I 113th CONGRESS 1st Session H. R. 1487 IN THE HOUSE OF REPRESENTATIVES April 11, 2013 Mr. McDermott introduced the following bill; which was referred to the Committee on Energy and Commerce , and in addition to the Committee on Ways and Means , for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned A BILL To amend titles XVIII and XI of the Social Security Act to establish an exception from the physician self-referral prohibition and a safe harbor from Federal antikickback and other sanctions for incentive payments made by hospitals to physicians under certain incentive payment programs.

1. Short title This Act may be cited as the Improved Health Care at Lower Cost Act of 2013 . 2. Exception and safe harbor from Federal sanctions for incentive payments from hospitals to physicians under certain incentive payment programs (a) Findings Congress finds the following: (1) The Department of Health and Human Services has been engaged in approving, on a project-by-project basis, gain-sharing arrangements under demonstration authority for nearly a decade. Based on the knowledge gained from such demonstration projects, the Department is capable of developing and applying standards for permitting such arrangements more generally without the use of such authority. (2) The Inspector General of the Department of Health and Human Services has issued a special advisory bulletin in July 1999 that indicates that there is no general authority for waiving sanctions for any gain-sharing arrangements between physicians and hospitals. (3) Due to lack of capitalization, size limitations, risk characteristics, and other factors, many hospitals and physicians have been unable or unwilling to enter into gain-sharing types of arrangements that meet the requirements of the shared savings program. (b) Purpose The purpose of this section is to establish general statutory authority within the Department of Health and Human Services to recognize gain-sharing and other incentive payment programs, other than the shared savings program, that align incentives among hospitals and physicians to improve efficiency and decrease costs while maintaining or improving quality care. (c) Exception from physician self-Referral prohibition Section 1877(e) of the Social Security Act ( 42 U.S.C. 1395nn(e) ) is amended by adding at the end the following new paragraph: (9) Payments under certain incentive payment programs between hospitals and physicians (A) In general In the case of a monetary incentive payment which is made by a hospital to a physician under an incentive payment program (as defined in subparagraph (B)) that meets requirements established by the Secretary in consultation with the Attorney General and the Inspector General of the Department of Health and Human Services for purposes of this paragraph. (B) Incentive payment program defined In this paragraph, the term incentive payment program means a program that is designed to align incentives among hospitals and physicians (through techniques such as product standardization, the substitution of lower cost products, and care coordination initiatives that encourage medically appropriate decreases in length of stay) to improve efficiency and decrease costs while maintaining or improving quality. . (d) Safe harbor from antikickback and other Federal sanctions (1) Section 1128B(b)(3) of the Social Security Act (42 U.S.C. 1320a–7b(b)(3)) is amended— (A) by striking and at the end of subparagraph (I); (B) in subparagraph (J), by moving the indentation 2 ems to the left and by striking the period at the end and inserting ; and ; and (C) by adding at the end the following new subparagraph: (K) any monetary incentive payment which is made by a hospital to a physician under an incentive payment program (as defined in subparagraph (B) of section 1877(e)(9)) that meets requirements established by the Inspector General of the Department of Health and Human Services in consultation with the Attorney General for purposes of applying this subparagraph (which requirements needs not be the same as those established under subparagraph (A) of such section). . (2) Section 1128A(b)(1) of the Social Security Act (42 U.S.C. 1320a–7a(b)(1)) is amended by inserting (other than a monetary incentive payment described in section 1128B(b)(3)(K)) after makes a payment . (e) Publication of guidance The Secretary of Health and Human Services and the Inspector General of the Department of Health and Human Services— (1) not later than 6 months after the date of the enactment of this Act, shall jointly publish a solicitation of comments to carry out the amendments made by this section; and (2) not later than 12 months after such date of enactment, shall publish, jointly or separately, such guidance or rules, which may be effective on an interim, final basis, as may be necessary to carry out such amendments in a timely manner. (f) Construction Nothing in this section (or the amendments made by this section) shall be construed as affecting the operation of the shared savings program. (g) Shared savings program defined In this section, the term shared savings program means such program under section 1899 of the Social Security Act ( 42 U.S.C. 1395jjj ).