[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 5633 Introduced in Senate (IS)]
<DOC>
118th CONGRESS
2d Session
S. 5633
To establish Medicare flex fund accounts and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
December 19 (legislative day, December 16), 2024
Mr. Scott of Florida introduced the following bill; which was read
twice and referred to the Committee on Finance
_______________________________________________________________________
A BILL
To establish Medicare flex fund accounts 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 ``Medicare Flex Fund Accounts and
Flexible Benefits Act of 2024''.
SEC. 2. MEDICARE FLEX FUND ACCOUNTS.
(a) In General.--Part VIII of subchapter F of chapter 1 of the
Internal Revenue Code of 1986 is amended by adding at the end the
following new section:
``SEC. 530A. MEDICARE FLEX FUND ACCOUNTS.
``(a) In General.--A Medicare flex fund account shall be exempt
from taxation under this subtitle. Notwithstanding the preceding
sentence, the Medicare flex fund account shall be subject to the taxes
imposed by section 511 (relating to imposition of tax on unrelated
business income of charitable organizations).
``(b) Medicare Flex Fund Account.--For purposes of this section:
``(1) In general.--The term `Medicare flex fund account'
means a trust created or organized in the United States as a
Medicare flex fund account exclusively for the purpose of
paying the qualified medical expenses of the account
beneficiary, but only if the written governing instrument
creating the trust meets the following requirements:
``(A) Except in the case of a rollover contribution
described in subsection (c)(2), section 220(f)(5), or
section 223(f)(5) or a contribution described in
section 138A(1), no contribution will be accepted--
``(i) unless it is in cash,
``(ii) unless the account beneficiary is an
eligible individual for the taxable year in
which the contribution is made, and
``(iii) to the extent such contribution,
when added to previous contributions to the
trust for the calendar year, exceeds the sum
of--
``(I) the dollar amount in effect
under section 223(b)(2)(A), plus
``(II) in the case of an individual
who has attained age 55 before the
close of the calendar year, the dollar
amount in effect under section
223(b)(3)(B).
``(B) The trustee is a bank (as defined in section
408(n)), an insurance company (as defined in section
816), or another person who demonstrates to the
satisfaction of the Secretary that the manner in which
such person will administer the trust will be
consistent with the requirements of this section.
``(C) No part of the trust assets will be invested
in life insurance contracts.
``(D) The assets of the trust will not be
commingled with other property except in a common trust
fund or common investment fund.
``(E) The interest of an individual in the balance
in his account is nonforfeitable.
``(2) Qualified medical expenses.--
``(A) In general.--Except as otherwise provided in
this paragraph, the term `qualified medical expenses'
shall have the meaning given such term under section
223(d)(2) (determined without regard to subparagraph
(B) thereof).
``(B) Exception for medigap premiums.--Such term
shall not include any premium for a medicare
supplemental policy under section 1882 of the Social
Security Act (42 U.S.C. 1395ss).
``(3) Eligible individual.--The term `eligible individual'
means, with respect to any taxable year, any individual
entitled to, or enrolled for, benefits under part A of title
XVIII of the Social Security Act or enrolled for benefits under
part B or D of such title, including individuals covered under
a Medicare Advantage plan, on the last day of such taxable
year.
``(4) Certain rules to apply.--Rules similar to the
following rules shall apply for purposes of this section:
``(A) Section 219(f)(3) (relating to time when
contributions made).
``(B) Section 408(g) (relating to community
property laws).
``(C) Section 408(h) (relating to custodial
accounts).
``(D) Paragraphs (2) and (4) of section 408(e).
``(c) Tax Treatment of Distributions.--
``(1) In general.--Any amount distributed out of a Medicare
flex fund account shall be subject to tax in the same extent
and in the same manner as distributions from a health savings
account under section 223(f), except that--
``(A) amounts described in paragraph (2) thereof
shall be includible in gross income in the manner
provided under section 72 (after taking into account
rules similar to the rules of section 408(d)(2)),
``(B) for purposes of paragraph (3)(B) thereof a
rollover contribution described in paragraph (2) shall
not be considered an excess contribution, and
``(C) paragraph (4) thereof shall not apply.
``(2) Rollover contribution.--An amount is described in
this paragraph as a rollover contribution if it meets the
requirements of subparagraphs (A) and (B).
``(A) In general.--An amount distributed from a
Medicare flex fund account shall not be includible in
gross income if such amount is paid or distributed from
a Medicare flex fund account to the account beneficiary
to the extent the amount received is paid into a
Medicare flex fund account for the benefit of such
beneficiary not later than the 60th day after the day
on which the beneficiary receives the payment or
distribution.
``(B) Limitation.--This paragraph shall not apply
to any amount described in subparagraph (A) received by
an individual from a Medicare flex fund account if, at
any time during the 1-year period ending on the day of
such receipt, such individual received any other amount
described in subparagraph (A) from a Medicare flex fund
account which was not includible in the individual's
gross income because of the application of this
paragraph.
``(d) Reports.--The Secretary may require the trustee of a Medicare
flex fund account to make such reports regarding such account to the
Secretary and to the account beneficiary with respect to contributions,
distributions, the return of excess contributions, and such other
matters as the Secretary determines appropriate. The reports required
by this subsection shall be filed at such time and in such manner and
furnished to such individuals at such time and in such manner as may be
required by the Secretary.''.
(b) Government Contributions.--Part III of subchapter B of chapter
1 of the Internal Revenue Code of 1986 is amended by inserting after
section 138 the following new section:
``SEC. 138A. CERTAIN CONTRIBUTIONS TO MEDICARE FLEX FUND ACCOUNTS.
``Gross income shall not include any payment to the Medicare flex
fund account (as defined in section 530A) of an individual by--
``(1) the Secretary of Health and Human Services, or
``(2) the administrator of a Medicare Advantage plan.''.
(c) Contributions From Other Savings Vehicles.--
(1) Health savings accounts.--Section 223(f)(5) of the
Internal Revenue Code of 1986 is amended by inserting ``or a
Medicare flex fund account (as defined in section 530A)'' after
``paid into a health savings account''.
(2) Archer msas.--Section 220(f)(5) of such Code is amended
by striking ``or a health savings account (as defined in
section 223(d))'' and inserting ``, a health savings account
(as defined in section 223(d)), or a Medicare flex fund account
(as defined in section 530A)''.
(3) IRA distributions.--Section 408(d) of such Code is
amended by adding at the end the following new paragraph:
``(10) Distribution for medicare flex fund account
funding.--
``(A) In general.--In the case of an individual who
is an eligible individual (as defined in section
530A(b)(3)) and who elects the application of this
paragraph for a taxable year, gross income of the
individual for the taxable year does not include a
qualified Medicare FFA funding distribution to the
extent such distribution is otherwise includible in
gross income.
``(B) Qualified medicare ffa funding
distribution.--For purposes of this paragraph, the term
`qualified Medicare FFA funding distribution' means a
distribution from an individual retirement plan (other
than a plan described in subsection (k) or (p)) of the
employee to the extent that such distribution is
contributed to the Medicare flex fund account (as
defined in section 530A) of the individual in a direct
trustee-to-trustee transfer.
``(C) Limitation.--
``(i) In general.--The amount excluded from
gross income by subparagraph (A) shall not
exceed the annual limitation under section
530A(b)(1)(A)(iii).
``(ii) One-time transfer.--An individual
may make an election under subparagraph (A)
only for one qualified Medicare FFA funding
distribution during the lifetime of the
individual. Such an election, once made, shall
be irrevocable.
``(D) Application of section 72.--Rules similar to
the rules of paragraph (9)(E) shall apply for purposes
of this paragraph.''.
(d) Excess Contributions.--
(1) In general.--Section 4973(a) of such Code is amended by
striking ``or'' at the end of paragraph (5), by inserting
``or'' at the end of paragraph (6), and by inserting after
paragraph (6) the following new paragraph:
``(7) a Medicare flex fund account (within the meaning of
section 530A),''.
(2) Excess contributions.--Section 4973 of such Code is
amended by adding at the end the following new subsection:
``(i) Excess Contributions to Medicare Flex Fund Accounts.--
``(1) In general.--In the case of a Medicare flex fund
account, the term `excess contributions' means the sum of--
``(A) the amount by which the amount contributed
for the taxable year to such accounts exceeds the
contribution limitation determined under section
530A(b)(1)(A)(iii), and
``(B) the amount determined under this subsection
for the preceding taxable year, reduced by the sum of--
``(i) the distributions out of the accounts
for the taxable year which were not used
exclusively to pay the qualified medical
expenses (as determined under section
223(f)(2)) of the account beneficiary,
``(ii) the excess of--
``(I) the distributions out of the
accounts for such taxable year which
were used exclusively to pay the
qualified medical expenses (as
determined under section 223(f)(1)) of
the account beneficiary, over
``(II) the amount which would be
taxable by reason of section
530A(c)(1)(A) if such amounts were
described in section 223(f)(2) with
respect to such distributions, and
``(iii) the excess (if any) of the maximum
amount which may be contributed to the accounts
for the taxable year over the amount
contributed to the accounts for the taxable
year.
``(2) Special rules.--For purposes of paragraph (1), the
following contributions shall not be taken into account:
``(A) Any contribution which is distributed out of
the Medicare flex fund account in a distribution if--
``(i) such distribution is received by the
individual on or before the last day prescribed
by law (including extensions of time) for
filing such individual's return for such
taxable year, and
``(ii) such distribution is accompanied by
the amount of net income attributable to such
excess contribution.
``(B) Any rollover contribution described in
section 220(f)(5), 223(f)(5), or 530A(c)(2).''.
(e) Application of Prohibited Transaction Rules.--
(1) In general.--Section 4975(e)(1) of the Internal Revenue
Code of 1986 is amended by striking ``or'' at the end of
subparagraph (F), by redesignating subparagraph (G) as
subparagraph (H), and by inserting after subparagraph (F) the
following new subparagraph:
``(G) a Medicare flex fund account described in
section 530A, or''.
(2) Special rule.--Section 4975(c) of such Code is amended
by adding at the end the following new paragraph:
``(8) Special rule for medicare flex fund accounts.--An
individual for whose benefit a Medicare flex fund account
(within the meaning of section 530A) is established shall be
exempt from the tax imposed by this section with respect to any
transaction concerning such account (which would otherwise be
taxable under this section) if, with respect to such
transaction, the account ceases to be a Medicare flex fund
account by reason of the application of section 530A(b)(4)(D)
to such account.''.
(f) Other Conforming Amendments.--
(1) Section 35(g)(3) of the Internal Revenue Code of 1986
is amended by striking ``or from a health savings account (as
defined in section 223(d))'' and inserting ``, from a health
savings account (as defined in section 223(d)), or from a
Medicare flex fund account (as defined in section 530A(b))''.
(2) Section 848(e)(1)(B) of such Code is amended by
striking ``and'' at the end of clause (iv), by striking the
period at the end of clause (v) and inserting ``, and'', and by
adding at the end the following new clause:
``(vi) any contract which is a Medicare
flex fund account (as defined in section
530A(b)).''.
(3) Section 877A(e)(2) of such Code is amended by inserting
``a Medicare flex fund account (as defined in section
530A(b)),'' after ``a health savings account (as defined in
section 223)''.
(4) Section 6693(a)(2) of such Code is amended by striking
``and'' at the end of subparagraph (E), by striking the period
at the end of subparagraph (F) and inserting ``, and'', and by
inserting after subparagraph (G) the following new
subparagraph:
``(G) section 530A(d) (relating to Medicare flex
fund accounts).''.
(5) Section 1027(g)(4) of the Consumer Financial Protection
Act of 2010 (12 U.S.C. 5517(g)(4)) is amended by striking ``or
530'' and inserting ``530, or 530A''.
(g) Clerical Amendments.--
(1) The table of sections for part VIII of subchapter F of
chapter 1 of such Code is amended by adding at the end the
following new item:
``Sec. 530A. Medicare flex fund accounts.''.
(2) The table of sections for part III of subchapter B of
chapter 1 of such Code is amended by inserting after the item
relating to section 138 the following new item:
``Sec. 138A. Certain contributions to Medicare flex fund accounts.''.
(h) Effective Date.--The amendments made by this section shall
apply to taxable years beginning on or after January 1, 2026.
SEC. 3. MEDICARE FLEX FUND ACCOUNTS UNDER MEDICARE ADVANTAGE.
(a) Requirement for Medicare Flex Fund Accounts.--
(1) MA plan requirement to establish medicare flex fund
account on behalf of an enrollee.--Section 1851 of the Social
Security Act (42 U.S.C. 1395w-21) is amended by adding at the
end the following new subsection:
``(k) MA Plan Requirement to Establish Medicare FFA on Behalf of an
Enrollee.--
``(1) In general.--Notwithstanding any other provision of
law and subject to paragraph (4), any MA plan offered under
this part (other than an MSA plan) shall establish a Medicare
flex fund account (as defined in section 530A of the Internal
Revenue Code of 1986 and referred to in this subsection as a
`Medicare FFA') on behalf of an enrollee in the plan.
``(2) Rebates.--In the case of a plan that is required to
provide a monthly rebate to an enrollee under section
1854(b)(1)(C), the MA plan may provide part or all of such
rebate through depositing money into the enrollee's Medicare
FFA.
``(3) Incentive payments.--
``(A) In general.--Notwithstanding section
1851(h)(4)(A) or any other provision of this part and
subject to subparagraph (B), MA plans may deposit money
into an enrollee's Medicare FFA as a result of the
enrollee completing educational or training programs,
programs for chronic disease management, programs that
promote wellness and health, or other programs as
determined by the Secretary.
``(B) Rules.--In making the deposits described in
subparagraph (A), the following rules shall apply:
``(i) No payment shall be made to an MA
organization under this part as a result of
such deposits.
``(ii) In submitting bid information
required under section 1854, the MA
organization offering the MA plan shall not
take into account such deposits.
``(iii) The MA plan may not charge a
premium or otherwise increase a premium under
section 1854 as a result of such deposits.
``(4) Initial payment floor.--
``(A) In general.--Subject to subparagraph (B), for
the first 3 years a Medicare FFA is established
pursuant to paragraph (1) with respect to an enrollee,
each MA plan shall deposit no less than $400 each year
into the enrollee's Medicare FFA.
``(B) Rebates and incentive payments.--The rebates
described in paragraph (2) and incentive payments
described in paragraph (3) shall count towards the
required minimum deposit amount described in
subparagraph (A).
``(5) Prohibition on spending medicare ffas on medigap
premiums.--An enrollee may not spend any amount in a Medicare
FFA on a premium for a medicare supplemental policy under
section 1882.
``(6) Waiver of medicare ffa requirement for certain
plans.--
``(A) In general.--The Secretary may waive the
requirement described in paragraph (1) for--
``(i) a specialized MA plan for special
needs individuals;
``(ii) an employer sponsored MA plan
described in section 1857(i)(2); and
``(iii) an MA plan in which an enrollee in
such plan already has a Medicare FFA if the
study required by section 3(b) of the Medicare
Flex Fund Accounts and Flexible Benefits Act of
2024 concludes that it is feasible to permit
Medicare beneficiaries enrolled in an MA plan
to select their preferred Medicare FFA band
under the plan.
``(B) Enrollee choice.--Notwithstanding
subparagraph (A), an MA plan described in such
subparagraph shall establish a Medicare FFA if an
enrollee in such plan elects to have a Medicare FFA
established on behalf of the enrollee.
``(7) Education.--The Secretary shall include information
regarding Medicare FFAs in relevant education materials,
including--
``(A) the notice required under section 1804(a)
(commonly referred to as the Medicare & You handbook);
``(B) any site-of-service transparency information
made available to the public under section 1834(t);
``(C) any information provided to individuals
regarding coverage options under section 1851(d); and
``(D) in consultation with the Secretary of the
Treasury, additional general beneficiary educational
material regarding this title and this part.''.
(2) Effective date.--The amendment made by paragraph (1)
shall apply to plan years beginning on or after January 1,
2026.
(b) HHS Study and Report on Beneficiaries Choosing Their Preferred
Bank for Medicare FFAs.--
(1) Study.--The Secretary of Health and Human Services (in
this subsection referred to as the ``Secretary'') shall conduct
a study on the feasibility of permitting Medicare beneficiaries
enrolled in a Medicare Advantage plan under part C of title
XVIII of the Social Security Act (42 U.S.C. 1395w-21 et seq.)
to select their preferred Medicare flex fund account (as
described in section 1851(k) of such Act (42 U.S.C. 1395w-
21(k))) bank under the plan. Such study shall include an
analysis of any administrative actions that the Secretary may
take in order to permit such beneficiaries to make such
selection.
(2) Report.--Not later than 1 year after the date of
enactment of this Act, the Secretary shall submit to Congress a
report on the study conducted under paragraph (1), together
with--
(A) a description of any administrative actions
described in paragraph (1) that the Secretary has
taken, or plans to take; and
(B) recommendations for such legislation as the
Secretary determines appropriate.
(c) HHS Study and Report on Beneficiaries Choosing Their Preferred
Supplemental Health Benefits.--
(1) Study.--The Secretary of Health and Human Services (in
this subsection referred to as the ``Secretary''), shall
conduct a study on the feasibility of permitting Medicare
beneficiaries enrolled in a Medicare Advantage plan under part
C of title XVIII of the Social Security Act (42 U.S.C. 1395w-21
et seq.) to select their preferred supplemental health benefits
under such plan and have the savings from unused benefits
deposited into the Medicare flex fund account (as described in
section 1851(k) of such Act (42 U.S.C. 1395w-21(k))) of the
enrollee. Such study shall include an analysis of any
administrative actions that the Secretary may take in order to
permit such beneficiaries to make such selection.
(2) Consultation.--In carrying out the study under
paragraph (1), the Secretary shall conduct public meetings and
consult with Medicare Advantage plans, actuaries, and health
think tanks.
(3) Report.--Not later than 1 year after the date of
enactment of this Act, the Secretary shall submit to Congress a
report on the study conducted under paragraph (1), together
with--
(A) a description of any administrative actions
described in paragraph (1) that the Secretary has
taken, or plans to take; and
(B) recommendations for such legislation as the
Secretary determines appropriate.
SEC. 4. MEDICARE FLEX FUND ACCOUNTS UNDER OTHER MEDICARE PROGRAMS.
(a) CMI Model.--Section 1115A(b)(2)(B) of the Social Security Act
(42 U.S.C. 1315a(b)(2)(B)) is amended by adding at the end the
following new clause:
``(xxviii) Permitting individuals
participating in a model conducted under this
section to have a Medicare flex fund account
created by section 530A of the Internal Revenue
Code of 1986.''.
(b) Incentive Programs.--The Secretary of Health and Human Services
may include a Medicare flex fund account created by section 530A of the
Internal Revenue Code of 1986 as a component in any Medicare shared
savings program or other Medicare incentive based program established
after the date of enactment of this section.
SEC. 5. SITE OF SERVICE PRICE TRANSPARENCY UPDATE.
(a) Price Transparency Website Update.--Section 1834(t)(1) of the
Social Security Act (42 U.S.C. 1395m(t)(1)) is amended--
(1) in subparagraph (A), by striking ``and'' at the end;
(2) in subparagraph (B), by striking the period at the end
and inserting a semicolon; and
(3) by adding at the end the following:
``(C) the hospital outpatient departments and
ambulatory surgical centers nearest to a specific zip
code entered on the website;
``(D) whether payments for items and services
furnished will be made under the payment system under
section 1833(t) or under section 1833(i); and
``(E) if available, the quality rating of each
hospital outpatient department and surgical center.''.
(b) Price Transparency Website Advisory Group.--
(1) Establishment.--Not later than 90 days after the date
of enactment of this Act, the Administrator of the Centers for
Medicare & Medicaid Services (referred to in this subsection as
the ``Administrator'') shall establish a Medicare Price
Transparency Website Advisory Group (referred to in the
subsection as the ``Advisory Group'').
(2) Members.--The Advisory Group shall be composed of the
following individuals or the designees of those individuals:
(A) The Administrator.
(B) The Chair of the Medicare Payment Advisory
Commission.
(C) Two representatives from each of the following
sectors to be selected by the Administrator:
(i) Medical.
(ii) Technology.
(iii) Think tanks with a background in
health economics.
(D) Four individuals from non-profit organizations
that represent seniors.
(E) Any other individual the Administrator
determines appropriate.
(3) No compensation for members.--A member of the Advisory
Group shall serve without compensation in addition to any
compensation received for the service of the member as an
officer or employee of the United States, if applicable.
(4) Duties.--
(A) In general.--The Advisory Group shall review
the website described in section 1834(t) of the Social
Security Act (42 U.S.C. 1395(t)) (referred to in this
subsection as the ``website'') and provide
recommendations to the Secretary of Health and Human
Services (referred to in the subsection as the
``Secretary'') on ways the website could be changed to
increase its usability and allow users of the website
to better understand the cost and quality for services
offered by hospital outpatient departments and
ambulatory surgical centers covered by the Medicare
program under title XVIII of such Act (42 U.S.C. 1395
et seq.) in order for users of the website to be better
informed regarding their medical choices.
(B) Report.--Not later than 180 days after the
first meeting of the Advisory Group, the Advisory Group
shall submit a report to the Secretary detailing its
recommendations.
(5) Website update.--Not later than 1 year after receiving
the report required by paragraph (4)(B), the Secretary shall
update the website considering the recommendations contained in
such report.
SEC. 6. VOLUNTARY PATIENT DRIVEN BENEFIT FLEXIBILITY.
(a) Direct Primary Care Payment Advisory Group.--
(1) Establishment.--Not later than 90 days after the date
of enactment of this Act, the Administrator of the Centers for
Medicare & Medicaid Services (referred to in this subsection as
the ``Administrator'') shall establish a Direct Primary Care
Payment Advisory Group (referred to in the subsection as the
``Advisory Group'').
(2) Members.--The Advisory Group shall be composed of the
following individuals or the designees of those individuals:
(A) The Administrator.
(B) The Chair of the Medicare Payment Advisory
Commission.
(C) Two primary care physicians with experience in
direct primary care.
(D) Two specialist physicians who provide primary
care services to patients with chronic diseases with
experience in direct primary care.
(E) Two representatives of Medicare Advantage
plans.
(F) Two health actuaries.
(G) Two representatives of think tanks with a
health policy background.
(H) Any other individual the Administrator
determines appropriate.
(3) No compensation for members.--A member of the Advisory
Group shall serve without compensation in addition to any
compensation received for the service of the member as an
officer or employee of the United States, if applicable.
(4) Duties.--
(A) In general.--The Advisory Group shall
determine--
(i) a definition of primary care benefits
provided under Medicare Advantage plans; and
(ii) how best to calculate the amount
Medicare Advantage plans would save if
patients, including patients that have chronic
conditions and for whom primary care is
provided by a specialist physician, were to
contract with providers of primary care on
their own without using health insurance.
(B) Report.--Not later than 180 days after the
first meeting of the Advisory Group, the Advisory Group
shall submit a report to the Secretary of Health and
Humans Services detailing its recommendations.
(b) MA Plans.--Section 1852(a)(1) of the Social Security Act (42
U.S.C. 1395w-22(a)(1)) is amended--
(1) in subparagraph (A), by inserting ``and the patient
flexibility and bundled payment requirements described in
subparagraph (C)'' after ``under section 1854(f)(1)(A))''; and
(2) by adding at the end the following new subparagraph:
``(C) Direct primary care and flexibility
payments.--
``(i) Direct primary care payments.--
``(I) In general.--Beginning with
plan years beginning on or after
January 1, 2027, each Medicare
Advantage plan shall allow enrollees to
elect to receive a direct primary care
benefit payment, described in subclause
(II), in lieu of receiving coverage of
primary care benefits (as defined by
the Secretary taking into account the
recommendations of the Direct Primary
Care Payment Advisory Group established
under section 6(a) of the Medicare Flex
Fund Accounts and Flexible Benefits Act
of 2024) under the Medicare Advantage
plan.
``(II) Direct primary care benefit
payment.--The direct primary care
benefit payment for an enrollee shall
be--
``(aa) equal to the amount
of the average per capita
savings to the Medicare
Advantage plan by not providing
coverage of primary care
benefits under such plan to
such enrollee (as determined by
the Secretary taking into
account the recommendations of
the Direct Primary Care Payment
Advisory Group established
under section 6(a) of the
Medicare Flex Fund Accounts and
Flexible Benefits Act of 2024);
and
``(bb) deposited into the
Medicare flex fund account (as
defined in section 530A of the
Internal Revenue Code of 1986
and referred to in this
subparagraph as a `Medicare
FFA') of such enrollee.
``(III) Election.--
``(aa) In general.--Subject
to item (bb), during the period
beginning on January 1 and
ending on March 31 of each plan
year, an enrollee may elect to
receive the direct primary care
benefit payment for that year.
``(bb) Other
requirements.--
``(AA) Frequency of
change.--If an enrollee
makes the election
described in item (aa),
the enrollee may elect
to stop receiving the
direct primary care
benefit payment and
begin to receive
primary care benefits
under the Medicare
Advantage plan for the
remainder of that
calendar year.
``(BB) Carry over
of election.--If an
enrollee makes the
election described in
item (aa), the enrollee
shall continue to
receive the direct
primary care benefit
payment until the
enrollee elects to
receive primary care
benefits under the
Medicare Advantage plan
for the year during the
period described in
such item, the enrollee
makes the election
described in subitem
(AA), or the enrollee
changes Medicare
Advantage plans.
``(CC) Changing of
medicare advantage
plans.--If an enrollee
changes Medicare
Advantage plans as
described in subitem
(BB), the enrollee may
elect to receive the
direct primary care
benefit payment or to
receive primary care
benefits under the
Medicare Advantage plan
for the remainder of
the year.
``(ii) Flexibility payments for shoppable
services.--
``(I) In general.--Beginning with
plan years beginning on or after
January 1, 2027, each Medicare
Advantage plan shall allow enrollees to
receive a payment from such plan that
meets the requirements of subclause
(II) and allows enrollees to receive
treatment from a pre-approved alternate
provider.
``(II) Payment.--The payment
described in subclause (I) shall--
``(aa) be the same amount
that would have been paid to an
in-network provider and include
any processing costs; and
``(bb) be deposited in the
Medicare FFA of the enrollee
once a contract has been signed
by the enrollee, the Medicare
Advantage plan, and the
alternative provider to provide
treatment to the member.
``(III) Alternative providers.--
``(aa) Menu of options.--
Each Medicare Advantage plan
may develop a list of pre-
approved alternate providers
and information regarding the
price, treatment outcomes, and
customer experience of each
pre-approved alternate provider
for certain treatments,
procedures, and episodes of
care. If a Medicare Advantage
plan chooses to develop such
list, the Medicare Advantage
plan shall provide such list to
an enrollee upon the request of
such enrollee.
``(bb) Providing the menu
to the enrollee.--Each Medicare
Advantage plan shall provide
the list described in item (aa)
before the enrollee requests
such list if it could result in
the enrollee receiving
treatment for a lesser price.
``(cc) No cost for being on
alternative treatment location
list.--No Medicare Advantage
plan shall charge a provider
for being on a list described
in item (aa).
``(IV) Definition of pre-approved
alternate provider.--For the purposes
of this clause, the term `pre-approved
alternate provider' means a provider of
services or a supplier--
``(aa) located in the
United States or a territory of
the United States;
``(bb) licensed by the
State or territory in which the
provider furnishes services;
``(cc) willing to provide
services on a cash basis; and
``(dd) that has received
the review described in
subclause (V).
``(V) Review of services.--Before
an enrollee has received treatment by a
pre-approved alternative provider, the
Medicare Advantage plan shall review
any contracts or documents relating to
the treatment provided by such provider
to ensure that--
``(aa) any enrollee who
elects to receive treatment by
the provider will receive
appropriate health quality and
the desired treatment outcome;
and
``(bb) to protect the
enrollee from hidden fees or
surprise bills, the cost of the
service quoted by the pre-
approved alternative provider
will be the total price paid by
the enrollee.
``(iii) Rule of construction.--Nothing in
this subparagraph shall be construed to limit
any responsibility of a Medicare Advantage plan
under this part, to reduce the actuarial value
of such a plan, or to change any network
adequacy requirement.''.
(c) Prescription Drug Coverage.--Section 1860D-4 of the Social
Security Act (42 U.S.C. 1395w-104) is amended by adding at the end the
following new subsection:
``(p) Pharmaceutical Savings.--
``(1) In general.--In the case of a covered part D drug on
the formulary of a prescription drug plan or an MA-PD plan, the
plan shall, if requested by an enrollee of such plan, provide
such enrollee with a payment described in paragraph (2) in lieu
of the plan paying for such covered part D drug under the plan.
``(2) Payment.--The payment described in paragraph (1)
shall be an amount equal to the amount the prescription drug
plan or MA-PD plan would reimburse a preferred pharmacy for
such covered part D drug plus any fees that would be paid to
such plan (or a subsidiary of such plan) by the manufacturer of
such covered part D drug.''.
(d) Rule for Patient Driven Benefit Flexibility Spending Regarding
Deductibles and Out-of-Pocket Spending.--Section 1859 of the Social
Security Act (42 U.S.C. 1395w-28) is amended by adding at the end the
following new subsection:
``(j) Rule for Patient Driven Benefit Flexibility Spending
Regarding Deductibles and Out-of-Pocket Spending.--Any amount spent by
an enrollee from payments made by an MA plan under section
1852(a)(1)(C) or 1860D-4(p) shall not count towards any deductible or
maximum limitation on out-of-pocket expenses applicable to such MA
plan.''.
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