[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4673 Introduced in House (IH)]

113th CONGRESS
  2d Session
                                H. R. 4673

  To amend title XVIII of the Social Security Act to provide bundled 
payments for post-acute care services under parts A and B of Medicare, 
                        and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 19, 2014

  Mr. McKinley (for himself and Mr. Price of Georgia) 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 provide bundled 
payments for post-acute care services under parts A and B of Medicare, 
                        and for other purposes.

    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 ``Bundling and Coordinating Post-Acute 
Care Act of 2014'' and as the ``BACPAC Act of 2014''.

SEC. 2. PURPOSES.

    The purposes of this Act are to--
            (1) foster the delivery of high-quality post-acute care 
        services in the most cost-effective manner possible;
            (2) preserve the ability of patients, with the guidance of 
        their physicians, to select their preferred providers of post-
        acute care services;
            (3) promote competition among post-acute care providers on 
        the basis of quality, cost, accountability, and customer 
        service;
            (4) achieve long-term sustainability by ensuring 
        operational stability through regional breadth and the 
        engagement of experienced care PAC coordinators;
            (5) advance innovation in fields including telehealth, care 
        coordination, medication management, and hospitalization 
        avoidance; and
            (6) provide for the financial security of the Medicare 
        program by achieving substantial program savings through 
        maximized efficiencies, cost avoidance, and outcomes 
        improvement.

SEC. 3. PROVIDING BUNDLED PAYMENTS FOR POST-ACUTE CARE SERVICES UNDER 
              PARTS A AND B OF MEDICARE.

    Title XVIII of the Social Security Act is amended by inserting 
after section 1866E (42 U.S.C. 1395cc-5) the following new section:

       ``providing bundled payments for post-acute care services

    ``Sec. 1866F.  (a) In General.--For a PAC bundle with respect to 
qualifying discharges occurring on or after January 1, 2016, instead of 
the payment otherwise provided under parts A and B, there shall be paid 
a single payment amount (determined under subsection (d) and as limited 
under paragraph (4) of such subsection) to be paid to a PAC coordinator 
(as described in subsection (c)) selected by an individual under such 
subsection.
    ``(b) PAC-Related Definitions.--In this section:
            ``(1) PAC bundle.--The term `PAC bundle' means PAC services 
        furnished to an individual during a PAC period in a PAC area.
            ``(2) PAC services.--
                    ``(A) In general.--The term `PAC services' 
                includes--
                            ``(i) post-hospital extended care services, 
                        subject to subparagraph (C)(i);
                            ``(ii) home health services, subject to 
                        subparagraph (C)(ii);
                            ``(iii) inpatient services provided in a 
                        rehabilitation facility, subject to 
                        subparagraph (C)(iii);
                            ``(iv) inpatient hospital services provided 
                        by a long-term care hospital, subject to 
                        subparagraph (C)(iv);
                            ``(v) durable medical equipment;
                            ``(vi) outpatient prescription drugs and 
                        biologicals; and
                            ``(vii) skilled nursing facility services.
                    ``(B) Exceptions.--Such term does not include--
                            ``(i) physicians' services;
                            ``(ii) hospice care;
                            ``(iii) outpatient hospital services;
                            ``(iv) ambulance services;
                            ``(v) outpatient physical therapy services;
                            ``(vi) outpatient occupational therapy 
                        services;
                            ``(vii) outpatient speech-language 
                        pathology services; and
                            ``(viii) the items and services described 
                        in section 1861(s)(9).
                    ``(C) Nonapplication of certain coverage 
                limitations.--
                            ``(i) Waiver of skilled nursing facility 
                        three-day stay requirement.--In applying 
                        subparagraph (A)(i), the 3-day stay requirement 
                        described in section 1861(i) (requiring that an 
                        individual's inpatient stay in a discharging 
                        hospital be for a duration of not less than 3 
                        consecutive days) shall not apply.
                            ``(ii) Waiver of homebound requirement for 
                        home health services.--In applying subparagraph 
                        (A)(ii), the requirements cited in sections 
                        1814(a)(2)(C) and 1835(a)(2)(A) that home 
                        health services are or were required because 
                        the individual is or was confined to the home 
                        of the individual shall not apply.
                            ``(iii) Nonapplication of rehabilitation 
                        facility percentage requirement.--In applying 
                        subparagraph (A)(iii), any requirement that a 
                        specified percentage of the inpatient 
                        population served by the facility require 
                        intensive rehabilitation services for treatment 
                        of one or more of the conditions specified in 
                        section 412.29(b)(2) of title 42, Code of 
                        Federal Regulations, as of December 19, 2013, 
                        shall not apply.
                            ``(iv) Nonapplication of long-term care 
                        hospital percentage requirement.--In applying 
                        subparagraph (A)(iv), any requirement that a 
                        specified percentage of the discharged Medicare 
                        inpatient population of the long-term care 
                        hospital or its satellite facility be admitted 
                        to the hospital or its satellite facility from 
                        its co-located hospital shall not apply.
            ``(3) PAC period.--The term `PAC period' means the period 
        beginning on the date of a qualifying discharge (as defined in 
        paragraph (10)) and ending on the date that is the earlier of 
        the following:
                    ``(A) The date that is 90 days after the date of 
                such discharge.
                    ``(B) The date on which the individual is admitted 
                to a hospital for purposes of receiving services for a 
                condition that is not related to the condition for 
                which the individual received the acute care inpatient 
                hospital services described in paragraph (10)(A).
            ``(4) PAC area.--The term `PAC area' means an area with 
        respect to which a PAC coordinator has a PAC agreement in 
        effect under subsection (c)(1)(B).
            ``(5) PAC physician.--The term `PAC physician' means, with 
        respect to an individual receiving a PAC bundle, the physician 
        who has primary responsibility with respect to supervising the 
        delivery of services during the course of a PAC period.
            ``(6) PAC provider.--The term `PAC provider' means, with 
        respect to PAC services, the provider of services or supplier 
        furnishing such services.
            ``(7) PAC network agreement.--The term `PAC network 
        agreement' means, in the case that an individual has selected a 
        PAC coordinator under subsection (c)(4)(A) for the furnishing 
        of PAC services, an agreement of a PAC coordinator with one or 
        more PAC providers to provide such services to such individual.
            ``(8) PAC readmission.--The term `PAC readmission' means, 
        with respect to an individual receiving a PAC bundle, the 
        individual's admission to a hospital within 90 days of the date 
        of the qualifying discharge of the individual, for purposes of 
        receiving services for a condition that is related to the 
        condition for which the individual received the acute care 
        inpatient hospital services described in paragraph (10)(A).
            ``(9) PAC assessment tool.--The term `PAC assessment tool' 
        means the Continuity Assessment Record and Evaluation (CARE) 
        tool (or such equivalent assessment tool as the Secretary may 
        specify).
            ``(10) Qualifying discharge.--Subject to subsection (e), 
        the term `qualifying discharge' means a discharge after 
        receiving acute care inpatient hospital services (as defined by 
        the Secretary) in a subsection (d) hospital (as defined in 
        section 1886(d)(1)(B)) for which the discharge plan includes 
        the furnishing of PAC services.
            ``(11) CRG.--The term `CRG' means a condition-related group 
        established under subsection (d)(1).
    ``(c) PAC Coordinators.--
            ``(1) In general.--In this section, the term `PAC 
        coordinator' means an entity (such as a hospital, health 
        insurance issuer, third-party benefit manager, or PAC provider) 
        that--
                    ``(A) is certified, under a process established by 
                the Secretary, as meeting appropriate requirements 
                specified by the Secretary, including the requirements 
                specified in paragraph (2); and
                    ``(B) has entered into and has in effect a PAC 
                agreement with the Secretary described in paragraph 
                (3).
            ``(2) Requirements.--The requirements specified in this 
        paragraph, with respect to an entity serving a PAC area, are 
        the following:
                    ``(A) Financial solvency.--The entity has the 
                capacity, and provides sufficient assurances of 
                solvency, to bear financial risk as a PAC coordinator 
                under this section.
                    ``(B) Capacity to manage care and funding.--The 
                entity has the capability to manage the care and 
                funding for PAC services in such area.
                    ``(C) PAC network agreements.--
                            ``(i) Network capacity to serve pac area.--
                        The entity has entered into PAC network 
                        agreements with one or more PAC providers in a 
                        PAC area in a manner sufficient to ensure the 
                        availability of PAC services for individuals 
                        residing in the area who select the entity for 
                        the furnishing of PAC services.
                            ``(ii) Limitation on balance billing.--Such 
                        a PAC network agreement shall provide that the 
                        PAC provider shall accept as payment in full 
                        for PAC services furnished by such PAC provider 
                        the applicable amount described in paragraph 
                        (3)(C).
                            ``(iii) Quality assurance.--Such a PAC 
                        network agreement shall provide that the PAC 
                        provider shall have in effect a written plan of 
                        quality assurance and improvement, and 
                        procedures implementing such plan, that meet 
                        such quality standards as the Secretary may 
                        specify.
                    ``(D) Credit-worthiness.--The entity has 
                demonstrated credit-worthiness.
                    ``(E) Medical director.--The entity employs or 
                contracts with a medical director who has an 
                appropriate medical background.
            ``(3) Terms of pac agreement.--The PAC agreement described 
        in this paragraph between an entity and the Secretary shall, 
        with respect to the PAC area specified under subparagraph (B), 
        have such terms and conditions as are specified by the 
        Secretary consistent with this section and shall include the 
        following:
                    ``(A) Care coordination.--With respect to an 
                individual who selects the entity under paragraph 
                (4)(A)--
                            ``(i) the entity shall select one or more 
                        PAC providers in such area to furnish, directly 
                        or indirectly, clinically appropriate PAC 
                        services (as determined through the use of the 
                        PAC assessment tool) to the individual; and
                            ``(ii) the entity shall coordinate the 
                        furnishing of all such services for the 
                        individual.
                    ``(B) PAC area covered.--The PAC agreement shall 
                specify the PAC area under the PAC agreement.
                    ``(C) Payment amount for pac services.--For PAC 
                services furnished by a PAC provider and furnished with 
                respect to a qualifying discharge that occurs--
                            ``(i) before January 1, 2019, the entity 
                        shall pay the PAC provider under the PAC 
                        network agreement between the entity and the 
                        PAC provider--
                                    ``(I) with respect to such PAC 
                                services that are services for which 
                                the PAC provider would receive payment 
                                under this title without regard to this 
                                section, an amount that is not less 
                                than the amount that would otherwise be 
                                paid to such PAC provider under this 
                                title for such services; and
                                    ``(II) with respect to such PAC 
                                services that are services for which 
                                the PAC provider would not receive 
                                payment under this title without regard 
                                to this section, an amount specified 
                                under such PAC network agreement; and
                            ``(ii) on or after January 1, 2019, the 
                        entity shall pay the PAC provider under such 
                        PAC network agreement an amount specified under 
                        such agreement.
                    ``(D) Distribution of savings.--Insofar as the 
                payment amount to a PAC coordinator under subsection 
                (d)(3) for a PAC bundle furnished to an individual is 
                greater than the aggregate amounts paid to PAC 
                providers under subparagraph (C) for such bundle for 
                such individual, the entity shall not retain an amount 
                greater than 70 percent of such savings and shall pay 
                an amount equivalent to--
                            ``(i) not less than 10 percent of such 
                        savings to such PAC providers;
                            ``(ii) not less than 10 percent of such 
                        savings to the PAC physician of the individual; 
                        and
                            ``(iii) in the case that there is no PAC 
                        readmission of the individual, not less than 10 
                        percent of such savings to the hospital 
                        discharging the individual immediately prior to 
                        the furnishing of such services.
                Payments shall be made under each of clauses (i), (ii), 
                and (iii) to individuals and entities independent of 
                whether payment may be made to such an individual or 
                entity under another such clause.
                    ``(E) Maintenance of advisory committee.--The 
                entity shall maintain an advisory committee of PAC 
                providers and of patient stakeholders to advise the 
                entity regarding its activities under this section.
            ``(4) Selection and change of selection of pac coordinators 
        by individual.--
                    ``(A) In general.--The Secretary shall establish a 
                process for the selection and change of selection of a 
                PAC coordinator by an individual who is receiving 
                inpatient hospital services and whose discharge has 
                been or is likely to be classified as a qualifying 
                discharge.
                    ``(B) Limitation on selection due to network 
                adequacy.--The process established under subparagraph 
                (A) may not allow an individual to select (or to change 
                a selection to) a PAC coordinator in a PAC area unless 
                the PAC coordinator has entered into PAC network 
                agreements with such PAC providers in such PAC area 
                such that the PAC coordinator has a sufficient number 
                and range of health care professionals and providers 
                willing to provide services under the terms of the PAC 
                agreement.
            ``(5) Construction relating to pac coordinators offering 
        non-pac services.--Nothing in this section shall be construed 
        as prohibiting PAC providers from offering, either directly or 
        indirectly, services that contribute to patient care, safety, 
        and readmission avoidance (such as medication management, 
        telehealth technologies, home environment services, and 
        transportation services) that are not PAC services.
            ``(6) Construction regarding flexibility in the delivery of 
        pac services.--Nothing in this section shall be construed to 
        prevent a PAC network agreement from permitting a PAC provider 
        to subcontract for the furnishing of PAC services that the PAC 
        provider is otherwise obligated to provide under the agreement 
        so long as the subcontractor meets the same terms and 
        conditions in furnishing such services as would apply if the 
        PAC provider were to provide such services.
    ``(d) Payment Amounts.--
            ``(1) Classification of conditions by crgs; methodology for 
        classification.--The Secretary shall establish a classification 
        of the conditions of individuals receiving a PAC bundle by CRG 
        and a methodology for classifying specific PAC bundles within 
        these groups. The methodology shall, to the extent feasible, 
        classify such bundles through the use of the PAC assessment 
        tool.
            ``(2) Computation of base rate.--
                    ``(A) In general.--The Secretary shall compute an 
                average payment rate for PAC bundles classified in each 
                CRG and furnished during a PAC period ending in the 
                base year selected under subparagraph (B).
                    ``(B) Base year selection.--The Secretary shall 
                select as a base year the most recent year ending 
                before the date of the enactment of this section for 
                which data are available to carry out this section.
                    ``(C) Budget-neutral computation.--The average 
                payment rate for a PAC bundle classified in a CRG shall 
                be computed in a manner so that, if it had been applied 
                in the base year, the aggregate payments for PAC 
                bundles classified in such CRG and furnished during a 
                PAC period ending in such year would be equivalent to 
                the aggregate payments under this title for such 
                bundles.
            ``(3) Calculation of payment amount based on base rate.--
        Subject to the succeeding provisions of this subsection, the 
        amount of the single payment described in this paragraph, with 
        respect to a PAC bundle classified within a CRG and furnished 
        to an individual during a PAC period ending--
                    ``(A) in 2016, is the base average payment rate for 
                such bundle computed under paragraph (2), increased by 
                such percentage as the Secretary estimates is the 
                average rate of increase in payments under this title 
                for such bundle between the base year and 2016; and
                    ``(B) in a subsequent year, is the amount of the 
                single payment for such bundle computed under this 
                paragraph for the previous year, increased by a 
                percentage specified by the Secretary consistent with 
                paragraph (4).
            ``(4) Calculation of annual percentage increase.--In 
        calculating the percentage increases applied under paragraph 
        (3)(B), the Secretary shall ensure that total expenditures for 
        all PAC bundles provided in accordance with this section do not 
        exceed 96 percent of the applicable baseline over the 8-fiscal-
        year period beginning with fiscal year 2016.
            ``(5) Adjustment for readmissions during pac period.--The 
        amount paid to a PAC coordinator under this subsection for a 
        PAC bundle in a PAC period that includes a PAC readmission 
        shall be reduced by an amount equal to the aggregate amount of 
        payments made for such PAC readmission of such individual.
            ``(6) Adjustment for geographic and risk factors.--The 
        Secretary shall adjust the amount of payment described in 
        paragraph (3) with respect to services furnished to an 
        individual in a PAC area in a budget-neutral manner for a 
        year--
                    ``(A) by an appropriate factor that reflects 
                variations in costs for the furnishing of PAC bundles 
                among different geographic areas;
                    ``(B) by an appropriate factor that accounts for 
                variations in costs for the furnishing of such PAC 
                services to the individual based upon the health status 
                of the individual; and
                    ``(C) by an amount that accounts for historical 
                local (hospital referral cluster) pricing.
            ``(7) Adjustment in case of change of selection by 
        individual.--In the case of a change of selection of PAC 
        coordinator by the individual under subsection (c)(4) during a 
        PAC period, the Secretary shall adjust the amount of payment 
        described in paragraph (3) in order to provide appropriate 
        partial payments to be paid to the PAC coordinator selected 
        initially by the individual and to the PAC coordinator selected 
        under the change of selection by the individual. The method of 
        calculating the respective amounts of such appropriate partial 
        payments shall be based on the method used for the Home Health 
        Partial Episode Payment adjustment.
            ``(8) Use of pac assessment tool for purposes of adjustment 
        for risk factors.--In determining an appropriate factor under 
        paragraph (6)(B) with respect to an individual, the Secretary 
        shall take into account an assessment of the individual 
        conducted using the PAC assessment tool.
    ``(e) Phase-In.--
            ``(1) Determination of pac expenditures by crg.--Based on 
        the most recent data available, the Secretary shall determine 
        the aggregate amount of expenditures under this title for PAC 
        services furnished during the PAC period for each CRG (as 
        defined in paragraph (b)(11)).
            ``(2) Ranking of crgs by volume of expenditure.--The 
        Secretary shall rank the CRGs in order based on the aggregate 
        amount of expenditures for PAC services described in clause (i) 
        for each CRG.
            ``(3) Grouping of crgs.--The Secretary shall group CRGs 
        into four groups as follows:
                    ``(A) First group.--The first group consists of the 
                CRGs that have the highest rank under clause (ii) and 
                that collectively account for 25 percent of the 
                aggregate amount of expenditures for PAC services 
                described in clause (i).
                    ``(B) Second group.--The second group consists of 
                the CRGs that have the next highest rank under clause 
                (ii) after the first group in subclause (I) and that 
                collectively account for 25 percent of the aggregate 
                amount of expenditures for PAC services described in 
                clause (i).
                    ``(C) Third group.--The third group consists of the 
                CRGs that have the next highest rank under clause (ii) 
                after the second group in subclause (II) and that 
                collectively account for 25 percent of the aggregate 
                amount of expenditures for PAC services described in 
                clause (i).
                    ``(D) Fourth group.--The fourth group consists of 
                the CRGs that are not included in the first, second, or 
                third group under this clause.
            ``(4) Phase-in by crg grouping.--In applying this section 
        for discharges in--
                    ``(A) 2016, only discharges that are classified 
                within the first group under subclause (I) of clause 
                (iii) shall be included;
                    ``(B) 2017, only discharges that are classified 
                within the first or second group under subclause (I) or 
                (II) of clause (iii) shall be included;
                    ``(C) 2018, only discharges that are classified 
                within the first, second, or third group under 
                subclause (I), (II), or (III) of clause (iii) shall be 
                included; and
                    ``(D) 2019 and subsequent years, discharges that 
                are classified within any group of CRGs shall be 
                included.''.

SEC. 4. TRANSITIONAL CARE MANAGEMENT PAYMENTS FOR PHYSICIANS.

    For purposes of encouraging transitional care management by PAC 
physicians (as defined in section 1866F(b)(5) of the Social Security 
Act), in carrying out section 1848(e) of the Social Security Act (42 
U.S.C. 1395w-4(e)), the Secretary of Health and Human Services shall 
establish a new Transitional Care Management (TCM) code to pay for care 
management by such a PAC physician or revise and expand the use of 
existing TCM codes 99495 and 99494.
                                 <all>