1. Medicare demonstration program on the use of third-party interest-free payment arrangements to reduce Medicare hospital part A bad debt claims (a) In general The Secretary of Health and Human Services (in this section referred to as the Secretary ) shall establish a 3-year demonstration program (in this section referred to as the demonstration program ) in 5 States to determine the impact on patient engagement and satisfaction, health outcomes, and claims for Medicare hospital part A bad debt (as defined in subsection (d)(2)) of hospitals’ implementing third-party interest-free payment arrangements (as defined in subsection (b)). (b) Third-Party interest-Free payment arrangement defined In this section, the term third-party interest-free payment arrangement means, with respect to a hospital and individuals who are receiving inpatient hospital services for which payment may be made under part A of title XVIII of the Social Security Act, an arrangement between the hospital, a third-party, and such individuals under which— (1) the hospital offers to all such individuals the option of making payment of Medicare part A cost-sharing under such an arrangement for such services rather than through the routine billing process for such cost-sharing; (2) in the case of any such individual who agrees to such offer, the hospital assigns to the third party the rights of collection for such Medicare part A cost-sharing from such individual and efforts for such collection by the third party pursuant to this section shall be treated as reasonable collection efforts by the hospital for purposes of section 413.89(e) of title 42 of the Code of Federal Regulations (or any successor regulation); (3) in the case of any such individual who does not agree to such offer, the hospital payment of Medicare part A cost-sharing for such services shall continue to be made through the routine billing process for such cost-sharing (including with respect to claims for Medicare hospital part A bad debt)