in which such implementation would 
        place the public health insurance option at a competitive 
        disadvantage.
            ``(3) The Secretary may prioritize implementation of such a 
        reform in high-cost geographic areas or otherwise in order to 
        reduce total program costs or to promote high-value care.
    ``(e) Non-Uniformity Permitted.--Nothing in this section shall 
prevent the Secretary from varying payments based on different payment 
structure models (such as accountable care organizations and medical 
homes) under the health plan for different geographic areas.
    ``(f) Integration With Social Services.--The Secretary shall 
establish processes and, when appropriate, collaborate with other 
agencies to integrate medical care under the health plan with food, 
housing, transportation, and income assistance if the Secretary 
determines that such integration is expected to--
            ``(1) reduce spending without reducing the quality of 
        patient care; or
            ``(2) improve the quality of patient care without 
        increasing spending.
    ``(g) Telehealth.--The Secretary shall ensure the integration of 
telehealth tools that increase patient access to medical care, 
particularly in remote or underserved areas, if the Secretary 
determines that such integration is expected to--
            ``(1) reduce spending without reducing the quality of 
        patient care; or
            ``(2) improve the quality of patient care without 
        increasing spending.
    ``(h) Alternative Payment Model.--
            ``(1) In general.--The Secretary shall evaluate the 
        possibility of providing incentives, and, if appropriate, apply 
        incentives, for enrollees in the health plan who receive 
        services from providers who are participating in an alternative 
        payment model (as defined in section 1833(z)(3)(C)).
            ``(2) Authority to use apms in use under traditional 
        medicare.--Nothing in this section shall preclude the Secretary 
        from using alternative payment models (as so defined) under 
        this title that are in use under title XVIII.

``SEC. 2210. NO EFFECT ON MEDICARE BENEFITS OR MEDICARE TRUST FUNDS.

    ``Nothing in this title shall--
            ``(1) affect the benefits available under title XVIII; or
            ``(2) impact the Federal Hospital Insurance Trust Fund 
        under section 1817 or the Federal Supplementary Medical 
        Insurance Trust Fund under section 1841 (including the Medicare 
        Prescription Drug Account within such Trust Fund).''.

SEC. 3. AUTHORITY TO NEGOTIATE FAIR PRICES FOR MEDICARE PRESCRIPTION 
              DRUGS.

    (a) In General.--Section 1860D-11 of the Social Security Act (42 
U.S.C. 1395w-111) is amended by striking subsection (i).
    (b) Effective Date.--The amendment made by this section shall take 
effect on the date of the enactment of this Act.

Summary: Medicare-X Choice Act of 2017 This bill amends the Social Security Act to create the Medicare Exchange health plan, which the Centers for Medicare &amp; Medicaid Services (CMS) must offer in&nbsp;certain individual health insurance exchanges in 2020 and offer in all individual health insurance exchanges by 2023. Any individual who is a resident of a state where the plan is offered and who is not eligible for Medicare benefits may enroll in the plan. CMS must offer the plan in the small group market&nbsp;in all areas for 2024. The plan must meet the same requirements, including essential&nbsp;health benefits, as health insurance exchange plans under the Patient Protection and Affordable Care Act. Health care providers enrolled under Medicare or under a state Medicaid plan shall also&nbsp;be participating providers for the plan&nbsp;and shall be reimbursed at Medicare&nbsp;rates.  The bill eliminates the restriction on the Department of Health and Human Services to negotiate prescription drug prices for Medicare.&nbsp;