,i  #aacth ,,congress  #b;d ,session    
,h4 ,r4 #dfgc  ,,in ,,the ,,house ,,of  
,,representatives  ,may #ai1 #bjad ,mr4 
,mc,kinley 7for himself and ,mr4 ,price 
of ,georgia7 introduced the following   
bill2 which was referred to the         
,committee on ,ways and ,means1 and in  
addition to the ,committee on ,energy   
and ,commerce1 for a period to be       
subsequently determined by the ,speaker1
 in each case for consideration of such 
provisions as fall within the           
jurisdiction of the committee concerned 
,a ,,bill  ,to amend title ,,xviii of   
the ,social ,security ,act to provide   
bundled payments for post-acute care    
services under parts ,a and ,b of       
,medicare1 and for other purposes4  #a4 
,short title ,this ,act may be cited as 
the ,bundling and ,coordinating         
,post-,acute ,care ,act of #bjad and as 
the ,,bacpac ,act of #bjad4  #b4        
,purposes ,the purposes of this ,act are
 to--  7#a7 foster the delivery of      
high-quality post-acute care services in

 the most cost-effective manner         
possible2  7#b7 preserve the ability of 
patients1 with the guidance of their    
physicians1 to select their preferred   
providers of post-acute care services2  
7#c7 promote competition among          
post-acute care providers on the basis  
of quality1 cost1 accountability1 and   
customer service2  7#d7 achieve         
long-term sustainability by ensuring    
operational stability through regional  
breadth and the engagement of           
experienced care ,,pac coordinators2    
7#e7 advance innovation in fields       
including telehealth1 care coordination1
 medication management1 and             
hospitalization avoidance2 and  7#f7    
provide for the financial security of   
the ,medicare program by achieving      
substantial program savings through     
maximized efficiencies1 cost avoidance1 
and outcomes improvement4  #c4          
,providing bundled payments for         
post-acute care services under parts ,a 
and ,b of ,medicare  ,title ,,xviii of  

the ,social ,security ,act is amended by
 inserting after section #ahff;,e 7#db  
,u4,s4,c4 #acie;cc-#e7 the following new
 section3  #ahff;,f4 ,providing bundled 
payments for post-acute care services   
7a7 ,in general ,for a ,,pac bundle with
 respect to qualifying discharges       
occurring on or after ,january #a1      
#bjaf1 instead of the payment otherwise 
provided under parts ,a and ,b1 there   
shall be paid a single payment amount   
7determined under subsection 7d7 and as 
limited under paragraph 7#d7 of such    
subsection7 to be paid to a ,,pac       
coordinator 7as described in subsection 
7c77 selected by an individual under    
such subsection4  7b7 ,,pac-,related    
definitions ,in this section3  7#a7     
,,pac bundle ,the term ,,pac bundle     
means ,,pac services furnished to an    
individual during a ,,pac period in a   
,,pac area4  7#b7 ,,pac services  7,a7  
,in general ,the term ,,pac services    
includes--  7i7 post-hospital extended  
care services1 subject to subparagraph  

7,c77i72  7ii7 home health services1    
subject to subparagraph 7,c77ii72  7iii7
 inpatient services provided in a       
rehabilitation facility1 subject to     
subparagraph 7,c77iii72  7iv7 inpatient 
hospital services provided by a         
long-term care hospital1 subject to     
subparagraph 7,c77iv72  7v7 durable     
medical equipment2  7vi7 outpatient     
prescription drugs and biologicals2 and 
7vii7 skilled nursing facility services4
  7,b7 ,exceptions ,such term does not  
include--  7i7 physicians' services2    
7ii7 hospice care2  7iii7 outpatient    
hospital services2  7iv7 ambulance      
services2  7v7 outpatient physical      
therapy services2  7vi7 outpatient      
occupational therapy services2  7vii7   
outpatient speech-language pathology    
services2 and  7viii7 the items and     
services described in section           
#ahfa7s77#i74  7,c7 ,nonapplication of  
certain coverage limitations  7i7       
,waiver of skilled nursing facility     
three-day stay requirement ,in applying 

subparagraph 7,a77i71 the #c-;day stay  
requirement described in section        
#ahfa7;i7 7requiring that an            
individual's inpatient stay in a        
discharging hospital be for a duration  
of not less than #c consecutive days7   
shall not apply4  7ii7 ,waiver of       
homebound requirement for home health   
services ,in applying subparagraph      
7,a77ii71 the requirements cited in     
sections #ahad7;a77#b77;,c7 and         
#ahce7;a77#b77;,a7 that home health     
services are or were required because   
the individual is or was confined to the
 home of the individual shall not apply4
  7iii7 ,nonapplication of              
rehabilitation facility percentage      
requirement ,in applying subparagraph   
7,a77iii71 any requirement that a       
specified percentage of the inpatient   
population served by the facility       
require intensive rehabilitation        
services for treatment of one or more of
 the conditions specified in section    
#dab4bi7;b77#b7 of title #db1 ,code of  

,federal ,regulations1 as of ,december  
#ai1 #bjac1 shall not apply4  7iv7      
,nonapplication of long-term care       
hospital percentage requirement ,in     
applying subparagraph 7,a77iv71 any     
requirement that a specified percentage 
of the discharged ,medicare inpatient   
population of the long-term care        
hospital or its satellite facility be   
admitted to the hospital or its         
satellite facility from its co-located  
hospital shall not apply4  7#c7 ,,pac   
period ,the term ,,pac period means the 
period beginning on the date of a       
qualifying discharge 7as defined in     
paragraph 7#aj77 and ending on the date 
that is the earlier of the following3   
7,a7 ,the date that is #ij days after   
the date of such discharge4  7,b7 ,the  
date on which the individual is admitted
 to a hospital for purposes of receiving
 services for a condition that is not   
related to the condition for which the  
individual received the acute care      
inpatient hospital services described in

 paragraph 7#aj77;,a74  7#d7 ,,pac area 
,the term ,,pac area means an area with 
respect to which a ,,pac coordinator has
 a ,,pac agreement in effect under      
subsection 7c77#a77;,b74  7#e7 ,,pac    
physician ,the term ,,pac physician     
means1 with respect to an individual    
receiving a ,,pac bundle1 the physician 
who has primary responsibility with     
respect to supervising the delivery of  
services during the course of a ,,pac   
period4  7#f7 ,,pac provider ,the term  
,,pac provider means1 with respect to   
,,pac services1 the provider of services
 or supplier furnishing such services4  
7#g7 ,,pac network agreement ,the term  
,,pac network agreement means1 in the   
case that an individual has selected a  
,,pac coordinator under subsection      
7c77#d77;,a7 for the furnishing of ,,pac
 services1 an agreement of a ,,pac      
coordinator with one or more ,,pac      
providers to provide such services to   
such individual4  7#h7 ,,pac readmission
 ,the term ,,pac readmission means1 with

 respect to an individual receiving a   
,,pac bundle1 the individual's admission
 to a hospital within #ij days of the   
date of the qualifying discharge of the 
individual1 for purposes of receiving   
services for a condition that is related
 to the condition for which the         
individual received the acute care      
inpatient hospital services described in
 paragraph 7#aj77;,a74  7#i7 ,,pac      
assessment tool ,the term ,,pac         
assessment tool means the ,continuity   
,assessment ,record and ,evaluation     
7,,care7 tool 7or such equivalent       
assessment tool as the ,secretary may   
specify74  7#aj7 ,qualifying discharge  
,subject to subsection 7e71 the term    
qualifying discharge means a discharge  
after receiving acute care inpatient    
hospital services 7as defined by the    
,secretary7 in a subsection 7d7 hospital
 7as defined in section                 
#ahhf7;d77#a77;,b77 for which the       
discharge plan includes the furnishing  
of ,,pac services4  7#aa7 ,,crg ,the    

term ,,crg means a condition-related    
group established under subsection      
7d77#a74  7c7 ,,pac coordinators  7#a7  
,in general ,in this section1 the term  
,,pac coordinator means an entity 7such 
as a hospital1 health insurance issuer1 
third-party benefit manager1 or ,,pac   
provider7 that--  7,a7 is certified1    
under a process established by the      
,secretary1 as meeting appropriate      
requirements specified by the           
,secretary1 including the requirements  
specified in paragraph 7#b72 and  7,b7  
has entered into and has in effect a    
,,pac agreement with the ,secretary     
described in paragraph 7#c74  7#b7      
,requirements ,the requirements         
specified in this paragraph1 with       
respect to an entity serving a ,,pac    
area1 are the following3  7,a7          
,financial solvency ,the entity has the 
capacity1 and provides sufficient       
assurances of solvency1 to bear         
financial risk as a ,,pac coordinator   
under this section4  7,b7 ,capacity to  

manage care and funding ,the entity has 
the capability to manage the care and   
funding for ,,pac services in such area4
  7,c7 ,,pac network agreements  7i7    
,network capacity to serve ,,pac area   
,the entity has entered into ,,pac      
network agreements with one or more     
,,pac providers in a ,,pac area in a    
manner sufficient to ensure the         
availability of ,,pac services for      
individuals residing in the area who    
select the entity for the furnishing of 
,,pac services4  7ii7 ,limitation on    
balance billing ,such a ,,pac network   
agreement shall provide that the ,,pac  
provider shall accept as payment in full
 for ,,pac services furnished by such   
,,pac provider the applicable amount    
described in paragraph 7#c77;,c74  7iii7
 ,quality assurance ,such a ,,pac       
network agreement shall provide that the
 ,,pac provider shall have in effect a  
written plan of quality assurance and   
improvement1 and procedures implementing
 such plan1 that meet such quality      

standards as the ,secretary may specify4
  7,d7 ,credit-worthiness ,the entity   
has demonstrated credit-worthiness4     
7,e7 ,medical director ,the entity      
employs or contracts with a medical     
director who has an appropriate medical 
background4  7#c7 ,terms of ,,pac       
agreement ,the ,,pac agreement described
 in this paragraph between an entity and
 the ,secretary shall1 with respect to  
the ,,pac area specified under          
subparagraph 7,b71 have such terms and  
conditions as are specified by the      
,secretary consistent with this section 
and shall include the following3  7,a7  
,care coordination ,with respect to an  
individual who selects the entity under 
paragraph 7#d77;,a7--  7i7 the entity   
shall select one or more ,,pac providers
 in such area to furnish1 directly or   
indirectly1 clinically appropriate ,,pac
 services 7as determined through the use
 of the ,,pac assessment tool7 to the   
individual2 and  7ii7 the entity shall  
coordinate the furnishing of all such   

services for the individual4  7,b7 ,,pac
 area covered ,the ,,pac agreement shall
 specify the ,,pac area under the ,,pac 
agreement4  7,c7 ,payment amount for    
,,pac services ,for ,,pac services      
furnished by a ,,pac provider and       
furnished with respect to a qualifying  
discharge that occurs--  7i7 before     
,january #a1 #bjai1 the entity shall pay
 the ,,pac provider under the ,,pac     
network agreement between the entity and
 the ,,pac provider--  7,i7 with respect
 to such ,,pac services that are        
services for which the ,,pac provider   
would receive payment under this title  
without regard to this section1 an      
amount that is not less than the amount 
that would otherwise be paid to such    
,,pac provider under this title for such
 services2 and  7,,ii7 with respect to  
such ,,pac services that are services   
for which the ,,pac provider would not  
receive payment under this title without
 regard to this section1 an amount      
specified under such ,,pac network      

agreement2 and  7ii7 on or after        
,january #a1 #bjai1 the entity shall pay
 the ,,pac provider under such ,,pac    
network agreement an amount specified   
under such agreement4  7,d7             
,distribution of savings ,insofar as the
 payment amount to a ,,pac coordinator  
under subsection 7d77#c7 for a ,,pac    
bundle furnished to an individual is    
greater than the aggregate amounts paid 
to ,,pac providers under subparagraph   
7,c7 for such bundle for such           
individual1 the entity shall not retain 
an amount greater than #gj percent of   
such savings and shall pay an amount    
equivalent to--  7i7 not less than #aj  
percent of such savings to such ,,pac   
providers2  7ii7 not less than #aj      
percent of such savings to the ,,pac    
physician of the individual2 and  7iii7 
in the case that there is no ,,pac      
readmission of the individual1 not less 
than #aj percent of such savings to the 
hospital discharging the individual     
immediately prior to the furnishing of  

such services4  ,payments shall be made 
under each of clauses 7i71 7ii71 and    
7iii7 to individuals and entities       
independent of whether payment may be   
made to such an individual or entity    
under another such clause4  7,e7        
,maintenance of advisory committee ,the 
entity shall maintain an advisory       
committee of ,,pac providers and of     
patient stakeholders to advise the      
entity regarding its activities under   
this section4  7#d7 ,selection and      
change of selection of ,,pac            
coordinators by individual  7,a7 ,in    
general ,the ,secretary shall establish 
a process for the selection and change  
of selection of a ,,pac coordinator by  
an individual who is receiving inpatient
 hospital services and whose discharge  
has been or is likely to be classified  
as a qualifying discharge4  7,b7        
,limitation on selection due to network 
adequacy ,the process established under 
subparagraph 7,a7 may not allow an      
individual to select 7or to change a    

selection to7 a ,,pac coordinator in a  
,,pac area unless the ,,pac coordinator 
has entered into ,,pac network          
agreements with such ,,pac providers in 
such ,,pac area such that the ,,pac     
coordinator has a sufficient number and 
range of health care professionals and  
providers willing to provide services   
under the terms of the ,,pac agreement4 
7#e7 ,construction relating to ,,pac    
coordinators offering non-,,pac services
 ,nothing in this section shall be      
construed as prohibiting ,,pac providers
 from offering1 either directly or      
indirectly1 services that contribute to 
patient care1 safety1 and readmission   
avoidance 7such as medication           
management1 telehealth technologies1    
home environment services1 and          
transportation services7 that are not   
,,pac services4  7#f7 ,construction     
regarding flexibility in the delivery of
 ,,pac services ,nothing in this section
 shall be construed to prevent a ,,pac  
network agreement from permitting a     

,,pac provider to subcontract for the   
furnishing of ,,pac services that the   
,,pac provider is otherwise obligated to
 provide under the agreement so long as 
the subcontractor meets the same terms  
and conditions in furnishing such       
services as would apply if the ,,pac    
provider were to provide such services4 
7d7 ,payment amounts  7#a7              
,classification of conditions by        
,c,r,gs2 methodology for classification 
,the ,secretary shall establish a       
classification of the conditions of     
individuals receiving a ,,pac bundle by 
,,crg and a methodology for classifying 
specific ,,pac bundles within these     
groups4 ,the methodology shall1 to the  
extent feasible1 classify such bundles  
through the use of the ,,pac assessment 
tool4  7#b7 ,computation of base rate   
7,a7 ,in general ,the ,secretary shall  
compute an average payment rate for     
,,pac bundles classified in each ,,crg  
and furnished during a ,,pac period     
ending in the base year selected under  

subparagraph 7,b74  7,b7 ,base year     
selection ,the ,secretary shall select  
as a base year the most recent year     
ending before the date of the enactment 
of this section for which data are      
available to carry out this section4    
7,c7 ,budget-neutral computation ,the   
average payment rate for a ,,pac bundle 
classified in a ,,crg shall be computed 
in a manner so that1 if it had been     
applied in the base year1 the aggregate 
payments for ,,pac bundles classified in
 such ,,crg and furnished during a ,,pac
 period ending in such year would be    
equivalent to the aggregate payments    
under this title for such bundles4  7#c7
 ,calculation of payment amount based on
 base rate ,subject to the succeeding   
provisions of this subsection1 the      
amount of the single payment described  
in this paragraph1 with respect to a    
,,pac bundle classified within a ,,crg  
and furnished to an individual during a 
,,pac period ending--  7,a7 in #bjaf1 is
 the base average payment rate for such 

bundle computed under paragraph 7#b71   
increased by such percentage as the     
,secretary estimates is the average rate
 of increase in payments under this     
title for such bundle between the base  
year and #bjaf2 and  7,b7 in a          
subsequent year1 is the amount of the   
single payment for such bundle computed 
under this paragraph for the previous   
year1 increased by a percentage         
specified by the ,secretary consistent  
with paragraph 7#d74  7#d7 ,calculation 
of annual percentage increase ,in       
calculating the percentage increases    
applied under paragraph 7#c77;,b71 the  
,secretary shall ensure that total      
expenditures for all ,,pac bundles      
provided in accordance with this section
 do not exceed #if percent of the       
applicable baseline over the            
#h-;fiscal-year period beginning with   
fiscal year #bjaf4  7#e7 ,adjustment for
 readmissions during ,,pac period ,the  
amount paid to a ,,pac coordinator under
 this subsection for a ,,pac bundle in a

 ,,pac period that includes a ,,pac     
readmission shall be reduced by an      
amount equal to the aggregate amount of 
payments made for such ,,pac readmission
 of such individual4  7#f7 ,adjustment  
for geographic and risk factors ,the    
,secretary shall adjust the amount of   
payment described in paragraph 7#c7 with
 respect to services furnished to an    
individual in a ,,pac area in a         
budget-neutral manner for a year--  7,a7
 by an appropriate factor that reflects 
variations in costs for the furnishing  
of ,,pac bundles among different        
geographic areas2  7,b7 by an           
appropriate factor that accounts for    
variations in costs for the furnishing  
of such ,,pac services to the individual
 based upon the health status of the    
individual2 and  7,c7 by an amount that 
accounts for historical local 7hospital 
referral cluster7 pricing4  7#g7        
,adjustment in case of change of        
selection by individual ,in the case of 
a change of selection of ,,pac          

coordinator by the individual under     
subsection 7c77#d7 during a ,,pac       
period1 the ,secretary shall adjust the 
amount of payment described in paragraph
 7#c7 in order to provide appropriate   
partial payments to be paid to the ,,pac
 coordinator selected initially by the  
individual and to the ,,pac coordinator 
selected under the change of selection  
by the individual4 ,the method of       
calculating the respective amounts of   
such appropriate partial payments shall 
be based on the method used for the     
,home ,health ,partial ,episode ,payment
 adjustment4  7#h7 ,use of ,,pac        
assessment tool for purposes of         
adjustment for risk factors ,in         
determining an appropriate factor under 
paragraph 7#f77;,b7 with respect to an  
individual1 the ,secretary shall take   
into account an assessment of the       
individual conducted using the ,,pac    
assessment tool4  7e7 ,phase-,in  7#a7  
,determination of ,,pac expenditures by 
,,crg ,based on the most recent data    

available1 the ,secretary shall         
determine the aggregate amount of       
expenditures under this title for ,,pac 
services furnished during the ,,pac     
period for each ,,crg 7as defined in    
paragraph 7b77#aa774  7#b7 ,ranking of  
,c,r,gs by volume of expenditure ,the   
,secretary shall rank the ,c,r,gs in    
order based on the aggregate amount of  
expenditures for ,,pac services         
described in clause 7i7 for each ,,crg4 
7#c7 ,grouping of ,c,r,gs ,the          
,secretary shall group ,c,r,gs into four
 groups as follows3  7,a7 ,first group  
,the first group consists of the ,c,r,gs
 that have the highest rank under clause
 7ii7 and that collectively account for 
#be percent of the aggregate amount of  
expenditures for ,,pac services         
described in clause 7i74  7,b7 ,second  
group ,the second group consists of the 
,c,r,gs that have the next highest rank 
under clause 7ii7 after the first group 
in subclause 7,i7 and that collectively 
account for #be percent of the aggregate

 amount of expenditures for ,,pac       
services described in clause 7i74  7,c7 
,third group ,the third group consists  
of the ,c,r,gs that have the next       
highest rank under clause 7ii7 after the
 second group in subclause 7,,ii7 and   
that collectively account for #be       
percent of the aggregate amount of      
expenditures for ,,pac services         
described in clause 7i74  7,d7 ,fourth  
group ,the fourth group consists of the 
,c,r,gs that are not included in the    
first1 second1 or third group under this
 clause4  7#d7 ,phase-in by ,,crg       
grouping ,in applying this section for  
discharges in--  7,a7 #bjaf1 only       
discharges that are classified within   
the first group under subclause 7,i7 of 
clause 7iii7 shall be included2  7,b7   
#bjag1 only discharges that are         
classified within the first or second   
group under subclause 7,i7 or 7,,ii7 of 
clause 7iii7 shall be included2  7,c7   
#bjah1 only discharges that are         
classified within the first1 second1 or 

third group under subclause 7,i71       
7,,ii71 or 7,,iii7 of clause 7iii7 shall
 be included2 and  7,d7 #bjai and       
subsequent years1 discharges that are   
classified within any group of ,c,r,gs  
shall be included4  4  #d4 ,transitional
 care management payments for physicians
 ,for purposes of encouraging           
transitional care management by ,,pac   
physicians 7as defined in section       
#ahff;,f7b77#e7 of the ,social ,security
 ,act71 in carrying out section         
#ahdh7;e7 of the ,social ,security ,act 
7#db ,u4,s4,c4 #aciew-#d7;e771 the      
,secretary of ,health and ,human        
,services shall establish a new         
,transitional ,care ,management 7,,tcm7 
code to pay for care management by such 
a ,,pac physician or revise and expand  
the use of existing ,,tcm codes #iidie  
and #iidid4