II 118th CONGRESS 1st Session S. 3503 IN THE SENATE OF THE UNITED STATES December 13, 2023 Mr. Whitehouse (for himself, Mr. Barrasso , Mr. Welch , Mr. Tillis , Mr. Cassidy , Mr. Thune , and Mrs. Blackburn ) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To direct the Secretary of Health and Human Services to revise certain regulations in relation to the Medicare shared savings program and other alternative payment arrangements to encourage participation in such program, and for other purposes.

1. Short title This Act may be cited as the Value in Health Care Act of 2023 . 2. Encouraging participation in the medicare shared savings program (a) Removing barriers to shared savings program participation Prior to the beginning of the first performance year (as defined in section 425.20 of title 42, Code of Federal Regulations (or a successor regulation)) that begins at least 90 days after the date of enactment of this Act, the Secretary of Health and Human Services shall revise part 425 of title 42, Code of Federal Regulations, or any successor regulation, to— (1) eliminate any distinction in requirements in such part between a low revenue ACO and a high revenue ACO (as such terms are defined in section 425.20 of title 42, Code of Federal Regulations, or a successor regulation) and, with respect to such a low revenue ACO or high revenue ACO and except as otherwise modified in this Act, apply the requirements of such part as such requirements applied to low revenue ACOs on July 1, 2024, except that the Secretary of Health and Human Services may, if the Secretary determines appropriate, apply less stringent requirements than those requirements that applied to low revenue ACOs as of such date; and (2) remove any provision requiring an accountable care organization to assume responsibility for repayment of any shared losses or participate in a two-sided risk model before the organization has participated for at least 3 years in any program subject to the provisions of part 425 of title 42, Code of Federal Regulations, or any successor regulation, provided that such an organization shall be allowed to elect to participate in such two-sided risk models or models requiring repayment of such losses. (b) Financial methodology enhancements To promote success of shared savings program Prior to the beginning of the first performance year (as defined for purposes of subsection (a)) that begins at least 90 days after the date of enactment of this Act, the Secretary shall— (1) ensure that any methodology used to establish, adjust, or update benchmark expenditures be developed and implemented in a clear and transparent manner, including by making publicly available sufficient information and data to allow interested members of the public to replicate the methodology used by the Secretary and to evaluate the accuracy of the Secretary’s benchmark expenditure calculations; (2) implement a process that allows ACOs to appeal the accuracy of benchmark expenditures in a hearing before an administrative law judge, and ensure that any such appeal be heard within a 90-day period beginning on the date a request for hearing is filed; and (3) require that any regional contributions or expenditures (below the national level) used directly or indirectly to establish, update, or adjust benchmark expenditures be calculated in a manner that excludes the expenditure impact of ACOs in the applicable region, including any regional expenditures associated with Medicare fee-for-service beneficiaries assigned to such ACOs. (c) Shared savings option Prior to the beginning of the first performance year (as defined for purposes of subsection (a)) that begins after the date of the enactment of this Act, and notwithstanding any other provision of law, the Secretary of Health and Human Services shall establish a voluntary full-risk option under the Medicare Shared Savings Program (as described in section 1899 of the Social Security Act ( 42 U.S.C. 1395jjj )) under which the percent of shared savings paid to an ACO under section 1899(d)(2) of the Social Security Act ( 42 U.S.C. 1395jjj(d)(2) ) shall be set at 100 percent, with the ACO bearing commensurate risk of any shared losses. (d) Report Not later than 90 days after the date of enactment of this Act, the Administrator of the Centers for Medicare & Medicaid Services shall submit to the appropriate committees of Congress a report on mechanisms that the agency can take to avoid penalizing ACOs for achieving cost savings and account for regional variations in spending in a manner that prevents arbitrary Medicare Shared Savings Program outcomes for ACOs. Such report shall include specific actions that the Centers for Medicare & Medicaid Services can take to develop and implement effective benchmarks and guardrails for any changes made to the agency’s benchmarking policies. 3. Advanced payment model incentive, participation, and threshold modifications (a) In general Section 1833(z) of the Social Security Act ( 42 U.S.C. 1395l(z) ) is amended— (1) in paragraph (1)(A)— (A) by striking with 2025 and inserting with 2027 ; and (B) by inserting , or, with respect to 2026 and 2027, the scaled percentage amount (as defined in paragraph (2)(C)(vi)) after 3.5 percent ; (2) in paragraph (2)(C)— (A) in clause (i), by striking 75 percent and inserting the applicable percent (as defined in clause (iv)) for such year ; (B) in clause (ii)(I)— (i) in the matter preceding item (aa), by striking 75 percent and inserting the applicable percent (as defined in clause (iv)) for such year ; and (ii) in item (bb)— (I) by striking and other than payments made under title XIX and inserting other than payments made under title XIX ; and (II) by striking State program under that title), and inserting State program under that title, and other than payments made by payers in which no payment or program meeting the requirements described in clause (iii)(II) is available from the payer for participation by the eligible professional) ; and (C) by adding at the end the following new clauses: (iv) Applicable percent defined For purposes of clauses (i) and (ii), subject to clause (v), the term applicable percent means— (I) for each of 2026 and 2027, 50 percent; and (II) for 2028 and each subsequent year, a percent specified by the Secretary, but in no case less than the percent specified under this clause for the preceding year or more than the lesser of 75 percent or 5 percentage points higher than the percent specified under this clause for the preceding year. (v) Alternative applicable percent Notwithstanding any other provision of law, the Secretary may define the applicable percent for purposes of clause (i) or (ii) of this subparagraph or a given alternative payment model (or for purposes of partial qualifying APM participants under section 1848(q)(1)(C)(iii)(III)) to mean a percentage amount that is lower than the amount (or range) otherwise specified in clause (iv) (or, as applicable, under section 1848(q)(1)(C)(iii)(III)), if the Secretary determines there is good cause to support such alternative applicable percent, including where the design of an alternative payment model warrants use of such alternative applicable percent. In no case shall the Secretary designate an alternative applicable percent that exceeds the maximum applicable percent specified in clause (iv) (or, as applicable, under section 1848(q)(1)(C)(iii)(III)) for the applicable year. (vi) Scaled percentage amount For purposes of paragraphs (1)(A) and (4)(B): (I) In general The term scaled percentage amount means a progressively scaled percentage amount designated by the Secretary. Subject to subclause (II), the Secretary shall determine an appropriate progressive percentage scale for different categories of eligible professionals based on programmatic interests in efficiency, equity, and alignment of appropriate incentives. (II) Maximum amount (aa) In general The maximum scaled percentage amount shall be 5 percent and, subject to item (bb), such maximum amount shall apply to an eligible professional with respect to a year if the eligible professional meets or exceeds the threshold under clause (i) or (ii) with respect to such year (determined based on application of the applicable percent, as defined under clause (iv)). (bb) Clarification In no case may an eligible professional who meets or exceeds the threshold under clause (i) or (ii) with respect to a year through application of an alternative applicable percent under clause (v) that is less than the applicable percent (as defined under clause (iv)) be eligible for the maximum scaled percentage amount under this clause. ; and (3) in paragraph (4)(B), by inserting , or, with respect to 2026 and each subsequent year, the scaled percentage amount (as defined in paragraph (2)(C)(vi)) after 3.5 percent . (b) Technical assistance The Secretary of Health and Human Services shall provide education and technical assistance to ACOs and other types of providers (as defined under section 414.1305 of title 42, Code of Federal Regulations (or a successor regulation)) that the Secretary determines to target or otherwise operate in rural or medically underserved areas or to involve material participation by small practice or safety net groups of providers of services and suppliers. Such education and technical assistance may include infrastructure support or access to data analytics to support ACO implementation in such rural or medically underserved areas or to benefit small practice or safety net groups of providers of services and suppliers, or other groups of providers of services and suppliers deemed to require additional support, such as providers of services or suppliers that are new to APMs, including specialists. (c) Partial qualifying APM participant modification Section 1848(q)(1)(C)(iii)(III) of the Social Security Act ( 42 U.S.C. 1395w–4(q)(1)(C)(iii)(III) ) is amended— (1) in item (aa), by striking 50 percent was instead a reference to 40 percent and inserting the applicable percent were instead a reference to the percent that is 10 percentage points less than the applicable percent ; and (2) in item (bb)— (A) by striking 75 percent and inserting the applicable percent ; and (B) by striking 50 percent and inserting the percent that is 10 percentage points less than the applicable percent . 4 Study on alternative payment models and Medicare Advantage Not later than 18 months after the date of enactment of this Act, the Comptroller General of the United States shall conduct a study and submit to the appropriate committees of Congress a report evaluating the benefits and flexibilities provided to support alternative payment models (as defined under section 414.1305 of title 42, Code of Federal Regulations (or a successor regulation)) and Medicare Advantage organizations (as defined in section 1859(a)(1) of the Social Security Act ( 42 U.S.C. 1395w–28(a)(1) )). The objective of such study and report shall be to better understand the effect of different policies under the Medicare program under title XVIII of the Social Security Act ( 42 U.S.C. 1395 et seq. ) with respect to such models and organizations on different types of beneficiaries and participating providers, including specialty, safety net, small practice, and rural providers, with the goal of identifying areas to enhance alignment between such policies and benchmarks, including through mechanisms that could facilitate greater alignment in such policies and benchmarks and to encourage the adoption of value-based arrangements across payers or that could otherwise increase parity in the flexibilities available to alternative payment models and Medicare Advantage organizations under the Medicare program.