[Senate Report 115-146]
[From the U.S. Government Publishing Office]
Calendar No. 206
115th Congress } { Report
SENATE
1st Session } { 115-146
======================================================================
THE CREATING HIGH-QUALITY RESULTS AND OUTCOMES NECESSARY TO IMPROVE
CHRONIC (CHRONIC) CARE ACT OF 2017
_______
August 3, 2017.--Ordered to be printed
_______
Mr. Hatch, from the Committee on Finance, submitted the following
R E P O R T
[To accompany S. 870]
[Including cost estimate of the Congressional Budget Office]
The Committee on Finance, to which was referred the bill
(S. 870) to amend title XVIII of the Social Security Act to
implement Medicare payment policies designed to improve
management of chronic disease, streamline care coordination,
and improve quality outcomes without adding to the deficit,
having considered the same, reports favorably thereon with an
amendment in the nature of a substitute and recommends that the
bill, as amended, do pass.
CONTENTS
Page
I. LEGISLATIVE BACKGROUND............................................1
II. EXPLANATION OF THE BILL...........................................3
A. Amend title XVIII of the Social Security Act to
implement Medicare payment policies designed to
improve management of chronic disease, streamline
care coordination, and improve quality outcomes
without adding to the deficit........................ 3
III.BUDGET EFFECTS OF THE BILL.......................................20
IV. VOTES OF THE COMMITTEE...........................................28
V. REGULATORY IMPACT AND OTHER MATTERS..............................28
VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED............29
I. LEGISLATIVE BACKGROUND
The Committee on Finance, having considered S. 870, as
modified, a bill that would amend title XVIII of the Social
Security Act to implement Medicare payment policies designed to
improve management of chronic disease, streamline care
coordination, and improve quality outcomes without adding to
the deficit, reports favorably thereon that the bill as
modified by the Committee and reported with an amendment do
pass.
Background and need for legislative action
Over the past two years, the Senate Finance Committee has
prioritized work on a key challenge facing the nation's health
care system: how to effectively deliver high quality,
coordinated medical care to Medicare beneficiaries living with
multiple chronic conditions. Chronically ill patients account
for a large percentage of overall Medicare spending, which is
expected to rise as an increasing number of adults with chronic
conditions age into the Medicare program. If not addressed,
this could result in worse health outcomes for those with
chronic disease as well as higher costs for both beneficiaries
and the Medicare program.
On May 22, 2015, Finance Committee Chairman Orrin Hatch (R-
UT) and Ranking Member Ron Wyden (D-OR) formed a bipartisan,
full committee chronic care working group (CCWG), co-chaired by
Senator Johnny Isakson (R-GA) and Senator Mark Warner (D-VA).
The working group was tasked with analyzing current law,
discussing alternative policy options, and developing
bipartisan legislative solutions. To meet this goal, the
working group invited all interested stakeholders to submit
their best ideas, based on real world experience and data-
driven evidence, to improve health outcomes for Medicare
beneficiaries with chronic conditions.
After reviewing a first round of 530 comments submitted by
the health care community, and subsequently meeting with 80
individual stakeholder groups, the CCWG produced a
comprehensive policy options document, which was released on
December 18, 2015. Release of the options document was intended
to generate further input from Members of Congress and
stakeholders as the CCWG refined the policies it believed had
the greatest potential to improve care coordination, increase
value, and lower costs in the Medicare program without adding
to the deficit.
After soliciting a second round of 327 stakeholder
comments, the CCWG issued a legislative discussion draft on
October 27, 2016. Soon after, the Centers for Medicare &
Medicaid Services (CMS), in its calendar year (CY) 2017
Medicare Physician Fee Schedule Rule, finalized four policies
proposed in the policy options document. Additionally, two
provisions included in the discussion draft--one to improve
risk adjustment in the Medicare Advantage (MA) program and
another to ensure access to MA plans for Medicare-eligible
individuals with end-stage renal disease (ESRD)--were adopted
as part of the 21st Century Cures Act (P.L. 114-255), which was
signed into law on December 13, 2016.
The Creating High-Quality Results and Outcomes Necessary to
Improve Chronic (CHRONIC) Care Act (S. 870), as modified,
offers additional solutions to improve health outcomes through
policies targeting traditional fee-for-service (FFS), Medicare
Advantage (MA), and Accountable Care Organizations (ACOs). The
CHRONIC Care Act includes:
Expansion and extension of the successful
Independence at Home (IAH) program, expansion of
telehealth services available to home dialysis
patients, and greater availability of telehealth
services to help ensure individuals presenting with
stroke symptoms receive the best course of treatment;
Improved flexibility and predictability for
MA plans to better serve chronically ill beneficiaries
through increased access to value-based insurance
design, permanent authorization of special needs plans
(SNPs), greater incentives to offer telehealth
services, and an expansion of supplemental benefits;
and
Greater flexibility for certain ACOs to
provide telehealth services, the option for certain
ACOs to provide incentive payments to help patients
afford primary care services, and the choice to have
beneficiaries assigned to an ACO prospectively instead
of retrospectively.
II. EXPLANATION OF THE BILL
A. Amends Title XVIII of the Social Security Act To Implement Medicare
Payment Policies Designed To Improve Management of Chronic Disease,
Streamline Care Coordination, and Improve Quality Outcomes Without
Adding to the Deficit
TITLE I--RECEIVING HIGH-QUALITY CARE IN THE HOME
Section 101. Extending the Independence at Home Demonstration Program
PRESENT LAW
The Patient Protection and Affordable Care Act (ACA, P.L.
111-148) created the Independence at Home (IAH) demonstration
under the Medicare program (Section 1866E of the Social
Security Act (SSA), 42 U.S.C. 1395cc-5) to test a payment
incentive and service delivery model that uses physician- and
nurse practitioner-directed home-based primary care teams
designed to reduce expenditures and improve health outcomes in
the provision of items and services to certain chronically ill
Medicare beneficiaries. Qualifying IAH medical practices are
physician or nurse practitioner-led legal entities that may
also include physician assistants, pharmacists, and other
health and social services staff. Such practice staff are to
have experience providing home-based primary care services to
applicable beneficiaries. Practice staff are required to make
in-home visits and to be available 24 hours per day, 7 days per
week to implement care plans tailored to the individual
beneficiary's chronic conditions. Qualifying medical practices
are eligible to receive incentive payments, subject to meeting
an expenditure target and performance standards on quality
measures. The Centers for Medicare & Medicaid Services (CMS)
Innovation Center (CMMI) initially selected a total of 15
individual practices, later supplemented by three consortia, to
participate in the IAH demonstration. The demonstration began
on June 1, 2012, and is to end on September 30, 2017.
EXPLANATION OF PROVISION
The reported bill makes modifications that would extend and
expand the IAH demonstration: (1) the maximum length of an
agreement with an IAH medical practice under the demonstration
program would increase from 5 to 7 years, effectively extending
the demonstration by 2 years; (2) the limit on the total number
of beneficiaries across all selected IAH medical practices
participating in the demonstration would be increased from
10,000 to 15,000; and (3) the mandatory termination provision
is modified so that it would apply only to practices that fail
to generate savings against their spending targets for three
consecutive years. Currently, a practice is to be terminated if
it does not receive an incentive payment for spending at least
5 percent less than its target for two consecutive years. The
reported bill also clarifies that the required independent
evaluation of the IAH demonstration would include an assessment
of IAH medical practice use of electronic health information
systems, including remote monitoring, to the extent information
is available.
Section 102. Expanding Access to Home Dialysis Therapy
PRESENT LAW
Medicare regulations require that beneficiaries with End
Stage Renal Disease (ESRD) undergoing home-based dialysis
treatment receive monthly face-to-face assessments from a
qualified physician or practitioner. ESRD beneficiaries may
receive the required monthly assessment via approved telehealth
services only if (1) the telehealth assessment occurs in a
Medicare-authorized originating site (such as a physician's
office or hospital-based dialysis facility), and (2) the site
is located in a rural Health Professional Shortage Area (HPSA)
or a county not included in a Metropolitan Statistical Area
(MSA).
Telehealth is the use of electronic information and
telecommunications technologies to support remote clinical
health care, patient and professional health-related education,
and other health care delivery functions. While Medicare
beneficiaries may receive telehealth services in a variety of
settings, under current law (SSA Section 1834(m)), the Medicare
program recognizes and pays for only certain Part B telehealth
services. The services must be either (1) remote patient and
physician or practitioner face-to-face services delivered via a
telecommunciations system, or (2) non face-to-face services
conducted through live video conferencing (or via store and
forward telecommunication services in the case of any Federal
telemedicine demonstration program in Alaska or Hawaii).
Typically, Medicare coverage for remote face-to-face services
includes payments (1) to physicians or other professionals (at
the distant site) for the telehealth consultation, and (2) to
the facility where the patient is located (the originating
site).The originating site must be in a rural HPSA, a county
not included in a MSA, or from an entity that participates in a
Federal telemedicine demonstration project. Qualifying
originating sites include an office of a physician or
practitioner, a critical access hospital (CAH), a rural health
clinic, a Federally qualified health center, a hospital, a
hospital- or CAH-based renal dialysis center, a skilled nursing
facility, or a community mental health center.
EXPLANATION OF PROVISION
The reported bill would allow Medicare ESRD beneficiaries
undergoing home dialysis to receive required monthly clinical
assessments by physicians or practitioners using telehealth
services, beginning on January 1, 2019, so long as the
individual receives a face-to-face clinical assessment, without
the use of telehealth, at least once every three consecutive
months. The section would expand the current list of allowable
originating sites for a telehealth assessment to include
freestanding renal dialysis facilities and beneficiary homes.
The provision would also eliminate geographic limits that now
require an originating site to be located in a HPSA or a county
not included in an MSA. A separate facility fee would not be
provided if the originating site is the beneficiary's home.
TITLE II--ADVANCING TEAM-BASED CARE
Section 201. Providing Continued Access to Medicare Advantage Special
Needs Plans for Vulnerable Populations
PRESENT LAW
The Medicare Prescription Drug, Improvement, and
Modernization Act of 2003 (MMA, P.L. 108-173) established a new
type of Medicare Advantage (MA) coordinated care plan to focus
on individuals with special needs. Special needs plans (SNPs)
are allowed to target enrollment to one or more types of
special needs individuals including (1) institutionalized (I-
SNPs), (2) dually eligible--low-income Medicare beneficiaries
who also are eligible for Medicaid--(D-SNPs), and/or (3)
individuals with severe or disabling chronic conditions (C-
SNPs).
In general, SNPs are required to meet all applicable
statutory and regulatory requirements that apply to MA plans,
including: state licensure as a risk-bearing entity, MA
reporting requirements that are applicable depending on plan
size, and Part D prescription drug benefit requirements. SNPs
prepare and submit bids to CMS like other MA plans and are paid
using the same methodology as for other MA plans, based on the
plan's enrollment after risk adjusting payments for beneficiary
characteristics.
Among other changes, the Medicare Improvements for Patients
and Providers Act of 2010 (MIPPA, P.L. 110-275) required that
all SNPs have evidenced-based models of care (MOC). MIPPA
required Medicare advantage organizations offering SNPs to
tailor separate MOCs to meet the special needs of SNP target
populations. MOCs must have goals and objectives for the
targeted population, a specialized provider network, use
nationally-recognized clinical practice guidelines, conduct
health risk assessments to identify the special needs of
beneficiaries, and add services for the most vulnerable
beneficiaries including those beneficiaries who are frail,
disabled, or near the end-of-life.
The ACA extended SNP authority through December 31, 2013.
Since ACA enactment, SNPs have been extended a number of times,
most recently through December 31, 2018 by the Medicare Access
and CHIP Reauthorization Act of 2015 (MACRA, P.L. 114-10). ACA
also expanded the D-SNP category by authorizing fully-
integrated dual-eligible SNPs (FIDE-SNPs). FIDE-SNPs are a
subset of D-SNPs that meet additional requirements such as
fully integrating Medicare and Medicaid benefits under a single
managed care entity; having an approved risk-based Medicaid
contract; coordinating care, including long-term care services;
using a specialty care network for high-risk beneficiaries; and
employing approved policies and procedures to coordinate or
integrate enrollment, member materials, communications,
grievances and appeals, and quality improvement activities.
Other SNP-related ACA provisions made the following changes:
Required all SNPs to comply with an approval
process based on CMS standards and executed by the National
Committee for Quality Assurance (NCQA) beginning January 1,
2012.
Authorized CMS to make a frailty adjustment
payment to FIDE-SNPs.
Required CMS to implement new quality-based
payment procedures for all MA plans by 2012.
Required the Secretary to establish the Federal
Office of (Medicare and Medicaid) Coordinated Health Care
(MMCO) within CMS to facilitate Medicare and Medicaid
coordination, dual eligible beneficiary care, and other
activities.
CMS's monthly enrollment data shows that SNP enrollment has
increased from 670,500, in May 2007 to approximately 2.36
million in April 2017. SNP enrollment is concentrated in D-
SNPs, which account for approximately 83% of the total 2.36
million April 2017 enrollment (D-SNPs, 1.96 million, C-SNPs,
335,000, and I-SNPs, 63,500). Moreover, SNP enrollment also is
concentrated geographically, with 9 states and Puerto Rico
accounting for approximately 79% of January 2015 enrollment. In
April 2015, there were 37 FIDE-SNPs operating in 9 states with
total enrollment of approximately 107,800. Approximately 65% of
that January 2015 FIDE-SNP enrollment (about 70,000) was in
Massachusetts and Minnesota.
EXPLANATION OF PROVISION
The reported bill would permanently authorize SNPs if
certain additional policy requirements are met. Rather than
expiring under current law on December 31, 2018, SNPs could
continue to enroll qualifying Medicare beneficiaries so long as
they adopt the requirements outlined in the bill into D-SNPs,
C-SNPs, and I-SNPs, and new SNPs could be established.
The Secretary of HHS (``the Secretary'') would be required
to increase D-SNP integration of Medicare and Medicaid by
designating MMCO as the dedicated CMS contact point to assist
states in addressing D-SNP Medicare-Medicaid misalignments. In
this role, MMCO would be required to establish a uniform
process for disseminating Medicare contract information to
state Medicaid agencies as well as to D-SNPs and to establish
basic resources for states interested in exploring D-SNPs as a
platform for integrating Medicare-Medicaid services for dual
eligible beneficiaries.
The Secretary, to the extent feasible, would be required to
establish procedures by April 1, 2020 that would unify the
Medicare and Medicaid fee-for-service (FFS) and managed care
grievance and appeals procedures applicable to D-SNPs. In
establishing unified Medicare-Medicaid grievance and appeals
procedures, the Secretary would be required to solicit comments
from states, plans, beneficiary representatives, and other
relevant stakeholders. In addition, the Secretary would be
required to ensure that unified grievance and appeals
procedures would be included in D-SNP contracts and would:
adopt current law provisions that would be
most protective of D-SNP enrollees and also would be
most compatible with Medicare and Medicaid unified
timeframes and consolidated access to external review
under an integrated process, as determined by the
Secretary;
take into account Medicaid state plan
differences;
be easily navigable by D-SNP enrollees; and
include, if applicable, the following
elements:
a single written notification of all applicable
Medicare and Medicaid grievance and appeal rights (the
Secretary would be authorized to waive certain
notification requirements when an item or service was
covered by Medicare or Medicaid);
single pathway for resolution or appeal related to
a particular item or service covered by a D-SNP or
Medicaid;
procedures written in plain language and available
in a language and format that is accessible to
enrollees, including non-English languages prevalent in
the D-SNP service area;
unified Medicare and Medicaid timeframes for
grievance and appeal processes such as the enrollee's
filing of appeals or grievances, plan acknowledgement,
resolution of a grievance or appeal, and notification
of appeal or grievance decisions; and
requirements for how D-SNP plans process, track,
and resolve appeals and grievances to ensure timely
beneficiary notification of decisions made throughout
the appeal and grievance process and for which the
appeal and grievance status would be easy to determine.
The reported bill also would require that the unified
grievance and appeals procedures for Medicare and Medicaid
services established by the Secretary incorporate provisions
under current law and further require the implementation of
regulations that would continue enrollee benefits pending a
grievance or appeal process. Beginning January 1, 2021 and for
subsequent years, D-SNP plan contracts with state Medicaid
agencies would be required to use the new unified Medicare-
Medicaid grievance and appeals procedures.
D-SNP contracts with state Medicaid agencies in effect on
or after January 1, 2021, would be required to meet one or more
of the following requirements for integration of Medicare and
Medicaid benefits, to the extent permitted under state law:
Enter into a contract with a state Medicaid
agency and coordinate long-term services and supports
(LTSS), behavioral health services, or both by meeting
an additional minimum set of requirements determined by
the Secretary through the MMCO and based on input from
stakeholders. These requirements could include the
following and would have to be included in the D-SNP
contract with the state Medicaid agency:
D-SNP notification for the state in a timely manner
of hospitalizations, emergency room visits, and
hospital or nursing home discharges of enrollees;
assigning one primary care provider for each
enrollee; or
sharing data that would benefit the coordination of
Medicare and Medicaid items and services.
Satisfy the requirements of a FIDE-SNP,
except the requirement that the D-SNP have similar
average levels of frailty as the Program for All-
inclusive Care for the Elderly (PACE) or enter into a
capitated contract with the state Medicaid agency to
provide LTSS, behavioral health, or both LTSS and
behavioral health.
The parent organization must assume clinical
and financial responsibility for the Medicare and
Medicaid benefits provided to individuals who are
enrolled in a D-SNP and a Medicaid managed care
organization that provides LTSS or behavioral health
services, with the same parent organization.
MMCO would be responsible for the following:
the designated contact for state Medicaid
agencies in the integration of D-SNPs; and
the development of regulations and guidance
to implement a unified grievance and appeals process.
Effective for SNP contracts beginning January 1, 2020 and
in subsequent years, the Secretary would add the following C-
SNP care management plan requirements:
C-SNP interdisciplinary provider teams would
include providers with demonstrated expertise,
including training in an applicable specialty, in
treating individuals similar to the C-SNP targeted
population;
enrolled individuals would receive face-to-
face encounters with the C-SNP at least annually;
the MOC would include the results of the
initial assessment as well as each annual reassessment,
and the results of those assessments would be addressed
in the enrollee's individualized care plan;
the annual MOC evaluation and approval would
take into account whether or not the plan fulfilled the
goals identified in the previous year's MOC goals; and
a C-SNPs MOC would only be approved if the
C-SNP achieved established minimum benchmarks for each
MOC element.
Effective for C-SNP contracts beginning on or after January
1, 2022, Section 201 would revise the definition of individuals
eligible for C-SNPs to include Medicare beneficiaries who (i)
have one or more comorbid and medically complex chronic
conditions that is life threatening or that significantly
limits overall health or function, (ii) have a high-risk of
hospitalization or other adverse health outcome, (iii) require
intensive care coordination, and (iv) is identified on the list
of conditions approved by the panel of clinical advisors
described below. The Secretary would be required to convene a
clinical advisor panel to identify C-SNP conditions by December
31, 2020, and every five years thereafter. The C-SNP condition
clinical advisory panel would establish and update the list of
severe or disabling chronic conditions that met the following
criteria:
Conditions that require prescription drugs,
providers, and models of care that are unique to the
specific population of enrollees of a C-SNP on or after
December 1, 2020 and:
as a result of access to, and enrollment in, such a
specialized MA plan for special needs individuals,
individuals with such condition would have a reasonable
expectation of slowing or halting the progression of
the disease, improving health outcomes and decreasing
overall costs for individuals diagnosed with such
condition compared to available options of care other
than through such a specialized MA plan for special
needs individuals; or
Conditions that have a low prevalence in the
general population of Medicare beneficiaries or a
disproportionally high per-beneficiary cost.
In establishing and updating the C-SNP condition list, the
clinical advisory panel would be required to take into account
the availability of varied benefits, cost-sharing, and
supplemental benefits described in Section 301 of the reported
bill.
The Secretary could require quality data reporting and
apply those ratings to SNPs at the plan level instead of the
contract level. Prior to applying quality measurement at the
plan level, the Secretary would be required to:
consider the minimum number of SNP enrollees
to determine if a statistically significant or valid
measurement of quality at the plan level would be
possible;
consider the impact of such a change on MA
plans that serve a disproportionate number of dually-
eligible beneficiaries;
ensure that if plan level quality measures
are reported, that MA plans would not be required to
report duplicative information; and
ensure that plan level quality reporting
would not interfere with the collection of encounter
data submitted by MA organizations or the
administration of any changes to the program as a
result of the plan level data collection.
If the Secretary applies quality measurement at the plan
level, the specific quality measurement could include measures
from the Medicare Health Outcomes Survey (HOS), the Healthcare
Effectiveness Data Information Set (HEDIS), and the Consumer
Assessment of Healthcare Providers and Systems (CAHPS) as well
as quality measures under Medicare Part D. The Secretary would
determine the feasibility of requiring all MA plans to report
quality measures at the plan level and would consider applying
this requirement following this assessment.
The Comptroller General would conduct a study on state-
level integration between SNPs and Medicaid that would include
analyses of the following:
the characteristics of states where the
state Medicaid agency has a contract with D-SNPs that
delivers LTSS through a managed care program, including
state plan LTSS requirements;
the various types of SNPs, which may include
the following: (1) a FIDE-SNP; (2) a D-SNP that has a
contract with a state Medicaid agency, which may
include LTSS; and (3) a D-SNP that has a contract with
a state Medicaid agency that meets additional
requirements established by the state;
the characteristics of individuals enrolled
in D-SNPs;
as practicable, the following with respect
to state programs for the delivery of LTSS through
Medicaid managed care plans:
the populations eligible to receive LTSS, and
the SNPs where LTSS are provided on a capitated
basis or, where LTSS are carved out and provided
through FFS Medicaid, if any; and
the integration arrangements of D-SNPs
offered across states and how their availability and
variation affect expenditures, service delivery
options, access to community care, and the utilization
of care; and
the efforts of state Medicaid programs to
transition dually-eligible beneficiaries receiving LTSS
from institutional settings to home and community based
settings and related financial impacts of these
transitions.
The Comptroller General would submit the report to Congress
within two years of the date of enactment, including
recommendations for legislation and administrative action as
determined appropriate.
TITLE III--EXPANDING INNOVATION AND TECHNOLOGY
Section 301. Adapting Benefits to Meet the Needs of Chronically Ill
Medicare Advantage Enrollees
PRESENT LAW
Under Medicare Advantage, private health plans are paid a
per person monthly amount to provide all Medicare-covered
benefits (except hospice) to beneficiareis who enroll,
regardless of how many or how few services a beneficiary
actually uses. The plan is at-risk if aggregate costs for its
enrollees exceed program payments and beneficiary cost sharing.
Conversely, in general, the plan can retain savings if
aggregate enrollee costs are less than program payments and
cost sharing. Currently, an MA plan must offer the same benefit
package to all of its enrollees. CMMI is currently testing a
model to allow greater flexibility for an MA plan to meet the
needs of chronically ill enrollees. Under the model, plans are
allowed to propose and design offerings that vary the benefits,
cost-sharing, and supplemental benefits offered to enrollees
with specific conditions. The first year of the model, which
began January 1, 2017, is being conducted in seven states. The
second year of the model, beginning January 1, 2018, will add
three additional states.
EXPLANATION OF PROVISION
The reported bill would expand the testing of the CMMI
Value-Based Insurance Design (VBID) Model to allow an MA plan
in any state to participate in the model by 2020. The section
would delay until January 1, 2022 the authority for the
Secretary to terminate or modify the model. The model would be
permitted to continue after January 1, 2022 if it can be shown
that the model is expected to (a) improve quality of care
without increasing spending, (b) reduce spending without
reducing quality of care, or (c) improve the quality of care
and reduce spendig. Funding for the desgn, implementation, and
evaluation of the expanded model is to be allocated by the
Secretary from appropriations applied to CMMI.
Section 302. Expanding Supplemental Benefits to Meet the Needs of
Chronically Ill Medicare Advantage Enrollees
PRESENT LAW
All MA plans must offer required Medicare benefits (except
hospice) and may offer additional or supplemental benefits.
Mandatory supplemental benefits are covered by the MA plan for
every person enrolled in the plan and are paid for either
through plan rebates, a beneficiary premium, or beneficiary
cost sharing. Optional supplemental benefits must be offered to
all plan enrollees, but the enrollees may choose whether to pay
an additional amount to receive coverage of the optional
benefit. Optional benefits cannot be financed through plan
rebates.
An MA plan must adhere to specific rules regarding the
supplemntal benefits that it can offer. First, the MA plan
cannot design a benefit plan that is likely to substantially
discourage enrollment by certain MA-eligible individuals.
Further, supplemental benefits (a) may not be Part A or Part B
required services, (b) must be primarily health related with
the primary purpose to prevent, cure, or diminish an illness or
injury, and (c) the plan must incur a cost when providing the
benefit. Items that are primarily for comfort or are considered
social services would not qualify as supplemental benefits.
Examples of supplemental benefits include the following:
1. Additional inpatient hospital days in an acute
care or psychiatric facility,
2. Acupuncture or alternative therapies,
3. Counseling services,
4. Fitness benefit,
5. Enhanced disease management, and
6. Remote Access Technologies (including Web/Phone
based technologies).
EXPLANATION OF PROVISION
The reported bill would allow an MA plan to offer a wider
array of supplemental benefits to chronically ill enrollees
beginning in 2020. These supplemental benefits would be defined
as those that have a reasonable expectation of improving or
maintaining the health or overall function of the chronically
ill enrollee and would not be limited to primarily health-
related services. For purposes of this section, a chroniclly
ill enrollee would be defined as those who have one or more
comorbid and medically complex chronic conditions that are life
threatening or significantly limit the overall health or
functioning of the enrollee, have a high risk of
hospitalization or other adverse health outcomes, and require
intensive care coordination. The section would allow an MA plan
the flexibility to provide targeted supplemental benefits to
specific chronically ill enrollees.
The reported bill would require the Comptroller General to
conduct a study on the supplemental benefits provided by MA
plans. The study, to the extent data are available, would be
required to include specified analyses on topics including the
availability, utilization, and cost of the supplemental
benefits, the impact on quality, health, utilization of other
services, and the savings resulting from the supplemental
benefits. The study would include recommendations for
legislative and administrative actions as the Comptroller sees
fit. The Comptroller General would submit the report to
Congress not later than five years after the date of enactment.
Section 303. Increasing Convenience for Medicare Advantage Enrollees
Through Telehealth
PRESENT LAW
MA plans are paid a per person monthly amount. The
Secretary determines a plan's payment by comparing its bid to a
benchmark. A bid is the plan's estimated cost of providing
Medicare-covered services (excluding hospice but including the
cost of medical services, administration, and profit). In
general, the Secretary has the authority to review and
negotiate plan bids to ensure that they reflect revenue
requirements. A benchmark is the maximum amount the federal
government will pay for providing those services in the plan's
service area. If a plan's bid is less than the benchmark, the
plan's payment equals its bid plus a rebate. The rebate must be
returned to enrollees in the form of additional benefits,
reduced cost sharing, reduced Medicare Part B or Part D
premiums, or some combination of these options.
An MA plan may provide basic telehealth benefits as part of
the standard benefit. For example, telemonitoring and web-based
and phone technologies can be used to provide telehealth
services. Medicare Advantage Prescription Drug (MAPD) plans may
choose to include telehealth services as part of their plan
benefits, for instance, in providing medication therapy
management (MTM). However, MA plans that want to provide
telemedicine or other technologies that they believe promote
efficiences beyond what is covered in the traditional Medicare
program must receive approval to provide them as a supplemental
benefit, and must use their rebate dollars to pay for those
services.
EXPLANATION OF PROVISION
The reported bill would allow an MA plan to offer
additional, clinically appropriate, telehealth benefits in its
annual bid amount beyond the services that currently receive
payment under Part B beginning in 2020. The Secretary would be
required, no later than November 30, 2018, to solicit comments
on what types of items and services (including those provided
through supplemental health care benefits) should be considered
to be additional telehealth benefits and the requirements for
the provision or furnishing of such benefits (such as
licensure, training, and coordination requirements). The costs
of telehealth benefits included in the bid would not include
capital and infrastructure related costs or investments. If an
MA plan provides a service as an additiontal telehealth
service, the MA plan must also provide access to the service
through an in-person visit (and not only as an additional
telehealth visit), and the beneficiary would have the ability
to decide whether or not to receive the services via
telehealth. This section would not affect the requirement that
MA plans must provide enrollees with all benefits under Parts A
and B of Medicare (except hospice).
Section 304. Providing Accountable Care Organizations the Ability to
Expand the Use of Telehealth
PRESENT LAW
While Medicare beneficiaries may receive telehealth
services in a variety of settings, under current law (SSA
Section 1834(m)), the Medicare program restricts telehealth
payments by the type of services provided, the geographic
location where the services are delivered, the type of
institution delivering the services, and the type of health
provider. In order to be eligible for Medicare payment,
telehealth services must be provided at a qualifying site in a
rural health professional shortage area (HPSA), a county not
included in a Metropolitan Statistical Area (MSA), or from an
entity that participates in a Federal telemedicine
demonstration project. Qualifying ``originating sites'' include
an office of a physician or practitioner, a critical access
hospital (CAH), a rural health clinic, a Federally qualified
health center, a hospital, a hospital- or CAH-based renal
dialysis center, a skilled nursing facility, or a community
mental health center.
Medicare accountable care organizations (ACOs) were
authorized in the Affordable Care Act, and initial models
included the fee-for-service based Medicare Shared Savings
Program (MSSP) and the Pioneer ACOs, which received population-
based payments or capitation. While current laws and rules do
not preclude ACOs from providing telemedicine or other
technologies that they believe promote efficiencies to their
patients, ACOs do not receive additional Medicare payment for
furnishing those services and technologies. In December 2016,
CMS announced the Next Generation ACO Model, with modified
benchmarking methods, additional payment mechanisms (including
capitation), and various ``benefit enhancements,'' including
better access to (and payment consideration for) telehealth
services.
EXPLANATION OF PROVISION
The reported bill would expand the ability of certain MSSP
ACOs and ACOs tested or expanded through the CMS Center for
Medicare and Medicaid Innovation (CMMI) to furnish and receive
payments for telehealth services by applying the Next
Generation ACO telehealth waiver, beginning January 1, 2020. As
a result, the reported bill would (1) eliminate the geographic
component of the originating site requirement, (2) allow
beneficiaries assigned to the approved MSSP and ACO programs to
receive currently allowable telehealth services in the home,
and (3) ensure that MSSP and ACO providers are only allowed to
furnish telehealth services as currently specified under
Medicare's physician fee schedule, with limited exceptions.
In order for an ACO to be eligible to receive these
telehealth payments, it must also be an ACO to which
beneficiaries are prospectively assigned and it must accept
two-sided risk for both bonuses rewarded for realized savings
as well as penalties associated with some cost overages. When
the home of a beneficiary receiving the services is the
originating site, then no facility fee would be paid. There
would also be no payment for services that are inappropriate
for the home setting, such as those typically furnished to
hospital inpatients.
No later than January 1, 2026, the Secretary would submit a
report to Congress on the implementation of this section that
would include an analysis of the utilization of, and
expenditures for, telehealth services provided by ACOs,
together with recommendations for legislation and
administration action as the Secretary determines appropriate.
Section 305. Expanding the Use of Telehealth for Individuals with
Stroke
PRESENT LAW
Patients who have stroke symptoms or have had a stroke may
receive care in a number of sites and across different
providers. In addition to physician services, stroke patients
may require care at an acute care hospital (inpatient and/or
outpatient), inpatient rehabilitation facility (IRF), or
skilled nursing facility (SNF). For covered Medicare services
provided to stroke patients, physicians are paid according to
the Medicare Physician Fee Schedule (MPFS), hospitals according
to the inpatient prospective payment system (IPPS) or
outpatient prospective payment system (OPPS), IRFs under the
IRF PPS, and SNFs under the SNF PPS. Under current law,
telehealth restrictions (due to SSA Section 1834(m)) apply to
all such services. In the case of telehealth services for the
evaluation of acute stroke, the originating site hospital must
be in a rural health professional shortage area (HPSA), a
county not included in a Metropolitan Statistical Area (MSA),
or an entity that participates in a Federal telemedicine
demonstration project.
EXPLANATION OF PROVISION
The reported bill would eliminate the originating site
geographic restrictions for telehealth services furnished for
the purpose of evaluating an acute stroke (as determined by the
Secretary), beginning January 1, 2021. Removing this
restriction would provide payment to the distant consulting
physician regardless of the originating site hospital's
location. In the case where a hospital is newly eligible to
serve as an originating site, that hospital would not receive
an originating site telehealth facility fee.
TITLE IV--IDENTIFYING THE CHRONICALLY ILL POPULATION
Section 401. Providing Flexibility for Beneficiaries to Be Part of an
Accountable Care Organization
PRESENT LAW
Initially, Medicare fee-for-service beneficiaries were
assigned to an ACO based on their utilization of primary care
services provided by a physician who participated in an ACO.
Under these original models, beneficiaries do not have the
option of choosing to participate directly in an ACO (aside
from seeking care from a particular provider) but are notified
if their primary care provider is an ACO participant.
Beneficiaries who receive at least one primary care service
from a primary care physician within the ACO are assigned to
that ACO if the beneficiary receives the plurality of his or
her primary care services from primary care physicians within
the ACO. Primary care physicians are defined as those with one
of four specialty designations: internal medicine, general
practice, family practice, and geriatric medicine or for
services furnished in a federally qualified health center
(FQHC) or rural health clinic (RHC), a physician included in
the attestation provided by the ACO as part of its application.
Beneficiaries who have not had a primary care service furnished
by any primary care physician either inside or outside the ACO
but who receive at least one primary care service from any
physician within the ACO are assigned to that ACO if the
beneficiary receives a plurality of his or her primary care
services from specialist physicians and certain non-physician
practitioners (nurse practitioners, clinical nurse specialists,
and physician assistants) within the ACO. Medicare
beneficiaries enrolled in a Medicare Advantage plan cannot be
enrolled in an ACO.
The manner in which Medicare fee-for-service beneficiaries
are assigned to an ACO affects how the ACO can tailor care for
its beneficiaries and how the ACO is evaluated. Under current
CMS rules, Medicare determines the method of beneficiary
attribution, rather than giving ACOs the option to choose the
assignment methodology that best fits their model of care.
Medicare fee-for-service beneficiaries can be assigned to an
ACO either retrospectively or prospectively depending on the
ACO's track. The initial implementation of MSSP ACOs (Tracks 1
and 2) retrospectively assigned beneficiaries to ACOs.
Retrospective assignment ensures that ACOs are held accountable
for the spending only of those beneficiaries who receive most
of their primary care services from ACO providers, but they may
not know who those beneficiaries are until the end of the year.
The introduction of Track 3 MSSP ACOs allows prospective
beneficiary assignment (along with other changes in the
assumption of risk and rewards). Prospective assignment allows
ACOs to identify beneficiaries for whom they will be held
accountable and proactively take steps to connect these
beneficiaries to appropriate care, but also holds ACOs
accountable for the spending for these beneficiaries even if
the ACO providers do not provide the care.
EXPLANATION OF PROVISION
The reported bill would allow MSSP ACOs the choice of
prospective assignment, beginning with agreements entered into
or renewed on or after January 1, 2020. In addition,
beneficiaries would be able to voluntarily identify an ACO
professional as their primary care provider and be assigned to
that ACO beginning with the 2018 performance year. The
Secretary would establish a process to notify Medicare
beneficiaries of their ability to make such a voluntary
identification, and how to make or change this designation. The
beneficiary's voluntary identification would supersede any
other claims-based assignment to an ACO.
TITLE V--EMPOWERING INDIVIDUALS AND CAREGIVERS IN CARE DELIVERY
Section 501. Eliminating Barriers to Care Coordination under
Accountable Care Organizations
PRESENT LAW
ACOs were conceived as collaborations that integrate groups
of providers, such as physicians (particularly primary care
physicians), hospitals, and others around the ability to
receive shared-saving bonuses or losses from a payer by
achieving measured quality targets and demonstrating real
reductions in overall spending growth for a defined population
of patients. Beneficiaries who are assigned to or voluntarily
elect to be identified with an ACO continue to have standard
Medicare Part A and B cost-sharing responsibilities, including
deductibles and coinsurance payments.
EXPLANATION OF PROVISION
The reported bill would authorize the Secretary to create
an ACO Beneficiary Incentive Program, intended to encourage
beneficiaries to obtain medically necessary primary care
services by permitting incentive payments to beneficiaries. The
program would be established no earlier than January 1, 2019
and no later than January 1, 2020. The Secretary could
terminate the program at any time.
Current and future ACOs that have agreed to two-sided risk/
reward models could apply to establish a program that would
provide incentive payments to beneficiaries assigned to the ACO
who receive primary care services from (i) a physician who has
a primary care specialty designation, or (ii) a physician
assistant, nurse practitioner, or clinical nurse specialist
participating in the ACO, or (iii) a Federally qualified health
center or rural health clinic. The program would continue for
at least one year. The incentive payment could be up to $20,
with the maximum amount to be updated annually by the
percentage increase in the consumer price index. The incentive
payment would be made regardless of whether or not the
beneficiary is enrolled in a Medicare supplemental policy
(Medigap), a Medicaid plan or waiver, or any other health
insurance policy or health benefit plan, and would be made for
each qualifying (primary care) service. The payment would be
made no later than 30 days after the service is furnished. The
Secretary would not make any payments to the ACOs for the costs
associated with the implementation of the ACO Beneficiary
Incentive Program. The incentive payments would be disregarded
for purposes of calculating ACO benchmarks, estimated average
per capita Medicare expenditures, and shared savings. ACOs
would be required to report to CMS the amount and frequency of
the incentive payments made and the number of beneficiaries
receiving the payments.
Incentive payments made under an ACO Beneficiary Incentive
Program would not be considered income or resources or
otherwise be taken into account for purposes of determining
eligibility for benefits or assistance under any Federal
program or under any State or local program financed in whole
or in part with Federal funds, or for any Federal or State tax
laws.
The Secretary would conduct an evaluation of the ACO
Beneficiary Incentive Program that would include an analysis of
the impact of the implementation of the program on Medicare
expenditures and beneficiary health outcomes. A report would be
due to Congress no later than October 1, 2023, containing the
results of the evaluation together with recommendations for
such legislation and administrative action as the Secretary
were to determine appropriate.
Section 502. GAO Study and Report on Longitudinal Comprehensive Care
Planning Services under Medicare Part B
PRESENT LAW
No present law.
EXPLANATION OF PROVISION
The reported bill would require the Comptroller General to
conduct a study on the establishment of a payment code, under
Medicare Part B, for a beneficiary visit with an applicable
provider for longitudinal comprehensive care planning services.
In this section the term, ``longitudinal comprehensive care
planning services'' would mean ``a voluntary shared decision-
making process that is furnished by an applicable provider
through an interdisciplinary team and includes a conversation
with Medicare beneficiaries who have received a diagnosis of a
serious or life-threatening illness.'' The term ``applicable
provider'' would mean a hospice program or other provider of
services (e.g., hospital, skilled nursing facility, home health
agency), that furnishes longitudinal comprehensive care
planning services through an interdisciplinary team, and meets
such other requirements as the Secretary might determine to be
appropriate. The term ``interdisciplinary team'' would mean a
group that includes at least one physician, one registered
professional nurse, and one social worker, and could include a
chaplain, minister, or other clergy, and other direct care
personnel. The purpose of such services would be ``to discuss a
longitudinal care plan that addresses the progression of the
disease, treatment options, the goals, values, and preferences
of the beneficiary, and the availability of other resources and
social supports that may reduce the beneficiary's health risks
and promote self-management and shared decision making.''
The study would include analyses of a number of issues
related to long-term comprehensive care planning, including the
availability, use, and efficiency of existing services, and an
examination of the barriers to and quality metrics for such
care. The report would include many stakeholder views and
concerns. The Comptroller General would submit the report to
Congress no later than 18 months after the date of the
enactment, together with recommendations for such legislation
and administrative action as the Comptroller General sees fit.
TITLE VI--OTHER POLICIES TO IMPROVE CARE FOR THE CHRONICALLY ILL
Section 601. Providing Prescription Drug Plans with Parts A and B
Claims Data to Promote the Appropriate Use of Medications and Improve
Health Outcomes
PRESENT LAW
Under current law, standalone prescription drug plans
(PDPs) provide Medicare's prescription drug benefit to fee-for-
service (FFS) beneficiaries. Certain Medicare beneficiaries who
meet criteria described in section 1860D-4(c)(2)(a)(ii) of the
Social Security Act are eligible to enroll in medication
therapy management (MTM) programs offered by PDPs. MTM's
purpose is to coordinate prescription drugs for high-cost
beneficiaries. However, PDPs do not have access FFS utilization
data that may aid the PDP in coordination efforts. This differs
from MA-PDs which are responsible for providing both Medicare's
prescription drug benefit but also Medicare Part A and Part B's
medical benefits and has access to all relevant data.
EXPLANATION OF PROVISION
The reported bill would require the Secretary of HHS to
establish a process, beginning in plan year 2020, by which a
Part D plan sponsor may submit a request to HHS to receive
claims data under Parts A and B. These data, which would
include the most recent possible claims, would be for the
purposes of: optimizing therapeutic outcomes through improved
medication use; improving care coordination as to prevent
adverse health outcomes; and other purposes determined by the
Secretary. Plan sponsors would be prohibited from using these
data to: inform Part D coverage determinations, conduct
retroactive review of coverage indications, facilitate
enrollment changes to a different PDP or an MA-PD offered by
the same parent organization, market benefits, and for other
purposes determined by the Secretary to protect the identity of
Medicare beneficiaries and to protect the security of personal
health information.
Section 602. Government Accountability Office (GAO) Study and Report on
Improving Medication Synchronization
PRESENT LAW
Individuals with chronic conditions are often prescribed
multiple prescriptions by different clinicians. Because many
prescriptions are for a standard period of time (i.e., 30 days)
but may be prescribed at separate points during a course of
treatment, a patient might have to fill a number of
prescriptions at different times each month. There is a move
toward prescription synchronization to enable patients to fill
multiple prescriptions from various providers at the same time
each month in an effort to improve prescription adherence. In
2012, CMS announced a regulatory change making it easier for
Medicare Part D enrollees and their prescribers to synchronize
prescriptions (42 CFR Sec. 423.153(b)(4)). Under the rule,
which took effect at the beginning of 2014, Part D plans must
apply a pro-rated daily cost-sharing rate to prescriptions for
less than a 30-days' supply of a drug dispensed in an oral
form, with some exceptions. The change means that a Part D
enrollee must no longer pay a full month's co-payment or
coinsurance for drugs dispensed for less than a 30-day period.
The pro-rating applies regardless of the setting where a drug
is dispensed.
EXPLANATION OF PROVISION
The reported bill would require the Comptroller General to
submit a report to Congress, within 18 months of enactment,
examining the extent to which Medicare Part D and private
payers use programs that synchronize pharmacy dispensing
schedules so that individuals who are prescribed multiple drugs
may receive their medications on the same day to facilitate
counseling services and promote medication adherence. The
Comptroller would be required to recommend legislative and
administrative actions as the Comptroller sees fit.
The report would evaluate the extent to which pharmacies
have adopted synchronization programs; look at the common
characteristics of the programs, including how pharmacies
structure counseling sessions under such programs as well as
payment and other arrangements to support pharmacy
synchronization efforts; and compare the Medicare programs to
private programs. The report would also assess the programs'
impact on medication adherence, health outcomes, and patient
satisfaction; assess the extent to which Medicare rules support
medication synchronization; and examine whether there are
barriers to such programs in Medicare.
Section 603. GAO Study and Report on the Impact of Obesity Drugs on
Patient Health and Spending
PRESENT LAW
Under existing law (Section 1860D-(e)(2)(A) of the Social
Security Act) Medicare Part D excludes coverage of certain
drugs or classes of drugs, or their medical uses. Among the
excluded drugs are agents used to treat anorexia, weight loss,
or weight gain (even if used for a non-cosmetic purpose such as
a treatment for morbid obesity).
EXPLANATION OF PROVISION
The reported bill would direct the Comptroller General to
submit a report to Congress within 18 months of enactment
providing information, to the extent data are available, on the
use of prescription drugs to control the weight of obese
patients and the impact of coverage on health and spending and
to recommend legislative and administrative actions as the
Comptroller sees fit. The report would examine use of the drugs
in the non-Medicare population and for Medicare beneficiaries
who have coverage for weight-loss drugs as a Medicare Advantage
supplemental benefit.
The Comptroller General would analyze the prevalence of
obesity in the population; the utilization of weight-loss
drugs; the distribution of body mass index by those taking
weight-loss drugs; and the available information on the use of
obesity drugs in conjunction with other health care items or
services, such as counseling, and how that compares with the
use of other items and services by obese individuals who do not
use weight loss drugs.
The Comptroller General also would examine physician
considerations in prescribing weight-loss drugs; the prevalence
of processes to discontinue use of the drugs for patients who
do not benefit; the available information on patient adherence
and maintenance of weight loss, and the subsequent impact of
obesity drugs on other medical services directly related to
obesity; and what is known about the spending associated with
the care of individuals who use weight loss drugs compared to
those who do not.
Section 604. HHS Study and Report on Long-Term Risk Factors for Chronic
Conditions Among Medicare Beneficiaries
PRESENT LAW
No present law.
EXPLANATION OF PROVISION
The reported bill would require the Secretary of Health and
Human Services (HHS) to conduct a study to evaluate long-term
cost drivers to the Medicare program, including obesity,
tobacco use, mental health conditions, and other factors that
may contribute to the deterioration of health conditions among
individuals with chronic conditions. The study would identify
any barriers to collecting and analyzing the information needed
to conduct this evaluation and make legislative and regulatory
recommendations for removing such barriers. The Secretary would
be required to post the resulting report on the HHS public
website no later than 18 months after the enactment.
TITLE VII--OFFSETS
Section 701. Rescission of Funding in the Medicare Improvement Fund
PRESENT LAW
Section 188 of the Medicare Improvements for Patient and
Providers Act (MIPPA) established the Medicare Improvement Fund
(MIF), available to the Secretary to make improvements under
the original fee-for-service program under Parts A and B for
Medicare beneficiaries. Under current law, $270 million is
available for services furnished during and after FY2021.
EXPLANATION OF PROVISION
The reported bill would eliminate the funding in the
Medicare Improvement Fund.
Section 702. Rescission of Funding in the Medicaid Improvement Fund
PRESENT LAW
The Supplemental Appropriations Act, 2008 (P.L. 110-252)
amended the Social Security Act established, the Medicaid
Improvement Fund, available to the Secretary to improve the
management of the Medicaid program. Under current law, $5
million is available for FY2021 and after.
EXPLANATION OF PROVISION
The reported bill would eliminate the funding in the
Medicaid Improvement Fund.
III. BUDGET EFFECTS OF THE BILL
A. Committee Estimates
The Committee adopts as its own the preliminary cost
estimate prepared by the Director of the Congressional Budget
Office pursuant to section 402 of the Congressional Budget Act
of 1974.
B. Budget Authority
In compliance with section 308(a)(1) of the Budget Act, the
Committee states that the extent to which the provisions of the
bill as reported involve new or increased budget authority or
affect levels of tax expenditures will be included in the
statement from the Congressional Budget Office that will be
provided separately, as described in Part C below.
C. Consultation with Congressional Budget Office
In accordance with section 403 of the Congressional Budget
and Impoundment Control Act of 1974 (P.L. 93-344), the
Committee advises that the Congressional Budget Office has
submitted a cost estimate on the bill. The following is the
cost estimate provided by the Congressional Budget Office
pursuant to section 402 of the Congressional Budget Act of
1974.
U.S. Congress,
Congressional Budget Office,
Washington, DC, August 1, 2017.
Hon. Orrin G. Hatch,
Chairman, Committee on Finance,
U.S. Senate, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for S. 870, the Creating
High-Quality Results and Outcomes Necessary to Improve Chronic
(CHRONIC) Care Act of 2017.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Lori Housman.
Sincerely,
Mark P. Hadley
(For Keith Hall, Director).
Enclosure.
S. 870--Creating High-Quality Results and Outcomes Necessary to Improve
Chronic Care Act
Summary: S. 870 would affect the Medicare and Medicaid
programs in several ways. Specifically, the bill would:
Modify and extend programs that provide
services to beneficiaries with chronic conditions or
other special needs,
Expand use of remote (telehealth) services,
and
Rescind funding dedicated to improving the
Medicare fee-for-service program and the management of
the Medicaid program.
CBO estimates that enacting S. 870 would not affect direct
spending in fiscal year 2018; would reduce direct spending for
the Medicare and Medicaid programs by $217 million over the
2018-2022 period; and would have no significant effect on total
direct spending over the 2018-2027 period. Pay-as-you-go
procedures apply because enacting S. 870 would affect direct
spending. Enacting the bill would not affect revenues.
CBO estimates that enacting the legislation would not
increase net direct spending or on-budget deficits by more than
$5 billion in any of the four consecutive 10-year periods
beginning in 2028.
The bill contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA).
Estimated cost to the Federal Government: The estimated
budgetary effect of S. 870 is shown in the following table. The
effects of this legislation fall within budget functions 550
(health) and 570 (Medicare).
--------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
------------------------------------------------------------------------------------------------------------
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2017-2022 2017-2027
--------------------------------------------------------------------------------------------------------------------------------------------------------
INCREASES OR DECREASES (-) IN DIRECT SPENDING OUTLAYS
Independence at Home Demonstration......... 0 0 2 7 7 0 0 0 0 0 0 16 16
Special Needs Plans........................ 0 0 6 13 13 14 14 15 15 16 17 46 123
Value-based Insurance Design Demonstration. 0 0 0 40 50 0 0 0 0 0 0 90 90
Telehealth Costs in Medicare Advantage Bids 0 0 0 -10 -10 -10 -10 -10 -10 -10 -10 -30 -80
Telehealth in ACOs......................... 0 0 0 5 5 5 5 5 5 10 10 15 50
Telehealth Services for Stroke Patients.... 0 0 0 0 10 15 20 25 30 35 45 25 180
Assignment of Beneficiaries to ACOs........ 0 0 0 5 5 5 5 5 5 10 10 15 50
Use of In-network Providers by ACO 0 0 0 -5 -7 -7 -7 -7 -7 -7 -7 -19 -54
Beneficiaries.............................
Rescissions:
Medicare Program....................... 0 0 0 0 -235 -135 0 0 0 0 0 -370 -370
Medicaid Program....................... 0 0 0 0 -5 0 0 0 0 0 0 -5 -5
------------------------------------------------------------------------------------------------------------
Total Changes.............................. 0 0 8 55 -167 -113 27 33 38 54 65 -217 0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes: Budget authority is equal to outlays.
ACO = accountable care organization.
Basis of estimate: For this estimate, CBO assumes that S.
870 will be enacted near the end of fiscal year 2017.
CBO estimates that enacting S. 870 would affect direct
spending in each year, beginning in 2019, by a significant
amount, but would have no significant net effect on total
direct spending over the 2018-2027 period. The provisions that
would affect direct spending are discussed below.
Independence at Home Demonstration. The bill would extend
the Independence at Home (IAH) program for two years, through
late fiscal year 2019, and would increase the aggregate cap on
the number of Medicare beneficiaries served by participating
providers from 10,000 to 15,000.
Primary care services provided in a number of settings,
including a patient's home, are covered by the Medicare
program. The IAH program was established to test whether
providing a financial incentive--bonus payments--for providers
to deliver primary care services in a patient's home would
reduce Medicare spending and improve the quality of care.
Providers participating in the IAH program receive a bonus
payment if their practice meets quality standards and the
average cost of Medicare benefits for its patients is less than
95 percent of the average cost of such benefits for similar
patients in the community.\1\
---------------------------------------------------------------------------
\1\Measuring the cost of similar patients in the community has
proved to be a very difficult technical challenge. As a result, each
time the evaluators have analyzed the data for a performance year, they
have recommended making substantial changes to how those costs will be
estimated for a subsequent performance year. Participating providers
have been given the choice of continuing to use the existing method or
switching to the newly developed method.
---------------------------------------------------------------------------
Those bonus payments would add to federal costs. The
ultimate budgetary effect would depend on whether they resulted
in offsetting reductions in Medicare spending. However,
determining that the patients served by participating providers
have Medicare costs that, on average, are below that 95 percent
level does not necessarily indicate that the IAH program
reduces Medicare spending, because it does not indicate that
the program has changed Medicare's costs for beneficiaries
served by participating providers. Expanding the use of home-
based services through the IAH program would probably increase
the use of certain services, but would ultimately reduce
Medicare spending if the resulting change in practice patterns
lowered health care costs or if the IAH program shifted market
share from higher-cost to lower-cost providers, as long as the
resulting savings amounted to more than the bonuses paid
through the program. To date, interim evaluations of the IAH
program have not assessed whether such changes have occurred.
In the absence of such information, CBO has no basis for
concluding whether the bonus payments offered through the IAH
program have spurred participating providers to make changes
affecting Medicare spending.
Further, the bonus payments, as designed, are not targeted
exclusively at inducing changes to reduce spending. Instead,
providers with relatively low costs would qualify for bonuses
whether they make any changes in the way they provide care or
not. Similarly, providers who do make changes, but do not lower
spending by enough to qualify for a bonus would not receive
one. On the basis of the bonus payments made to date, CBO
estimates that Medicare would make annual bonus payments to
participating providers that average about $5 million per
10,000 beneficiaries for each additional year of the
demonstration. Taking into account both the 5,000 increase in
the cap on the number of participating beneficiaries and the
effect of interactions between changes in spending in the fee-
for-service sector and payment rates in the Medicare Advantage
(MA) program, CBO estimates that the bill's changes to the IAH
program would increase Medicare spending by $16 million over
the 2018-2027 period.
Special Needs Plans. Special needs plans (SNPs) are private
health insurance plans in the Medicare Advantage program that
limit enrollment to beneficiaries who require an institutional
level of care, have certain chronic conditions, or are enrolled
in both Medicare and Medicaid (dual eligibles). Under current
law, the authority for an MA plan to operate as a SNP will
expire at the end of calendar year 2018.
S. 870 would permanently authorize SNPs if certain
requirements are met. In particular, SNPs that limit enrollment
to dual eligibles (D-SNPs) would be required to establish
formal agreements with state Medicaid programs by January 1,
2021, to coordinate the provision of Medicaid-covered long-term
services and supports (LTSS) or behavioral health services.
Feedback from stakeholders indicates that state Medicaid
programs find that D-SNPs offer an attractive option for
identifying and contracting with private insurers to provide
LTSS. Therefore, CBO expects that authorizing D-SNPs beyond
2018 would increase the number and the scope of managed LTSS
programs covered by state Medicaid programs.
Based on analysis of information from stakeholders, CBO
concludes that managed LTSS plans enroll a small number of
individuals who otherwise would receive informal, non-federally
financed care in the community. Once those individuals are
enrolled in a managed LTSS plan, they would receive Medicaid-
financed LTSS for the first time. Compared to current law, CBO
estimates that the number of people who would receive Medicaid-
financed LTSS under S. 870 would grow over time. That increase
would rise to about 1,300 by 2027. CBO estimates that expansion
of participation in Medicaid-financed LTSS would increase
federal Medicaid outlays by $123 million over the 2018-2027
period. CBO further estimates that permanently authorizing SNPs
would not have a significant effect on Medicare spending
because CBO estimates that Medicare payments to SNPs, on
average, are comparable to Medicare's payments to other MA
plans or to providers in the fee-for-service sector.
Value-based Insurance Design (VBID) demonstration. The
Center for Medicare and Medicaid Innovation (CMMI) began
conducting a demonstration program in January 2017 to test the
effectiveness of permitting private health insurance plans
participating in the MA program to vary cost-sharing and
benefits for Medicare beneficiaries with certain conditions in
order to encourage the use of certain services and providers.
As with other models tested through the CMMI, the Secretary
will be permitted to expand the program if, after evaluating
the results of the demonstration program, the Chief Actuary of
the Centers for Medicare and Medicaid Services certifies that
expansion would not increase Medicare spending and the
Secretary determines that the expansion would not reduce
quality of care. S. 870 would modify that demonstration project
to make VBID available in all 50 states in 2020 and 2021.
Expanding to all 50 states during testing would limit the
Secretary's flexibility to design and modify the demonstration.
For example, it would be more difficult to focus on elements of
the experiment that an initial evaluation suggests might be
most promising or to ensure that the demonstration involves a
control group that is adequate for the evaluation to produce
meaningful conclusions. CBO expects that limiting that
flexibility would be unlikely to result in greater savings than
a similar model designed and refined under the existing CMMI
program but could result in greater costs. Based on that one-
sided effect on potential savings, CBO estimates that this
provision would increase Medicare spending by a total of $90
million 2020 and 2021. That estimate is in the middle of the
range of possible outcomes.
Telehealth costs in Medicare Advantage bids. Under current
law, MA plans may provide some telehealth services as part of
the standard benefit, mirroring what is covered for
beneficiaries enrolled in Medicare's fee-for-service (FFS)
program. However, if an MA plan wants to provide telehealth
services that go beyond what is covered in the FFS program, the
plan must receive approval to provide those services as
supplemental benefits and use its ``rebate'' to pay for those
services.\2\ S. 870 would allow MA plans to include the cost of
additional telehealth services in their bids for contracts that
cover 2020 or subsequent years. The costs included in the bid
would not include capital or infrastructure expenses.
Telehealth services would not count toward meeting network-
adequacy requirements, and plans could not use the availability
of telehealth services to limit access to in-person services.
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\2\The rebate is a portion of the amount by which the ``benchmark''
amount for the geographic area covered by the plan exceeds the MA
plan's bid for services it is required to cover. The benchmark is based
on estimated spending per beneficiary in the fee-for-service sector in
that geographic area. The rebate portion is between 50 percent and 70
percent, based on the plan's score on certain measures of quality of
care. MA plans are required to use the rebate to pay for benefits not
covered in the fee-for-service sector.
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Based on a review of the literature and discussions with
experts, CBO concluded that coverage of telehealth services by
private payers sometimes results in higher spending and
sometimes results in savings; in either case, the effects on
spending tend to be small. For MA plans that offer telehealth
services as supplemental benefits, this provision would
increase spending, because Medicare's payment would reflect the
full cost of those benefits instead of the 50 percent to 70
percent of the cost that is covered by the rebate. (The other
30 percent to 50 percent is covered by displacing other
supplemental benefits that would be attractive to potential
enrollees.)
In general, CBO expects that an MA plan that begins or
expands coverage of telehealth benefits under S. 870 would do
so based on the plan's expectation that it could manage
telehealth services in a manner that would enable it to lower
its bid. Because coverage of telehealth benefits as a
supplemental benefit is very limited, CBO estimates that the
savings from plans that begin or expand telehealth services
would slightly exceed the increased cost for plans that already
offer telehealth services as a supplemental benefit. On net,
CBO estimates that enactment of this provision would reduce
direct spending by $80 million over the 2018-2027 period.
Telehealth in Accountable Care Organizations. The bill
would expand the ability of certain ACOs to receive Medicare
payment for telehealth services beginning January 1, 2020.
Under current law, Medicare only pays for telehealth services
delivered in rural locations, with the remote provider paid
under the physician fee schedule and the originating site
receiving a facility fee. Nevertheless, an ACO has an incentive
to provide noncovered telehealth services if it expects those
services to reduce the total cost of care for the ACO's
beneficiaries and to result in larger bonus payments from
Medicare.
S. 870 would eliminate the geographic component of the
originating site requirement for ACOs and allow those programs
to receive Medicare payment for certain telehealth services
furnished to the ACO's beneficiaries in their homes. No
facility fee would be paid for services provided in the home of
a beneficiary. CBO estimates that change would increase direct
spending for Medicare by $50 million over the 2018-2027 period.
Telehealth Services for Stroke Patients. Under current law,
coverage of telehealth services is restricted to Medicare
beneficiaries in rural areas. Beginning on January 1, 2021, S.
870 would remove that geographic restriction for telestroke
services (a subset of telehealth services that involves
consultation with a neurologist for a patient suspected of
having had a stroke).
There are two types of stroke: bleeding in the brain
(hemorrhagic) and clotting in the brain (ischemic). Use of a
clot-dissolving drug to treat clotting strokes within three to
four-and-a-half hours of the onset of symptoms substantially
improves outcomes, both by increasing survival rates and by
reducing the likelihood that a stroke patient will be
moderately or severely disabled. However, administering the
clot-dissolving drug to a patient with a bleeding stroke is
likely to cause death. Therefore, a timely neurological
evaluation is essential to determine whether to administer the
clot-dissolving drug to a patient with stroke symptoms.
Emergency medical services in most urban and suburban areas
have protocols to identify patients with stroke symptoms and
transport those patients directly to a hospital that is a
``stroke center.'' As a result, a large majority of stroke
patients in those areas are taken directly to a stroke center.
Such a facility always has a neurologist available--either
onsite or via telehealth--to determine which drugs to
administer to a stroke patient, so enacting S. 870 would not
affect outcomes for such patients.
On the basis of an analysis of Medicare claims data, a
review of the relevant literature, and discussions with
experts, CBO estimates that about 550,000 strokes occur in the
Medicare population in nonrural settings each year. Under S.
870, by CBO's estimates, the proportion of those cases that is
handled using telestroke services would increase from about 6
percent in 2021 to 14 percent in 2027.
To develop spending estimates for the bill's extension of
telestroke services, CBO focused on cohorts of Medicare
patients who receive a telestroke consultation in a given year.
That approach, which tracks groups of patients over a span, is
particularly appropriate when spending is changeable over time.
On the basis of a review of the relevant literature and
discussions with experts, CBO concluded that spending--by the
federal government and nonfederal providers combined--for a
cohort would increase in the year in which the telestroke
consultation occurs and then decline in subsequent years.
Higher spending in the first year would be the result of:
additional consultations, more medications, additional
treatment, and--for patients who otherwise would not have
survived--more spending for post-acute-care services during the
90 days after a hospital stay. Annual spending would be lower
in subsequent years largely because the number of patients who
are discharged from the hospital with moderate or severe
disability would decline significantly as would spending for
long-term care.
Because Medicare does not cover long-term care services
such as nursing home care, much of the savings from avoided
long-term-care services would accrue to beneficiaries, other
private payers, and state Medicaid programs--and not to the
federal government. The federal government would share in the
savings that accrue to state Medicaid programs.
For a given cohort, CBO estimates that cumulative
spending--including spending by nonfederal payers--would be
reduced beginning in the fourth year after the telestroke
consultation. Federal spending would follow the same basic
pattern but with a lag because much of the savings would accrue
to nonfederal payers. CBO estimates that federal spending would
be reduced beginning in the sixth year after the telestroke
consultation.
Taking into account that pattern of an initial increase in
spending and a reduction over time for each cohort of patients
each year, CBO expects that expanding Medicare coverage of
telestroke services ultimately would reduce Medicare spending.
Over the 2018-2027 period, however, CBO estimates the expansion
of telestroke services would increase direct spending by $180
million.
Assignment of beneficiaries to accountable care
organizations. In general, Medicare beneficiaries are assigned
to an ACO when they receive much of their primary care from
providers affiliated with a particular ACO. For most ACOs,
assignment of their beneficiaries is retrospective--that is,
final assignment of a beneficiary occurs after analysis of the
beneficiary's claims for a year. S. 870 would allow ACOs to
have beneficiaries assigned to them prospectively beginning in
2020. CBO estimates that this provision would increase federal
spending by $50 million over the 2018-2027 period. That
conclusion is based on two factors: First, prospective
assignment would result in some beneficiaries being assigned to
an ACO who would not be assigned to any ACO under current law.
That increase in assignment rates would result in an increase
in the number of beneficiaries for whom Medicare makes a
``shared-savings'' payment to an ACO. Second, it would also
weaken the incentive for an ACO to lower costs for
beneficiaries who are not assigned to it.
Use of in-network providers by AOC beneficiaries. Under
current law, health care providers generally are prohibited
from offering financial incentives to Medicare beneficiaries to
patronize the provider. S. 870 would waive that prohibition
with respect to financial incentives offered by certain ACOs to
beneficiaries who receive primary care services from a provider
within the ACO's network. CBO estimates that enacting that
provision of S. 870 would reduce direct spending for Medicare
by $54 million over the 2018-2027 period.
Eligible ACOs would have two potential reasons to offer
financial incentives for patients to use primary care providers
in their networks. The first would be to increase volume at the
expense of providers that are not part of the ACO's network,
which would affect providers' incomes, but would not have a
significant effect on Medicare spending. The second reason is
because the ACO would expect that, on average, a dollar spent
on financial incentives would be more than offset by higher
``shared-savings'' payments. Because shared-savings payments
would increase only if Medicare spending was lower, CBO expects
that eligible ACOs would use those incentive payments in ways
that would result in lower Medicare spending relative to
current law.
Rescissions. S. 870 would rescind amounts earmarked for
making improvements to the Medicare fee-for-service program and
to managing the Medicaid program. CBO estimates those
rescissions would reduce direct spending for Medicare by $370
million and would reduce federal spending for Medicaid by $5
million.
Pay-As-You-Go considerations: The Statutory Pay-As-You-Go
Act of 2010 establishes budget-reporting and enforcement
procedures for legislation affecting direct spending or
revenues. The net changes in outlays that are subject to those
pay-as-you-go procedures are shown in the following table.
CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR S. 870, AS ORDERED REPORTED BY THE SENATE COMMITTEE ON FINANCE ON MAY 18, 2017
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By fiscal year, in millions of dollars--
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2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2017-2022 2017-2027
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NET INCREASE OR DECREASE (-) IN THE DEFICIT
Statutory Pay-As-You-Go Impact................... 0 0 8 55 -167 -113 27 33 38 54 65 -217 0
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Increase in long-term direct spending and deficits: CBO
estimates that enacting the legislation would not increase net
direct spending or on-budget deficits by more than $5 billion
in any of the four consecutive 10-year periods beginning in
2028.
Intergovernmental and private-sector impact: S. 870
contains no intergovernmental or private-sector mandates as
defined in UMRA. CBO estimates that the state share of
increased Medicaid spending for higher enrollment in LTSS plans
would total $93 million over the 2018-2027 period. Because
states have significant flexibility to adjust their financial
and programmatic responsibilities, such additional expenditures
would not result from an intergovernmental mandate as defined
in UMRA.
Estimate prepared by: Federal costs: Alice Burns, Lori
Housman, Jamease Kowalczyk, Kevin McNellis, Andrea Noda, Lisa
Ramirez-Branum, Lara Robillard, Colin Yee, Rebecca Yip; impact
on state, local, and tribal governments: Zachary Byrum; impact
on the private sector: Amy Petz.
Estimate approved by: Holly Harvey, Deputy Assistant
Director for Budget Analysis.
IV. VOTES OF THE COMMITTEE
In compliance with paragraph 7(b) of rule XXVI of the
Standing Rules of the Senate, the Committee states that, with a
majority present, the Creating High-Quality Results and
Outcomes Necessary to Improve Chronic (CHRONIC) Care Act of
2017 was ordered favorably reported by a roll call vote of 26
ayes and 0 nays on May 18, 2017.
V. REGULATORY IMPACT AND OTHER MATTERS
A. Regulatory Impact
Pursuant to paragraph 11(b) of rule XXVI of the Standing
Rules of the Senate, the Committee makes the following
statement concerning the regulatory impact that might be
incurred in carrying out the provisions of the bill.
Impact on individuals and businesses, personal privacy and paperwork
In carrying out the provisions of the bill, there is no
expected imposition of additional administrative requirements
or regulatory burdens on individuals or businesses. The
provisions of the bill do not impact personal privacy.
B. Unfunded Mandates Statement
The Committee adopts as its own the estimate of federal
mandates prepared by the Director of the Congressional Budget
Office pursuant to section 423 of the Unfunded Mandates Reform
Act of 1995 (P.L. 104-4). The Congressional Budget Office
estimates the bill would not impose intergovernmental or
private-sector mandates as defined in the Unfunded Mandates
Reform Act and would impose no costs on state, local, or tribal
governments.
VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
In the opinion of the Committee, it is necessary in order
to expedite the business of the Senate, to dispense with the
requirements of paragraph 12 of rule XXVI of the Standing Rules
of the Senate (relating to the showing of changes in existing
law made by the bill as reported by the Committee).
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