I 115th CONGRESS 1st Session H. R. 3920 IN THE HOUSE OF REPRESENTATIVES October 3, 2017 Mrs. Walorski introduced the following bill; which was referred to the Committee on Ways and Means , and in addition to the Committee on Energy and Commerce , 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 establish a Medicare demonstration program on the use of third-party interest-free payment arrangements to reduce Medicare hospital part A bad debt claims.

1. Medicare demonstration program on the use of third-party interest-free payment arrangements to reduce Medicare hospital part A bad debt claims (a) In general The Secretary of Health and Human Services (in this section referred to as the Secretary ) shall establish a 3-year demonstration program (in this section referred to as the demonstration program ) in 5 States to determine the impact on patient engagement and satisfaction, health outcomes, and claims for Medicare hospital part A bad debt (as defined in subsection (d)(2)) of hospitals’ implementing third-party interest-free payment arrangements (as defined in subsection (b)). (b) Third-Party interest-Free payment arrangement defined In this section, the term third-party interest-free payment arrangement means, with respect to a hospital and individuals who are receiving inpatient hospital services for which payment may be made under part A of title XVIII of the Social Security Act, an arrangement between the hospital, a third-party, and such individuals under which— (1) the hospital offers to all such individuals the option of making payment of Medicare part A cost-sharing under such an arrangement for such services rather than through the routine billing process for such cost-sharing; (2) in the case of any such individual who agrees to such offer, the hospital assigns to the third party the rights of collection for such Medicare part A cost-sharing from such individual and efforts for such collection by the third party pursuant to this section shall be treated as reasonable collection efforts by the hospital for purposes of section 413.89(e) of title 42 of the Code of Federal Regulations (or any successor regulation); (3) in the case of any such individual who does not agree to such offer, the hospital payment of Medicare part A cost-sharing for such services shall continue to be made through the routine billing process for such cost-sharing (including with respect to claims for Medicare hospital part A bad debt); and (4) the third party— (A) participates in a level of financial engagement and education with all such individuals who agree to such offer to ensure such individuals are able to afford such cost-sharing payments; (B) in collecting the amounts so owed, permits all such individuals who agree to such offer to make payment over time through a payment plan that does not charge interest with respect to the balance of the amount so owed; and (C) pays the hospital the amount so collected under the arrangement less a fee that does not exceed 15 percent of the amount so collected. (c) Payment incentive The demonstration program shall provide that a hospital that participates in such a third-party interest free payment arrangement under the program and demonstrates improved patient engagement and satisfaction, improved health outcomes, and a reduction in the number of claims for Medicare hospital part A bad debt that are reported to the Secretary is paid an amount equal to 10 percent of the original amount owed in Medicare part A cost-sharing that is collected under the arrangement. Such amount shall be paid from funds appropriated (under subsection (f)(1) of section 1115A of the Social Security Act ( 42 U.S.C. 1315a )) for activities to carry out such section. (d) Report to Congress After the completion of the demonstration program, the Secretary shall submit a report on the demonstration program to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate. The report shall include an analysis of whether the demonstration program reduced the number and amount of Medicare hospital part A bad debt claims and if there were improved health outcomes for Medicare beneficiaries who did not forgo medical care due to their inability to pay for Medicare part A cost-sharing. (e) Other definitions In this section: (1) Medicare part A cost-sharing The term Medicare part A cost-sharing means, with respect to a hospital, amounts owed to the hospital that are derived from deductibles and coinsurance imposed under part A of title XVIII of the Social Security Act ( 42 U.S.C. 1395c et seq.). (2) Medicare hospital part A bad debt The term Medicare hospital part A bad debt means bad debt of a hospital that is attributable to the inability of the hospital to collect Medicare part A cost-sharing, taking into account collections made under third-party interest-free payment arrangements made under the demonstration program.