II 113th CONGRESS 1st Session S. 1228 IN THE SENATE OF THE UNITED STATES June 26, 2013 Mr. Wyden (for himself and Mr. Portman ) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To establish a program to provide incentive payments to participating Medicare beneficiaries who voluntarily establish and maintain better health.

1. Short title This Act may be cited as the Medicare Better Health Rewards Program Act of 2013 . 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: 1849. Medicare Better Health Rewards Program (a) In general The Secretary shall establish a Better Health Rewards Program (in this section 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 participating in the Program shall provide their patients who are Medicare beneficiaries with a description of and an opportunity 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 individual's enrollment through a process established by the Secretary, which does not impose additional administrative 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 beneficiaries, including such standards and points with respect to the following: (i) Annual wellness visit. (ii) Tobacco cessation. (iii) Body Mass Index (BMI). (iv) Diabetes screening test. (v) Cardiovascular disease screening. (vi) Cholesterol level screening. (vii) Screening tests and specified vaccinations. (B) Consultation In establishing stan­dards and points for achieving such standards under this subsection, the Secretary— (i) shall consult with 1 or more nationally recognized health care quality organizations, as determined appropriate by the Secretary; and (ii) may consult with physicians and other professionals experienced with well­ness programs. (C) Points The number of points awarded for a year for achieving standards with respect to each of the targets described in clauses (i) through (vii) of subparagraph (A) shall not exceed 5. Such points may be awarded on a sliding scale, based on standards established under this subsection, as determined appropriate by the Secretary. (2) Modification of better health target standards and assigned points (A) In general The Secretary may modify standards for measuring better health targets and, subject to paragraph (1)(C), points for achieving such standards for participating Medicare beneficiaries under this subsection. (B) Consultation In modifying standards and points for achieving such standards under this paragraph, the Secretary— (i) shall consult with 1 or more nationally recognized health care quality organizations, as determined appropriate by the Secretary; and (ii) may consult with physicians and other professionals experienced with well­ness programs. (d) Conduct of program (1) Duration (A) In general Subject to subparagraph (B), the Program shall be conducted for not less than a 3-year period. (B) Expansion The Secretary shall expand the duration and scope of the Program, to the extent determined appropriate by the Secretary, if— (i) the Secretary determines that such expansion is expected to— (I) reduce spending under this title without reducing the quality of care; or (II) improve the quality of care and reduce spending; (ii) the Chief Actuary of the Centers for Medicare & Medicaid Services certifies that such expansion would reduce program spending under this title; and (iii) the Secretary determines that such expansion would not deny or limit the coverage or provision of benefits under this title for individuals. (2) Collection and use of baseline data During the first year of the Program, a health professional shall establish and report to the Secretary baseline information for each participating Medicare beneficiary who is a patient of the health professional as part of that beneficiary’s first year assessment under paragraph (3)(A). The health professional shall use such data to aid in the determination 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 participating 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 participating Medicare beneficiary has met the target standards under subsection (c). (e) Determination of points and payment of incentives (1) Determination of points During each of years 2 and 3 of the Program, a health professional shall— (A) evaluate and report to the Secretary whether each participating Medicare beneficiary that is a patient of the health professional has achieved the target standards under subsection (c); and (B) determine the total amount of points that each such participating Medicare beneficiary has achieved for the year based on the points assigned for achieving such standards under subsection (c). (2) Incentive payment (A) In general The Secretary shall pay to each participating Medicare beneficiary who achieves at least 20 points under paragraph (1)(B) for the year an incentive payment. Such payment shall be equal to an amount determined appropriate by the Secretary, but no case shall such amount exceed the following: Points Year 2 Payment Amount Year 3 or a Subsequent Year Payment Amount 20–24 points $100 $200 25 or more points $200 $400. (B) Inflation adjustment The dollar 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 participating health professional shall make the final determination as to whether or not a participating Medicare 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 purposes of determining the aggregate estimated savings achieved under this title for participating Medicare beneficiaries during each of years 2 and 3 of the Program in accordance with paragraph (2) (and for a subsequent year if the Program is expanded under subsection (d)(1)(B)). (2) Determination of aggregate estimated savings (A) In general The amount of the aggregate estimated savings under this title for participating Medicare beneficiaries under paragraph (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 savings For purposes of subparagraph (A)(i), the estimated savings determined under this subparagraph for a year shall be equal to— (i) the estimated aggregate expenditures under this title (as projected under subparagraph (C)) for the year; minus (ii) the actual aggregate expenditures under this title (as determined by the Secretary and taking into account any reduction in specific health risks of the participating Medicare beneficiaries) for the year. (C) Projection of estimated aggregate claims cost (i) Benchmark base year The Secretary shall establish a benchmark base year amount of expenditures under this title for participating Medicare beneficiaries 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 projection, the Secretary may include adjustments 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 aggregate estimated savings (if any) under subparagraph (A) with respect to a year, the Secretary shall make available to the public a report containing a description of the amount of the savings determined, including the methodology and any other calculations or determinations involved in the determination of such amount. Such report shall include— (i) a description of any reduction in specific health risks of participating Medicare beneficiaries identified by the Secretary; (ii) a description of— (I) standards for measuring better health targets under subsection (c); and (II) the points available for achieving each such standard under that subsection; and (iii) recommendations for such legislation and administrative action as the Secretary determines appropriate. (3) Monitoring of Program costs During the operation of the Program, the Chief Actuary of the Centers for Medicare & Medicaid Services shall— (A) monitor the Program to determine whether or not the Program is reducing aggregate expenditures under this title; and (B) submit to the Secretary an annual report on the results of such monitoring. (4) Required action if aggregate incentive payments exceed savings If the Secretary, taking into account the reports under paragraph (3)(B), determines that the aggregate expenditures under this title exceed the aggregate expenditures under this title that would have been made if the Program had not been implemented, the Secretary 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 annual 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 in section 1861(r)(1)) and a practitioner described in clause (i) of section 1842(b)(18)(C). (3) Initial preventive physical examination The term initial preventive physical examination 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 beneficiary The term participating Medicare beneficiary 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 determined 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 described 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)). (E) Bone mass measurement (as defined in section 1861(rr)) for qualified individuals described 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 described in section 1861(ww)(1) that are determined by a health professional to be appropriate for a participating Medicare beneficiary. . 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 participation in a Better Health Rewards Program (1) In general Effective for plan years beginning on or after the date of enactment of the Medicare Better Health Rewards Program Act of 2013 , a Medicare Advantage organization may provide to individuals enrolled in an MA plan offered by the organization 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 individuals for meeting certain health targets established by the Secretary. (2) Limitation In no case shall the monthly 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 manner to the manner in which the program under section 1849 is conducted, in accordance with standards established by the Secretary. (4) Notification and provision of information A Medicare Advantage organization seeking to participate in the Program shall— (A) notify the Secretary of the organization'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; (II) the scores of those enrollees with respect to applicable health targets under the Program; and (III) the incentives enrollees receive for meeting such health targets; and (ii) any other information specified by the Secretary for purposes of this subsection. (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. . 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 following: (l) Providing incentives for voluntary participation in a Better Health Rewards Program (1) In general Effective for contract periods 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 organization 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 payment 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 manner to the manner in which the program under section 1849 is conducted, in accordance with standards established by the Secretary. (4) Notification and provision of information An eligible organization seeking to participate in the Program shall— (A) notify the Secretary of the organization's intent to participate in the Program; and (B) agree to provide to the Secretary— (i) information regarding— (I) which members participate in the Program; (II) the scores of those members with respect to applicable health targets under the Program; and (III) the incentives members receive for meeting such health targets; and (ii) any other information specified by the Secretary for purposes of this subsection. (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. . 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 inserting at the end the following: (j) Providing incentives for voluntary participation in a Better Health Rewards Program (1) In general Effective for PACE program agreements entered into on or after the date of enactment of the Medicare Better Health Rewards Program Act of 2013 , a PACE provider may provide to PACE program eligible individuals enrolled under this section with the PACE provider 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 enrollees for meeting certain health targets established by the Secretary. (2) Limitation In no case shall the payment 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 manner to the manner in which the program under section 1849 is conducted, in accordance with standards established by the Secretary. (4) Notification and provision of information 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 eligible individuals enrolled with the PACE provider participate in the Program; (II) the scores of those individuals with respect to applicable health targets under the Program; and (III) the incentives individuals receive for meeting such health targets; and (ii) any other information specified by the Secretary for purposes of this subsection. (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: (k) Providing incentives for voluntary participation in a Better Health Rewards Program (1) In general Effective for PACE program agreements entered into on or after the date of enactment of the Medicare Better Health Rewards Program Act of 2013 , a PACE provider may provide to PACE program eligible individuals enrolled under this section with the PACE provider 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 enrollees for meeting certain health targets established by the Secretary. (2) Limitation In no case shall the payment 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 manner to the manner in which the program under section 1849 is conducted, in accordance with standards established by the Secretary. (4) Notification and provision of information 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 eligible individuals enrolled with the PACE provider participate in the Program; (II) the scores of those individuals with respect to applicable health targets under the Program; and (III) the incentives individuals receive for meeting such health targets; and (ii) any other information specified by the Secretary for purposes of this subsection. (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. . 6. Exclusion of incentive payments (a) In general Part III of subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after section 139D the following new section: 139E. Medicare Better Health Rewards payments Gross income shall not include any payment made under the following programs: (1) The Medicare Better Health Rewards Program established under section 1849 of the Social Security Act. (2) A Better Health Rewards Program established 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. .