[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2959 Introduced in House (IH)]

111th CONGRESS
  1st Session
                                H. R. 2959

    To amend title XVIII of the Social Security Act to establish an 
  accountable care organization pilot program to reduce the growth of 
  expenditures and improve health outcomes under the Medicare Program.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             June 18, 2009

 Mr. Welch (for himself, Mr. Pomeroy, Mr. Van Hollen, Mr. Carney, Mr. 
 Kind, Mr. Levin, Ms. Linda T. Sanchez of California, Mr. Inslee, Mr. 
    Higgins, Mr. Thompson of California, Mr. Lewis of Georgia, Mr. 
  Pascrell, Ms. Schwartz, Mr. Space, Mr. Markey of Massachusetts, Mr. 
    Cooper, Mr. Perlmutter, Mr. Braley of Iowa, Mr. Blumenauer, Mr. 
   Yarmuth, and Mr. Tanner) 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 amend title XVIII of the Social Security Act to establish an 
  accountable care organization pilot program to reduce the growth of 
  expenditures and improve health outcomes under the Medicare Program.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Accountable Care Promotion Act of 
2009''.

SEC. 2. ACCOUNTABLE CARE ORGANIZATION PILOT PROGRAM.

    Title XVIII of the Social Security Act is amended by inserting 
after section 1866C the following new section:

             ``accountable care organization pilot program

    ``Sec. 1866D.  (a) In General.--The Secretary shall conduct a pilot 
program (in this section referred to as the `pilot program') to test 
different payment incentive models, including (to the extent 
practicable) the specific payment incentive models described in 
subsection (c), designed to reduce the growth of expenditures and 
improve health outcomes in the provision of items and services under 
this title to applicable beneficiaries (as defined in subsection (d)) 
by qualifying accountable care organizations (as defined in subsection 
(b)(1)) in order to--
            ``(1) promote accountability for a patient population and 
        coordinate items and services under parts A and B;
            ``(2) encourage investment in infrastructure and redesigned 
        care processes for high quality and efficient service delivery; 
        and
            ``(3) reward physician practices for the provision of high 
        quality and efficient health care services.
    ``(b) Qualifying Accountable Care Organizations (ACOs).--
            ``(1) Qualifying aco defined.--
                    ``(A) In general.--In this section, the terms 
                `qualifying accountable care organization' and 
                `qualifying ACO' mean a group of physicians that--
                            ``(i) is organized at least in part for the 
                        purpose of providing physicians' services; and
                            ``(ii) meets such criteria as the Secretary 
                        determines to be appropriate to participate in 
                        the pilot program, including the criteria 
                        specified in paragraph (2).
                    ``(B) Inclusion of other providers.--Nothing in 
                this subsection shall be construed as preventing a 
                qualifying ACO from including a hospital or any other 
                provider of services or supplier furnishing items or 
                services for which payment may be made under this title 
                that is affiliated with the ACO under an arrangement 
                structured so that such provider or supplier 
                participates in the pilot program and shares in any 
                incentive payments under the pilot program.
                    ``(C) Physician.--In this section, the term 
                `physician' includes, except as the Secretary may 
                otherwise provide, any individual who furnishes 
                services for which payment may be made as physicians' 
                services.
                    ``(D) Other services.--Nothing in this paragraph 
                shall be construed as preventing a qualifying ACO from 
                furnishing items or services, for which payment may not 
                made under this title, for purposes of achieving 
                performance goals under the pilot program.
            ``(2) Qualifying criteria.--The following are criteria 
        described in this paragraph for an organized group of 
        physicians to be a qualifying ACO:
                    ``(A) The group has a legal structure that would 
                allow the group to receive and distribute incentive 
                payments under this section.
                    ``(B) The group includes a sufficient number of 
                primary care physicians for the applicable 
                beneficiaries for whose care the group is accountable 
                (as determined by the Secretary).
                    ``(C) The group is comprised of only participating 
                physicians.
                    ``(D) The group reports on quality measures in such 
                form, manner, and frequency as specified by the 
                Secretary (which may be for the group, for providers of 
                services and suppliers, or both).
                    ``(E) The group reports to the Secretary (in a 
                form, manner, and frequency as specified by the 
                Secretary) such data as the Secretary determines 
                appropriate to monitor and evaluate the pilot program.
                    ``(F) The group provides notice to applicable 
                beneficiaries regarding the pilot program (as 
                determined appropriate by the Secretary).
                    ``(G) The group contributes to a best practices 
                network or website, that shall be maintained by the 
                Secretary for the purpose of sharing strategies on 
                quality improvement, care coordination, and efficiency 
                that the groups believe are effective.
                    ``(H) The group utilizes patient-centered processes 
                of care, including those that emphasize patient and 
                caregiver involvement in planning and monitoring of 
                ongoing care management plan.
                    ``(I) The group meets other criteria determined to 
                be appropriate by the Secretary.
    ``(c) Specific Payment Incentive Models.--The specific payment 
incentive models described in this subsection are the following:
            ``(1) Performance target model.--Under the performance 
        target model under this paragraph (in this paragraph referred 
        to as the `performance target model'):
                    ``(A) In general.--A qualifying ACO qualifies to 
                receive an incentive payment if expenditures for 
                applicable beneficiaries are less than a target 
                spending level or a target rate of growth. The 
                incentive payment shall be made only if savings are 
                greater than would result from normal variation in 
                expenditures for items and services covered under parts 
                A and B.
                    ``(B) Computation of performance target.--
                            ``(i) In general.--The Secretary shall 
                        establish a performance target for each 
                        qualifying ACO comprised of a base amount 
                        (described in clause (ii)) increased to the 
                        current year by an adjustment factor (described 
                        in clause (iii)). Such a target may be 
                        established on a per capita basis, as the 
                        Secretary determines to be appropriate.
                            ``(ii) Base amount.--For purposes of clause 
                        (i), the base amount in this subparagraph is 
                        equal to the average total payments (or allowed 
                        charges) under parts A and B (and may include 
                        part D, if the Secretary determines 
                        appropriate) for applicable beneficiaries for 
                        whom the qualifying ACO furnishes items and 
                        services in a base period determined by the 
                        Secretary. Such base amount may be determined 
                        on a per capita basis.
                            ``(iii) Adjustment factor.--For purposes of 
                        clause (i), the adjustment factor in this 
                        clause may equal an annual per capita amount 
                        that reflects changes in expenditures from the 
                        period of the base amount to the current year 
                        that would represent an appropriate performance 
                        target for applicable beneficiaries (as 
                        determined by the Secretary). Such adjustment 
                        factor may be determined as an amount or rate, 
                        may be determined on a national, regional, 
                        local, or organization-specific basis, and may 
                        be determined on a per capita basis. Such 
                        adjustment factor also may be adjusted for risk 
                        as determined appropriate by the Secretary.
                            ``(iv) Rebasing.--Under this model the 
                        Secretary shall periodically rebase the base 
                        expenditure amount described in clause (ii).
                    ``(C) Meeting target.--
                            ``(i) In general.--Subject to clause (ii), 
                        a qualifying ACO that meet or exceeds annual 
                        quality and performance targets for a year 
                        shall receive an incentive payment for such 
                        year equal to a portion (as determined 
                        appropriate by the Secretary) of the amount by 
                        which payments under this title for such year 
                        relative are estimated to be below the 
                        performance target for such year, as determined 
                        by the Secretary. The Secretary may establish a 
                        cap on incentive payments for a year for a 
                        qualifying ACO.
                            ``(ii) Limitation.--The Secretary shall 
                        limit incentive payments to each qualifying ACO 
                        under this paragraph as necessary to ensure 
                        that the aggregate expenditures with respect to 
                        applicable beneficiaries for such ACOs under 
                        this title inclusive of incentive payments 
                        described in this subparagraph do not exceed 
                        the amount that the Secretary estimates would 
                        be expended for such ACO for such beneficiaries 
                        if the pilot program under this section were 
                        not implemented.
                    ``(D) Reporting and other requirements.--In 
                carrying out such model, the Secretary may (as the 
                Secretary determines to be appropriate) incorporate 
                reporting requirements, incentive payments, and 
                penalties related to the physician quality reporting 
                initiative (PQRI), electronic prescribing, electronic 
                health records, and other similar initiatives under 
                section 1848, and may use alternative criteria than 
                would otherwise apply under such section for 
                determining whether to make such payments. The 
                incentive payments described in this subparagraph shall 
                not be included in the limit described in subparagraph 
                (C)(ii) or in the performance target model described in 
                this paragraph.
            ``(2) Partial capitation model.--
                    ``(A) In general.--Subject to subparagraph (B), a 
                partial capitation model described in this paragraph 
                (in this paragraph referred to as a `partial capitation 
                model') is a model in which a qualifying ACO would be 
                at financial risk for some, but not all, of the items 
                and services covered under parts A and B, such as at 
                risk for some or all physicians' services or all items 
                and services under part B. The Secretary may limit a 
                partial capitation model to ACOs that are highly 
                integrated systems of care and to ACOs capable of 
                bearing risk, as determined to be appropriate by the 
                Secretary.
                    ``(B) No additional program expenditures.--Payments 
                to a qualifying ACO for applicable beneficiaries for a 
                year under the partial capitation model shall be 
                established in a manner that does not result in 
                spending more for such ACO for such beneficiaries than 
                would otherwise be expended for such ACO for such 
                beneficiaries for such year if the pilot program were 
                not implemented, as estimated by the Secretary.
            ``(3) Other payment models.--
                    ``(A) In general.--Subject to subparagraph (B), the 
                Secretary may develop other payment models that meet 
                the goals of this pilot program to improve quality and 
                efficiency.
                    ``(B) No additional program expenditures.--
                Subparagraph (B) of paragraph (2) shall apply to a 
                payment model under subparagraph (A) in a similar 
                manner as such subparagraph (B) applies to the payment 
                model under paragraph (2).
    ``(d) Applicable Beneficiaries.--
            ``(1) In general.--In this section, the term `applicable 
        beneficiary' means, with respect to a qualifying ACO, an 
        individual who--
                    ``(A) is enrolled under part B and entitled to 
                benefits under part A;
                    ``(B) is not enrolled in a Medicare Advantage plan 
                under part C or a PACE program under section 1894; and
                    ``(C) meets such other criteria as the Secretary 
                determines appropriate, which may include criteria 
                relating to frequency of contact with physicians in the 
                ACO.
            ``(2) Following applicable beneficiaries.--The Secretary 
        may monitor data on expenditures and quality of services under 
        this title after an applicable beneficiary discontinues 
        receiving services under this title through a qualifying ACO.
    ``(e) Implementation.--
            ``(1) Starting date.--The pilot program shall begin no 
        later than January 1, 2011. An agreement with a qualifying ACO 
        under the pilot program may cover a multi-year period of 
        between 3 and 5 years.
            ``(2) Waiver.--The Secretary may waive such provisions of 
        this title and title XI as the Secretary determines necessary 
        in order implement the pilot program.
            ``(3) Performance results reports.--The Secretary shall 
        report performance results to qualifying ACOs under the pilot 
        program at least annually.
            ``(4) Limitations on review.--There shall be no 
        administrative or judicial review under section 1869, section 
        1878, or otherwise of--
                    ``(A) the elements, parameters, scope, and duration 
                of the pilot program;
                    ``(B) the selection of qualifying ACOs for the 
                pilot program;
                    ``(C) the establishment of targets, measurement of 
                performance, determinations with respect to whether 
                savings have been achieved and the amount of savings;
                    ``(D) determinations regarding whether, to whom, 
                and in what amounts incentive payments are paid; and
                    ``(E) decisions about the extension of the program 
                under subsection (g), expansion of the program under 
                subsection (h) or extensions under subsection (i).
            ``(5) Administration.--Chapter 35 of title 44, United 
        States Code shall not apply to this section.
    ``(f) Evaluation.--The Secretary shall evaluate the payment 
incentive model for each qualifying ACO under the pilot program to 
assess impacts on beneficiaries, providers of services, suppliers and 
the program under this title. The Secretary shall make such evaluation 
publicly available within 60 days of the date of completion of such 
report.
    ``(g) Extension of Pilot Agreement With Successful Organizations.--
            ``(1) Reports to congress.--Not later than 2 years after 
        the date the first agreement is entered into under this 
        section, and biennially thereafter for six years, the Secretary 
        shall report to Congress on the use of authorities under the 
        pilot program. Each report shall address the impact of the use 
        of those authorities on expenditures, access, and quality under 
        this title.
            ``(2) Extension.--Subject to the monitoring described in 
        paragraph (1), with respect to a qualifying ACO, the Secretary 
        may extend the duration of the agreement for such ACO under the 
        pilot program as the Secretary determines appropriate if--
                    ``(A) the ACO receives incentive payments with 
                respect to any of the first 4 years of the pilot 
                agreement and is consistently meeting quality 
                standards; or
                    ``(B) the ACO is consistently exceeding quality 
                standards and is not increasing spending under the 
                program.
            ``(3) Termination.--The Secretary may terminate an 
        agreement with a qualifying ACO under the pilot program if such 
        ACO did not receive incentive payments or consistently failed 
        to meet quality standards in any of the first 3 years under the 
        program.
    ``(h) Expansion to Additional ACOs.--
            ``(1) Testing and refinement of payment incentive models.--
        Subject to the evaluation described in subsection (f), the 
        Secretary may enter into agreements under the pilot program 
        with additional qualifying ACOs to further test and refine 
        payment incentive models with respect to qualifying ACOs.
            ``(2) Expanding use of successful models to program 
        implementation.--
                    ``(A) In general.--Subject to subparagraph (B), the 
                Secretary may issue regulations to implement, on a 
                permanent basis, the components of the pilot program 
                that are beneficial to the program under this title, as 
                determined by the Secretary.
                    ``(B) Certification.--The Chief Actuary of the 
                Centers for Medicare & Medicaid Services shall certify 
                that the expansion of the components of the program 
                described in subparagraph (A) would result in estimated 
                spending that would be less than what spending would 
                otherwise be estimated to be in the absence of such 
                expansion.
    ``(i) Treatment of Physician Group Practice Demonstration.--
            ``(1) Extension.--The Secretary may enter in to an 
        agreement with a qualifying ACO under the demonstration under 
        section 1866A, subject to rebasing and other modifications 
        deemed appropriate by the Secretary, until the pilot program 
        under this section is operational.
            ``(2) Transition.--For purposes of extension of an 
        agreement with a qualifying ACO under subsection (g)(2), the 
        Secretary shall treat receipt of an incentive payment for a 
        year by an organization under the physician group practice 
        demonstration pursuant to section 1866A as a year for which an 
        incentive payment is made under such subsection, as long as 
        such practice group practice organization meets the criteria 
        under subsection (b)(2).
    ``(j) Additional Provisions.--
            ``(1) Authority for separate incentive arrangements.--The 
        Secretary may create separate incentive arrangements (including 
        using multiple years of data, varying thresholds, varying 
        shared savings amounts, and varying shared savings limits) for 
        different categories of qualifying ACOs to reflect natural 
        variations in data availability, variation in average annual 
        attributable expenditures, program integrity, and other matters 
        the Secretary deems appropriate.
            ``(2) Eligibility for medical home bonus payments.--A 
        qualifying ACO shall be eligible for bonus or incentive 
        payments for provision of a medical home (or similar model of 
        care delivery) under section 204 of the Medicare Improvement 
        and Extension Act of 2006 (division B of Public Law 109-432) in 
        the same manner as health care providers participating in the 
        ACO are so eligible.
            ``(3) Encouragement of participation of smaller 
        organizations.--In order to encourage the participation of 
        smaller accountable care organizations under the pilot program, 
        the Secretary may limit a qualifying ACO's exposure to high 
        cost patients under the program.
            ``(4) Involvement in private pay arrangements.--Nothing in 
        this section shall be construed as preventing qualifying ACOs 
        participating in the pilot program from negotiating similar 
        contracts with private payers.
            ``(5) Antidiscrimination limitation.--The Secretary shall 
        not enter into an agreement with an entity to provide health 
        care items or services under the pilot program, or with an 
        entity to administer the program, unless such entity guarantees 
        that it will not deny, limit, or condition the coverage or 
        provision of benefits under the program, for individuals 
        eligible to be enrolled under such program, based on any health 
        status-related factor described in section 2702(a)(1) of the 
        Public Health Service Act.''.
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