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114th Congress   }                                   {   Rept. 114-172
                        HOUSE OF REPRESENTATIVES
 1st Session     }                                   {          Part 1

======================================================================



 
     MEDICARE INDEPENDENCE AT HOME MEDICAL PRACTICE DEMONSTRATION 
                        IMPROVEMENT ACT OF 2015

                                _______
                                

 June 23, 2015.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

Mr. Ryan of Wisconsin, from the Committee on Ways and Means, submitted 
                             the following

                              R E P O R T

                         [To accompany S. 971]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Ways and Means, to whom was referred the 
bill (S. 971) to amend title XVIII of the Social Security Act 
to provide for an increase in the limit on the length of an 
agreement under the Medicare independence at home medical 
practice demonstration program, having considered the same, 
report favorably thereon without amendment and recommend that 
the bill do pass.

                                CONTENTS

                                                                   Page
 I. SUMMARY AND BACKGROUND............................................2
        A. Purpose and Summary...................................     2
        B. Background and Need for Legislation...................     2
        C. Legislative History...................................     2
II. EXPLANATION OF THE BILL...........................................3
III.VOTES OF THE COMMITTEE............................................3

IV. BUDGET EFFECTS OF THE BILL........................................4
        A. Committee Estimate of Budgetary Effects...............     4
        B. Statement Regarding New Budget Authority and Tax 
            Expenditures Budget Authority........................     4
        C. Cost Estimate Prepared by the Congressional Budget 
            Office...............................................     4
 V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE........5
        A. Committee Oversight Findings and Recommendations......     5
        B. Statement of General Performance Goals and Objectives.     5
        C. Information Relating to Unfunded Mandates.............     5
        D. Congressional Earmarks, Limited Tax Benefits, and 
            Limited Tariff Benefits..............................     5
        E. Duplication of Federal Programs.......................     5
        F. Disclosure of Directed Rule Makings...................     6
VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED.............6
        A. Text of Existing Law Amended or Repealed by the Bill, 
            as Reported..........................................     6
        B. Changes in Existing Law Proposed by the Bill, as 
            Reported.............................................    11

                       I. SUMMARY AND BACKGROUND


                         A. Purpose and Summary

    The bill, S. 971, Medicare Independence at Home Extension 
Medical Practice Demonstration Improvement Act of 2015, as 
reported, would extend the expiring three-year Medicare 
Independence at Home demonstration, which provides practices 
led by physicians and nurse practitioners incentive to furnish 
services in the lower cost home setting while maintaining high 
quality, for an additional two years.

                 B. Background and Need for Legislation

    Public Law 111-148 and 111-152 established the Medicare 
Independence at Home (IAH) demonstration. CMS launched the IAH 
demonstration in 2012 that allowed 15 practices that provide 
intensive services to beneficiary's with at least two chronic 
conditions in their home in order to avoid care in more costly 
settings, e.g. emergency department, hospital. Participating 
practices, which aim to coordinate care for at least 200 
beneficiaries, receive an incentive payment if they reduce the 
total cost of care to participating beneficiaries while 
maintaining quality.
    CMS is in the final stages of determining which practices 
earned a bonus payment based on their first year's performance. 
CMS expected to make this determination in 2014 but the agency 
delayed the decision to resolve concerns about the methodology 
used to evaluate the performance of the participating 
practices. Taking the time to fairly evaluate the practices' 
performance has resulted in the scenario in which the 
statutorily mandated three-year demonstration is expiring 
before the first year's results are final.
    On April 16, 2015, Senator Wyden introduced S. 971, 
Medicare Independence at Home Extension Medical Practice 
Demonstration Improvement Act of 2015.
    On April 22, 2015, the Senate passed S. 971 by voice vote. 
S. 971 would extend the IAH demonstration for two years.
    On May 1, 2015, Representative Burgess introduced H.R. 
2196, which is identical to S. 971. Representative Peter Roskam 
and Representative Mike Thompson is each an H.R. 2196 original 
co-sponsor.
    Congress has long been interested in establishing an IAH 
demonstration, with a bill being introduced in each chamber 
back to the 110th Congress.

                         C. Legislative History


Background

    H.R. 2196 was introduced on May 1, 2015, and was referred 
to the Committee on Ways and Means, in addition to the 
Committee on Energy and Commerce.
    S. 971 passed the Senate by voice vote on April 22, 2015.

Committee hearings

    None.

Committee action

    The Committee marked up S.971 on June 2, 2015 and ordered 
the bill favorably reported to the House of Representatives by 
a voice vote (with a quorum present).

                      II. EXPLANATION OF THE BILL


Medicare Independence at Home Extension Medical Practice Demonstration 
                        Improvement Act of 2015


                              PRESENT LAW

    Public Law 111-148 and 111-152 established the Medicare 
Independence at Home (IAH) demonstration and specified the key 
elements for its implementation, including that participating 
practices: are physician or nurse practitioner led; have 
experience furnishing home care; furnish services to at least 
200 beneficiaries, who have at least two chronic conditions and 
voluntarily participate; and use health information technology. 
The law states that practices receive an incentive payment for 
a year if expenditures are at least five percent below an 
expenditure target established for that year and they meet 
certain quality performance standards. The law requires that 
IAH demonstration begin by 2012 and that CMS agreements with 
participating practices cannot exceed three years.

                           REASONS FOR CHANGE

    The Committee believes action on S. 971 is needed to enable 
the 15 practice participants to continue to engage in a 
demonstration project that aims to find a viable model to 
provide beneficiaries with high-quality care in their preferred 
home setting while also reducing Medicare spending. Further, 
the S. 971 two-year IAH demonstration extension provides CMS 
with time to ensure that it calculates the initial results 
correctly so it makes a fair determination on practice 
incentive payments and to inform whether the model is 
sustainable.

                        EXPLANATION OF PROVISION

    The Medicare Independence at Home Extension Medical 
Practice Demonstration Improvement Act of 2015 would extend the 
IAH demonstration that was launched in 2012 by two years.

                             EFFECTIVE DATE

    The bill would be effective upon enactment.

                      III. VOTES OF THE COMMITTEE

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, the following statements are made 
concerning the votes of the Committee on its consideration of 
S. 971.
    S. 971 was ordered favorably reported to the House of 
Representatives by voice vote (with a quorum present).

                     IV. BUDGET EFFECTS OF THE BILL


               A. Committee Estimate of Budgetary Effects

    In compliance with clause 3(d) of rule XIII of the Rules of 
the House of Representatives, the following statement is made 
concerning the effects on the budget of the bill, S. 971, as 
reported. The Committee agrees with the estimate prepared by 
the Congressional Budget Office (CBO), which is included below.

B. Statement Regarding New Budget Authority and Tax Expenditures Budget 
                               Authority

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee states that the 
bill involves $30 million increase in budget authority. The 
Committee states further that the bill involves no new or 
increased tax expenditures.

      C. Cost Estimate Prepared by the Congressional Budget Office

    In compliance with clause 3(c)(3) of rule XIII of the Rules 
of the House of Representatives, requiring a cost estimate 
prepared by the CBO, the following statement by CBO is 
provided.

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, June 12, 2015.
Hon. Paul Ryan,
Chairman, Committee on Ways and Means,
House of Representatives, Washington, DC.
    Dear Chairman: The Congressional Budget Office has prepared 
the enclosed cost estimate for S. 971, the Medicare 
Independence at Home Medical Practice Demonstration Improvement 
Act of 2015.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Lori Housman.
            Sincerely,
                                                Keith Hall,
                                                          Director.
    Enclosure.

S. 971--Medicare Independence at Home Medical Practice Demonstration 
        Improvement Act of 2015

    S. 971 would allow agreements made with medical home 
practices to be extended to five years under the Medicare 
Independence at Home Medical Practice (IAH) demonstration 
program. Under current law, agreements under the demonstration 
program are for three years.
    The Patient Protection and Affordable Care Act of 2010 
established the IAH demonstration to test home-based primary 
care for Medicare beneficiaries with multiple chronic 
conditions. The demonstration limits the number of Medicare 
beneficiaries eligible to participate and establishes a limit 
on per capita spending for each medical practice based on fee-
for-service costs in the Medicare program. The bill would not 
expand the scope of the demonstration program or the number of 
participants, but would extend agreements with current 
providers for an additional two years. Based on the small 
number of participants and the spending targets established in 
the demonstration, CBO estimates that enacting S. 971 would 
have an insignificant effect on direct spending. Because S. 971 
would affect direct spending, pay-as-you-go procedures would 
apply. Enacting the bill would not affect revenues.
    S. 971 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would not affect the budgets of state, local, or tribal 
governments.
    The CBO staff contact for this estimate is Lori Housman. 
The estimate was approved by Holly Harvey, Deputy Assistant 
Director for Budget Analysis.

     V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE


          A. Committee Oversight Findings and Recommendations

    With respect to clause 3(c)(1) of rule XIII of the Rules of 
the House of Representatives (relating to oversight findings), 
the Committee advises that it was as a result of the 
Committee's review of the provisions of S. 971 that the 
Committee concluded that it is appropriate to report the bill, 
as amended, favorably to the House of Representatives with the 
recommendation that the bill do pass.

        B. Statement of General Performance Goals and Objectives

    With respect to clause 3(c)(4) of rule XIII of the Rules of 
the House of Representatives, the Committee advises that the 
bill contains no measure that authorizes funding, so no 
statement of general performance goals and objectives for which 
any measure authorizes funding is required.

              C. Information Relating to Unfunded Mandates

    This information is provided in accordance with section 423 
of the Unfunded Mandates Reform Act of 1995 (Pub. L. No. 104-
4).
    The Committee has determined that the bill does not contain 
Federal mandates on the private sector. The Committee has 
determined that the bill does not impose a Federal 
intergovernmental mandate on State, local, or tribal 
governments.

  D. Congressional Earmarks, Limited Tax Benefits, and Limited Tariff 
                                Benefits

    With respect to clause 9 of rule XXI of the Rules of the 
House of Representatives, the Committee has carefully reviewed 
the provisions of the bill, and states that the provisions of 
the bill do not contain any congressional earmarks, limited tax 
benefits, or limited tariff benefits within the meaning of the 
rule.

                   E. Duplication of Federal Programs

    In compliance with Sec. 3(g)(2) of H. Res. 5 (114th 
Congress), the Committee states that no provision of the bill 
establishes or reauthorizes: (1) a program of the Federal 
Government known to be duplicative of another Federal program; 
(2) a program included in any report from the Government 
Accountability Office to Congress pursuant to section 21 of 
Public Law 111-139; or (3) a program related to a program 
identified in the most recent Catalog of Federal Domestic 
Assistance, published pursuant to the Federal Program 
Information Act (Pub. L. No. 95-220, as amended by Pub. L. No. 
98-169).

                 F. Disclosure of Directed Rule Makings

    In compliance with Sec. 3(i) of H. Res. 5 (114th Congress), 
the following statement is made concerning directed rule 
makings: The Committee estimates that the bill requires no 
directed rule makings within the meaning of such section.

       VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED


  A. Text of Existing Law Amended or Repealed by the Bill, as Reported

    In compliance with clause 3(e)(1)(A) of rule XIII of the 
Rules of the House of Representatives, the text of each section 
proposed to be amended or repealed by the bill, as reported, is 
shown below:

                          SOCIAL SECURITY ACT



           *       *       *       *       *       *       *
TITLE XVIII--HEALTH INSURANCE FOR THE AGED AND DISABLED

           *       *       *       *       *       *       *


Part E--Miscellaneous Provisions

           *       *       *       *       *       *       *


      independence at home medical practice demonstration program

  Sec. 1866E. (a) Establishment.--
          (1) In general.--The Secretary shall conduct a 
        demonstration program (in this section referred to as 
        the ``demonstration program'') to test a payment 
        incentive and service delivery model that utilizes 
        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 under this title to applicable beneficiaries 
        (as defined in subsection (d)).
          (2) Requirement.--The demonstration program shall 
        test whether a model described in paragraph (1), which 
        is accountable for providing comprehensive, 
        coordinated, continuous, and accessible care to high-
        need populations at home and coordinating health care 
        across all treatment settings, results in--
                  (A) reducing preventable hospitalizations;
                  (B) preventing hospital readmissions;
                  (C) reducing emergency room visits;
                  (D) improving health outcomes commensurate 
                with the beneficiaries' stage of chronic 
                illness;
                  (E) improving the efficiency of care, such as 
                by reducing duplicative diagnostic and 
                laboratory tests;
                  (F) reducing the cost of health care services 
                covered under this title; and
                  (G) achieving beneficiary and family 
                caregiver satisfaction.
  (b) Independence at Home Medical Practice.--
          (1) Independence at home medical practice defined.--
        In this section:
                  (A) In general.--The term ``independence at 
                home medical practice'' means a legal entity 
                that--
                          (i) is comprised of an individual 
                        physician or nurse practitioner or 
                        group of physicians and nurse 
                        practitioners that provides care as 
                        part of a team that includes 
                        physicians, nurses, physician 
                        assistants, pharmacists, and other 
                        health and social services staff as 
                        appropriate who have experience 
                        providing home-based primary care to 
                        applicable beneficiaries, make in-home 
                        visits, and are available 24 hours per 
                        day, 7 days per week to carry out plans 
                        of care that are tailored to the 
                        individual beneficiary's chronic 
                        conditions and designed to achieve the 
                        results in subsection (a);
                          (ii) is organized at least in part 
                        for the purpose of providing 
                        physicians' services;
                          (iii) has documented experience in 
                        providing home-based primary care 
                        services to high-cost chronically ill 
                        beneficiaries, as determined 
                        appropriate by the Secretary;
                          (iv) furnishes services to at least 
                        200 applicable beneficiaries (as 
                        defined in subsection (d)) during each 
                        year of the demonstration program;
                          (v) has entered into an agreement 
                        with the Secretary;
                          (vi) uses electronic health 
                        information systems, remote monitoring, 
                        and mobile diagnostic technology; and
                          (vii) meets such other criteria as 
                        the Secretary determines to be 
                        appropriate to participate in the 
                        demonstration program.
                The entity shall report on quality measures (in 
                such form, manner, and frequency as specified 
                by the Secretary, which may be for the group, 
                for providers of services and suppliers, or 
                both) and report to the Secretary (in a form, 
                manner, and frequency as specified by the 
                Secretary) such data as the Secretary 
                determines appropriate to monitor and evaluate 
                the demonstration program.
                  (B) Physician.--The term ``physician'' 
                includes, except as the Secretary may otherwise 
                provide, any individual who furnishes services 
                for which payment may be made as physicians' 
                services and has the medical training or 
                experience to fulfill the physician's role 
                described in subparagraph (A)(i).
          (2) Participation of nurse practitioners and 
        physician assistants.--Nothing in this section shall be 
        construed to prevent a nurse practitioner or physician 
        assistant from participating in, or leading, a home-
        based primary care team as part of an independence at 
        home medical practice if--
                  (A) all the requirements of this section are 
                met;
                  (B) the nurse practitioner or physician 
                assistant, as the case may be, is acting 
                consistent with State law; and
                  (C) the nurse practitioner or physician 
                assistant has the medical training or 
                experience to fulfill the nurse practitioner or 
                physician assistant role described in paragraph 
                (1)(A)(i).
          (3) Inclusion of providers and practitioners.--
        Nothing in this subsection shall be construed as 
        preventing an independence at home medical practice 
        from including a provider of services or a 
        participating practitioner described in section 
        1842(b)(18)(C) that is affiliated with the practice 
        under an arrangement structured so that such provider 
        of services or practitioner participates in the 
        demonstration program and shares in any savings under 
        the demonstration program.
          (4) Quality and performance standards.--The Secretary 
        shall develop quality performance standards for 
        independence at home medical practices participating in 
        the demonstration program.
  (c) Payment Methodology.--
          (1) Establishment of target spending level.--The 
        Secretary shall establish an estimated annual spending 
        target, for the amount the Secretary estimates would 
        have been spent in the absence of the demonstration, 
        for items and services covered under parts A and B 
        furnished to applicable beneficiaries for each 
        qualifying independence at home medical practice under 
        this section. Such spending targets shall be determined 
        on a per capita basis. Such spending targets shall 
        include a risk corridor that takes into account normal 
        variation in expenditures for items and services 
        covered under parts A and B furnished to such 
        beneficiaries with the size of the corridor being 
        related to the number of applicable beneficiaries 
        furnished services by each independence at home medical 
        practice. The spending targets may also be adjusted for 
        other factors as the Secretary determines appropriate.
          (2) Incentive payments.--Subject to performance on 
        quality measures, a qualifying independence at home 
        medical practice is eligible to receive an incentive 
        payment under this section if actual expenditures for a 
        year for the applicable beneficiaries it enrolls are 
        less than the estimated spending target established 
        under paragraph (1) for such year. An incentive payment 
        for such year shall be equal to a portion (as 
        determined by the Secretary) of the amount by which 
        actual expenditures (including incentive payments under 
        this paragraph) for applicable beneficiaries under 
        parts A and B for such year are estimated to be less 
        than 5 percent less than the estimated spending target 
        for such year, as determined under paragraph (1).
  (d) Applicable Beneficiaries.--
          (1) Definition.--In this section, the term 
        ``applicable beneficiary'' means, with respect to a 
        qualifying independence at home medical practice, an 
        individual who the practice has determined--
                  (A) is entitled to benefits under part A and 
                enrolled for benefits under part B;
                  (B) is not enrolled in a Medicare Advantage 
                plan under part C or a PACE program under 
                section 1894;
                  (C) has 2 or more chronic illnesses, such as 
                congestive heart failure, diabetes, other 
                dementias designated by the Secretary, chronic 
                obstructive pulmonary disease, ischemic heart 
                disease, stroke, Alzheimer's Disease and 
                neurodegenerative diseases, and other diseases 
                and conditions designated by the Secretary 
                which result in high costs under this title;
                  (D) within the past 12 months has had a 
                nonelective hospital admission;
                  (E) within the past 12 months has received 
                acute or subacute rehabilitation services;
                  (F) has 2 or more functional dependencies 
                requiring the assistance of another person 
                (such as bathing, dressing, toileting, walking, 
                or feeding); and
                  (G) meets such other criteria as the 
                Secretary determines appropriate.
          (2) Patient election to participate.--The Secretary 
        shall determine an appropriate method of ensuring that 
        applicable beneficiaries have agreed to enroll in an 
        independence at home medical practice under the 
        demonstration program. Enrollment in the demonstration 
        program shall be voluntary.
          (3) Beneficiary access to services.--Nothing in this 
        section shall be construed as encouraging physicians or 
        nurse practitioners to limit applicable beneficiary 
        access to services covered under this title and 
        applicable beneficiaries shall not be required to 
        relinquish access to any benefit under this title as a 
        condition of receiving services from an independence at 
        home medical practice.
  (e) Implementation.--
          (1) Starting date.--The demonstration program shall 
        begin no later than January 1, 2012. An agreement with 
        an independence at home medical practice under the 
        demonstration program may cover not more than a 3-year 
        period.
          (2) No physician duplication in demonstration 
        participation.--The Secretary shall not pay an 
        independence at home medical practice under this 
        section that participates in section 1899.
          (3) No beneficiary duplication in demonstration 
        participation.--The Secretary shall ensure that no 
        applicable beneficiary enrolled in an independence at 
        home medical practice under this section is 
        participating in the programs under section 1899.
          (4) Preference.--In approving an independence at home 
        medical practice, the Secretary shall give preference 
        to practices that are--
                  (A) located in high-cost areas of the 
                country;
                  (B) have experience in furnishing health care 
                services to applicable beneficiaries in the 
                home; and
                  (C) use electronic medical records, health 
                information technology, and individualized 
                plans of care.
          (5) Limitation on number of practices.--In selecting 
        qualified independence at home medical practices to 
        participate under the demonstration program, the 
        Secretary shall limit the number of such practices so 
        that the number of applicable beneficiaries that may 
        participate in the demonstration program does not 
        exceed 10,000.
          (6) Waiver.--The Secretary may waive such provisions 
        of this title and title XI as the Secretary determines 
        necessary in order to implement the demonstration 
        program.
          (7) Administration.--Chapter 35 of title 44, United 
        States Code, shall not apply to this section.
  (f) Evaluation and Monitoring.--
          (1) In general.--The Secretary shall evaluate each 
        independence at home medical practice under the 
        demonstration program to assess whether the practice 
        achieved the results described in subsection (a).
          (2) Monitoring applicable beneficiaries.--The 
        Secretary may monitor data on expenditures and quality 
        of services under this title after an applicable 
        beneficiary discontinues receiving services under this 
        title through a qualifying independence at home medical 
        practice.
  (g) Reports to Congress.--The Secretary shall conduct an 
independent evaluation of the demonstration program and submit 
to Congress a final report, including best practices under the 
demonstration program. Such report shall include an analysis of 
the demonstration program on coordination of care, expenditures 
under this title, applicable beneficiary access to services, 
and the quality of health care services provided to applicable 
beneficiaries.
  (h) Funding.--For purposes of administering and carrying out 
the demonstration program, other than for payments for items 
and services furnished under this title and incentive payments 
under subsection (c), in addition to funds otherwise 
appropriated, there shall be transferred to the Secretary for 
the Center for Medicare & Medicaid Services Program Management 
Account from the Federal Hospital Insurance Trust Fund under 
section 1817 and the Federal Supplementary Medical Insurance 
Trust Fund under section 1841 (in proportions determined 
appropriate by the Secretary) $5,000,000 for each of fiscal 
years 2010 through 2015. Amounts transferred under this 
subsection for a fiscal year shall be available until expended.
  (i) Termination.--
          (1) Mandatory termination.--The Secretary shall 
        terminate an agreement with an independence at home 
        medical practice if--
                  (A) the Secretary estimates or determines 
                that such practice will not receive an 
                incentive payment for the second of 2 
                consecutive years under the demonstration 
                program; or
                  (B) such practice fails to meet quality 
                standards during any year of the demonstration 
                program.
          (2) Permissive termination.--The Secretary may 
        terminate an agreement with an independence at home 
        medical practice for such other reasons determined 
        appropriate by the Secretary.

           *       *       *       *       *       *       *


      B. Changes in Existing Law Proposed by the Bill, as Reported

    In compliance with clause 3(e)(1)(B) of rule XIII of the 
Rules of the House of Representatives, changes in existing law 
proposed by the bill, as reported, are shown as follows 
(existing law proposed to be omitted is enclosed in black 
brackets, new matter is printed in italic, existing law in 
which no change is proposed is shown in roman):

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e)(1)(B) of rule XIII of the 
Rules of the House of Representatives, changes in existing law 
made by the bill, as reported, are shown as follows (existing 
law proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, and existing law in which no 
change is proposed is shown in roman):

                          SOCIAL SECURITY ACT



           *       *       *       *       *       *       *
TITLE XVIII--HEALTH INSURANCE FOR THE AGED AND DISABLED

           *       *       *       *       *       *       *


Part E--Miscellaneous Provisions

           *       *       *       *       *       *       *


      independence at home medical practice demonstration program

  Sec. 1866E. (a) Establishment.--
          (1) In general.--The Secretary shall conduct a 
        demonstration program (in this section referred to as 
        the ``demonstration program'') to test a payment 
        incentive and service delivery model that utilizes 
        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 under this title to applicable beneficiaries 
        (as defined in subsection (d)).
          (2) Requirement.--The demonstration program shall 
        test whether a model described in paragraph (1), which 
        is accountable for providing comprehensive, 
        coordinated, continuous, and accessible care to high-
        need populations at home and coordinating health care 
        across all treatment settings, results in--
                  (A) reducing preventable hospitalizations;
                  (B) preventing hospital readmissions;
                  (C) reducing emergency room visits;
                  (D) improving health outcomes commensurate 
                with the beneficiaries' stage of chronic 
                illness;
                  (E) improving the efficiency of care, such as 
                by reducing duplicative diagnostic and 
                laboratory tests;
                  (F) reducing the cost of health care services 
                covered under this title; and
                  (G) achieving beneficiary and family 
                caregiver satisfaction.
  (b) Independence at Home Medical Practice.--
          (1) Independence at home medical practice defined.--
        In this section:
                  (A) In general.--The term ``independence at 
                home medical practice'' means a legal entity 
                that--
                          (i) is comprised of an individual 
                        physician or nurse practitioner or 
                        group of physicians and nurse 
                        practitioners that provides care as 
                        part of a team that includes 
                        physicians, nurses, physician 
                        assistants, pharmacists, and other 
                        health and social services staff as 
                        appropriate who have experience 
                        providing home-based primary care to 
                        applicable beneficiaries, make in-home 
                        visits, and are available 24 hours per 
                        day, 7 days per week to carry out plans 
                        of care that are tailored to the 
                        individual beneficiary's chronic 
                        conditions and designed to achieve the 
                        results in subsection (a);
                          (ii) is organized at least in part 
                        for the purpose of providing 
                        physicians' services;
                          (iii) has documented experience in 
                        providing home-based primary care 
                        services to high-cost chronically ill 
                        beneficiaries, as determined 
                        appropriate by the Secretary;
                          (iv) furnishes services to at least 
                        200 applicable beneficiaries (as 
                        defined in subsection (d)) during each 
                        year of the demonstration program;
                          (v) has entered into an agreement 
                        with the Secretary;
                          (vi) uses electronic health 
                        information systems, remote monitoring, 
                        and mobile diagnostic technology; and
                          (vii) meets such other criteria as 
                        the Secretary determines to be 
                        appropriate to participate in the 
                        demonstration program.
                The entity shall report on quality measures (in 
                such form, manner, and frequency as specified 
                by the Secretary, which may be for the group, 
                for providers of services and suppliers, or 
                both) and report to the Secretary (in a form, 
                manner, and frequency as specified by the 
                Secretary) such data as the Secretary 
                determines appropriate to monitor and evaluate 
                the demonstration program.
                  (B) Physician.--The term ``physician'' 
                includes, except as the Secretary may otherwise 
                provide, any individual who furnishes services 
                for which payment may be made as physicians' 
                services and has the medical training or 
                experience to fulfill the physician's role 
                described in subparagraph (A)(i).
          (2) Participation of nurse practitioners and 
        physician assistants.--Nothing in this section shall be 
        construed to prevent a nurse practitioner or physician 
        assistant from participating in, or leading, a home-
        based primary care team as part of an independence at 
        home medical practice if--
                  (A) all the requirements of this section are 
                met;
                  (B) the nurse practitioner or physician 
                assistant, as the case may be, is acting 
                consistent with State law; and
                  (C) the nurse practitioner or physician 
                assistant has the medical training or 
                experience to fulfill the nurse practitioner or 
                physician assistant role described in paragraph 
                (1)(A)(i).
          (3) Inclusion of providers and practitioners.--
        Nothing in this subsection shall be construed as 
        preventing an independence at home medical practice 
        from including a provider of services or a 
        participating practitioner described in section 
        1842(b)(18)(C) that is affiliated with the practice 
        under an arrangement structured so that such provider 
        of services or practitioner participates in the 
        demonstration program and shares in any savings under 
        the demonstration program.
          (4) Quality and performance standards.--The Secretary 
        shall develop quality performance standards for 
        independence at home medical practices participating in 
        the demonstration program.
  (c) Payment Methodology.--
          (1) Establishment of target spending level.--The 
        Secretary shall establish an estimated annual spending 
        target, for the amount the Secretary estimates would 
        have been spent in the absence of the demonstration, 
        for items and services covered under parts A and B 
        furnished to applicable beneficiaries for each 
        qualifying independence at home medical practice under 
        this section. Such spending targets shall be determined 
        on a per capita basis. Such spending targets shall 
        include a risk corridor that takes into account normal 
        variation in expenditures for items and services 
        covered under parts A and B furnished to such 
        beneficiaries with the size of the corridor being 
        related to the number of applicable beneficiaries 
        furnished services by each independence at home medical 
        practice. The spending targets may also be adjusted for 
        other factors as the Secretary determines appropriate.
          (2) Incentive payments.--Subject to performance on 
        quality measures, a qualifying independence at home 
        medical practice is eligible to receive an incentive 
        payment under this section if actual expenditures for a 
        year for the applicable beneficiaries it enrolls are 
        less than the estimated spending target established 
        under paragraph (1) for such year. An incentive payment 
        for such year shall be equal to a portion (as 
        determined by the Secretary) of the amount by which 
        actual expenditures (including incentive payments under 
        this paragraph) for applicable beneficiaries under 
        parts A and B for such year are estimated to be less 
        than 5 percent less than the estimated spending target 
        for such year, as determined under paragraph (1).
  (d) Applicable Beneficiaries.--
          (1) Definition.--In this section, the term 
        ``applicable beneficiary'' means, with respect to a 
        qualifying independence at home medical practice, an 
        individual who the practice has determined--
                  (A) is entitled to benefits under part A and 
                enrolled for benefits under part B;
                  (B) is not enrolled in a Medicare Advantage 
                plan under part C or a PACE program under 
                section 1894;
                  (C) has 2 or more chronic illnesses, such as 
                congestive heart failure, diabetes, other 
                dementias designated by the Secretary, chronic 
                obstructive pulmonary disease, ischemic heart 
                disease, stroke, Alzheimer's Disease and 
                neurodegenerative diseases, and other diseases 
                and conditions designated by the Secretary 
                which result in high costs under this title;
                  (D) within the past 12 months has had a 
                nonelective hospital admission;
                  (E) within the past 12 months has received 
                acute or subacute rehabilitation services;
                  (F) has 2 or more functional dependencies 
                requiring the assistance of another person 
                (such as bathing, dressing, toileting, walking, 
                or feeding); and
                  (G) meets such other criteria as the 
                Secretary determines appropriate.
          (2) Patient election to participate.--The Secretary 
        shall determine an appropriate method of ensuring that 
        applicable beneficiaries have agreed to enroll in an 
        independence at home medical practice under the 
        demonstration program. Enrollment in the demonstration 
        program shall be voluntary.
          (3) Beneficiary access to services.--Nothing in this 
        section shall be construed as encouraging physicians or 
        nurse practitioners to limit applicable beneficiary 
        access to services covered under this title and 
        applicable beneficiaries shall not be required to 
        relinquish access to any benefit under this title as a 
        condition of receiving services from an independence at 
        home medical practice.
  (e) Implementation.--
          (1) Starting date.--The demonstration program shall 
        begin no later than January 1, 2012. An agreement with 
        an independence at home medical practice under the 
        demonstration program may cover not more than a [3-
        year] 5-year period.
          (2) No physician duplication in demonstration 
        participation.--The Secretary shall not pay an 
        independence at home medical practice under this 
        section that participates in section 1899.
          (3) No beneficiary duplication in demonstration 
        participation.--The Secretary shall ensure that no 
        applicable beneficiary enrolled in an independence at 
        home medical practice under this section is 
        participating in the programs under section 1899.
          (4) Preference.--In approving an independence at home 
        medical practice, the Secretary shall give preference 
        to practices that are--
                  (A) located in high-cost areas of the 
                country;
                  (B) have experience in furnishing health care 
                services to applicable beneficiaries in the 
                home; and
                  (C) use electronic medical records, health 
                information technology, and individualized 
                plans of care.
          (5) Limitation on number of practices.--In selecting 
        qualified independence at home medical practices to 
        participate under the demonstration program, the 
        Secretary shall limit the number of such practices so 
        that the number of applicable beneficiaries that may 
        participate in the demonstration program does not 
        exceed 10,000.
          (6) Waiver.--The Secretary may waive such provisions 
        of this title and title XI as the Secretary determines 
        necessary in order to implement the demonstration 
        program.
          (7) Administration.--Chapter 35 of title 44, United 
        States Code, shall not apply to this section.
  (f) Evaluation and Monitoring.--
          (1) In general.--The Secretary shall evaluate each 
        independence at home medical practice under the 
        demonstration program to assess whether the practice 
        achieved the results described in subsection (a).
          (2) Monitoring applicable beneficiaries.--The 
        Secretary may monitor data on expenditures and quality 
        of services under this title after an applicable 
        beneficiary discontinues receiving services under this 
        title through a qualifying independence at home medical 
        practice.
  (g) Reports to Congress.--The Secretary shall conduct an 
independent evaluation of the demonstration program and submit 
to Congress a final report, including best practices under the 
demonstration program. Such report shall include an analysis of 
the demonstration program on coordination of care, expenditures 
under this title, applicable beneficiary access to services, 
and the quality of health care services provided to applicable 
beneficiaries.
  (h) Funding.--For purposes of administering and carrying out 
the demonstration program, other than for payments for items 
and services furnished under this title and incentive payments 
under subsection (c), in addition to funds otherwise 
appropriated, there shall be transferred to the Secretary for 
the Center for Medicare & Medicaid Services Program Management 
Account from the Federal Hospital Insurance Trust Fund under 
section 1817 and the Federal Supplementary Medical Insurance 
Trust Fund under section 1841 (in proportions determined 
appropriate by the Secretary) $5,000,000 for each of fiscal 
years 2010 through 2015. Amounts transferred under this 
subsection for a fiscal year shall be available until expended.
  (i) Termination.--
          (1) Mandatory termination.--The Secretary shall 
        terminate an agreement with an independence at home 
        medical practice if--
                  (A) the Secretary estimates or determines 
                that such practice will not receive an 
                incentive payment for the second of 2 
                consecutive years under the demonstration 
                program; or
                  (B) such practice fails to meet quality 
                standards during any year of the demonstration 
                program.
          (2) Permissive termination.--The Secretary may 
        terminate an agreement with an independence at home 
        medical practice for such other reasons determined 
        appropriate by the Secretary.

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