A bill to amend title XIX of the Social Security Act to provide for redistribution and extended availability of unexpended medicaid DSH allotments, and for other purposes.

Summary: Strengthening the Safety Act of 2006 - Amends title XIX (Medicaid) of the Social Security Act to provide for the redistribution and extended availability of unexpended Medicaid disproportionate share hospital (DSH) allotments.

Directs the Secretary of Health and Human Services to award demonstration grants to health access networks to improve access, quality, and continuity of care for uninsured individuals through better coordination of care.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Strengthening the Safety Net Act of 
2006''.

SEC. 2. REDISTRIBUTION AND EXTENDED AVAILABILITY OF UNEXPENDED MEDICAID 
              DSH ALLOTMENTS.

    Section 1923(f) of the Social Security Act (42 U.S.C. 1396r-4(f)) 
is amended--
            (1) in paragraph (3)(A), by striking ``paragraph (5)'' and 
        inserting ``paragraphs (5) and (7)'';
            (2) by redesignating paragraph (7) as paragraph (8); and
            (3) by inserting after paragraph (6), the following new 
        paragraph:
            ``(7) Redistribution and extended availability of 
        unexpended allotments.--
                    ``(A) Establishment of redistribution pool.--
                            ``(i) In general.--Subject to clauses (ii) 
                        and (iii), the Secretary shall establish, as of 
                        October 1 of fiscal year 2007, and of each 
                        fiscal year thereafter, the following 
                        redistribution pool:
                                    ``(I) In the case of fiscal year 
                                2007, a $150,000,000 redistribution 
                                pool from the total amount of the 
                                unexpended State DSH allotments for 
                                fiscal year 2004.
                                    ``(II) In the case of fiscal year 
                                2008, a $250,000,000 redistribution 
                                pool from the total amount of the 
                                unexpended State DSH allotments for 
                                fiscal year 2005.
                                    ``(III) In the case of fiscal year 
                                2009 and each succeeding fiscal year 
                                thereafter, a $400,000,000 
                                redistribution pool from the total 
                                amount of the unexpended State DSH 
                                allotments for the third preceding 
                                fiscal year.
                            ``(ii) Unexpended state dsh allotments.--If 
                        a State claims Federal financial participation 
                        for a payment adjustment made under this 
                        section for a fiscal year from which a 
                        redistribution pool of unexpended State DSH 
                        allotments has already been created under 
                        clause (i), then, for purposes of this 
                        paragraph, the total amount of unexpended State 
                        DSH allotments in the fiscal year following the 
                        State claim for such Federal financial 
                        participation, shall be reduced by the Federal 
                        financial participation related to such claim.
                            ``(iii) Reduction in amounts available.--If 
                        the total amount of the unexpended State DSH 
                        allotments for a fiscal year (taking into 
                        account any adjustment to such amount required 
                        under clause (ii)) is less than the amount 
                        necessary to provide, for such fiscal year, the 
                        redistribution pool described in clause (i) and 
                        the amounts to be made available for grants 
                        under section 3(g) of the Strengthening the 
                        Safety Net Act of 2006 for such fiscal year, 
                        the Secretary shall reduce the amounts that are 
                        to be available for the redistribution pool 
                        under this paragraph and grants under such 
                        section, respectively, to such total amount.
                    ``(B) Redistribution.--
                            ``(i) In general.--Not later than October 
                        1, 2006, and October 1 of each year thereafter, 
                        the Secretary shall allot the redistribution 
                        pool established for that fiscal year among 
                        eligible States.
                            ``(ii) Priority.--In making allotments 
                        under clause (i), the Secretary shall give 
                        priority--
                                    ``(I) first to eligible States 
                                described in paragraph (5)(B) (without 
                                regard to the requirement that total 
                                expenditures under the State plan for 
                                disproportionate share hospital 
                                adjustments for fiscal year 2000 is 
                                greater than 0); and
                                    ``(II) then to eligible States 
                                whose State DSH allotment per medicaid 
                                enrollee and uninsured individual for 
                                the third preceding fiscal year is 
                                below the national average DSH 
                                allotment per medicaid enrollee and 
                                uninsured individual for that fiscal 
                                year.
                    ``(C) Expenditure rules.--An amount allotted to a 
                State from the redistribution pool established for a 
                fiscal year--
                            ``(i) shall not be included in the 
                        determination of the State's DSH allotment for 
                        any fiscal year under this section;
                            ``(ii) notwithstanding any other provision 
                        of law, shall remain available for expenditure 
                        by the State through the end of the second 
                        fiscal year after the fiscal year in which the 
                        allotment from the redistribution pool is made 
                        for expenditures incurred in any of such fiscal 
                        years; and
                            ``(iii) shall only be used to make payment 
                        adjustments to disproportionate share hospitals 
                        in accordance with the requirements of this 
                        section.
                    ``(D) Definitions.--In this paragraph:
                            ``(i) Eligible state.--The term `eligible 
                        State' means, with respect to the fiscal year 
                        from which a redistribution pool is established 
                        under subparagraph (A)(i), a State that has 
                        expended at least 90 percent of the State DSH 
                        allotment for that fiscal year by the end of 
                        the succeeding fiscal year.
                            ``(ii) State dsh allotment per medicaid 
                        enrollee and uninsured individual.--The term 
                        `State DSH allotment per medicaid enrollee and 
                        uninsured individual' means the amount equal to 
                        the State DSH allotment for a fiscal year 
                        divided by the sum of the number of individuals 
                        who received medical assistance under the State 
                        program under this title for that fiscal year 
                        and the number of State residents with no 
                        health insurance coverage for that fiscal year, 
                        as determined by the Bureau of the Census.
                            ``(iii) National average dsh allotment per 
                        medicaid enrollee and uninsured individual.--
                        The term `national average DSH allotment per 
                        medicaid enrollee and uninsured individual' 
                        means the amount equal to the total amount of 
                        State DSH allotments for a fiscal year divided 
                        by the sum of the total number of individuals 
                        who received medical assistance under a State 
                        program under this title for that fiscal year 
                        and the total number of residents with respect 
                        to all States who did not have health insurance 
                        coverage for that fiscal year, as determined by 
                        the Bureau of the Census.''.

SEC. 3. HEALTH SERVICES FOR THE UNINSURED.

    (a) Demonstration Grants to Health Access Networks.--
            (1) In general.--The Secretary of Health and Human Services 
        (in this section referred to as the ``Secretary'') shall award 
        demonstration grants to health access networks.
            (2) Application.--Each applying health access network shall 
        submit a plan that meets the requirements of subsection (c) for 
        the purpose of improving access, quality, and continuity of 
        care for uninsured individuals through better coordination of 
        care by the network.
            (3) Authority to limit number of grants.--The number of 
        demonstration grants awarded under this section shall be 
        limited, in the discretion of the Secretary, so that grants are 
        sufficient to permit grantees to provide patient care services 
        to no fewer than the number of uninsured individuals specified 
        by each network in its grant application.
    (b) Definition of Health Access Network.--
            (1) In general.--In this section, the term ``health access 
        network'' means a collection of safety net providers, including 
        hospitals, community health centers, public health departments, 
        physicians, safety net health plans, or other recognized safety 
        net providers organized for the purpose of restructuring and 
        improving the access, quality, and continuity of care to the 
        uninsured and underinsured, that offers patients access to all 
        levels of care, including primary, outpatient, specialty, 
        certain ancillary services, and acute inpatient care, within a 
        community or across a broad spectrum of providers across a 
        service region or State.
            (2) Inclusion of section 330 networks and plans.--The term 
        ``health access network'' includes networks and plans that meet 
        the requirements for funding under section 330(e)(1)(C) of the 
        Public Health Service Act (42 U.S.C. 254b(e)(1)(C)).
            (3) Inclusion of integrated health care systems.--
                    (A) In general.--Such term also includes an 
                integrated health care system (including a pediatric 
                system).
                    (B) Definition of integrated health care system.--
                For purposes of this section, an integrated health care 
                system (including a pediatric system) is a health care 
                provider that is organized to provide care in a 
                coordinated fashion and assures access to a full range 
                of primary, specialty, and hospital care, to uninsured 
                and under-insured individuals, as appropriate.
    (c) Plan Requirements.--
            (1) In general.--A health access network that desires a 
        grant under this section shall submit a plan to the Secretary 
        that details how the network intends to--
                    (A) manage costs associated with the provision of 
                health care services to uninsured and underinsured 
                individuals served by the health access network;
                    (B) improve access to, and the availability of, 
                health care services provided to uninsured and 
                underinsured individuals served by the health access 
                network;
                    (C) enhance the quality and coordination of health 
                care services provided to uninsured and underinsured 
                individuals served by the health access network;
                    (D) improve the health status of uninsured and 
                underinsured individuals served by the health access 
                network; and
                    (E) reduce health disparities in the population of 
                uninsured and underinsured individuals served by the 
                health access network.
            (2) Identification of measurable goals.--The health access 
        network shall--
                    (A) identify in the plan measurable performance 
                targets for at least 3 of the goals described in 
                paragraph (1); and
                    (B) agree that a portion of the payment of grant 
                funds for patient care services after the first year 
                for which such payment is made shall be contingent upon 
                the health access network demonstrating success in 
                achieving such targets.
    (d) Use of Funds.--A health access network that receives funds 
under this section shall expend--
            (1) an amount equal to not less than 90 percent of such 
        funds for direct patient care services; and
            (2) an amount equal to not more than 10 percent of such 
        funds for the network's operation and development for the 
        purpose of improving the efficiency and effectiveness of the 
        business and clinical operations of providers within the health 
        access network, including through the integration of management 
        information systems (including development and implementation 
        of electronic medical records) and financial, administrative, 
        or clinical functions across providers.
    (e) Rule of Construction Regarding Direct Patient Care Services.--
With respect to health access networks described in subsection (b)(2), 
the term ``direct patient care services'' shall be construed to mean 
the provision or purchase of services, such as specialty medical care 
and diagnostic services, that are not available or are insufficiently 
available through the network's providers. In purchasing such services 
for uninsured and underinsured individuals, networks shall, to the 
maximum extent feasible, endeavor to purchase such services from safety 
net providers.
    (f) Supplement, not supplant.--Funds paid to a health access 
network under a grant made under this section shall supplement and not 
supplant, other Federal or State payments that are made to the health 
access network to support the provision of health care services to low-
income or uninsured patients.
    (g) Funding.--
            (1) Transfer of portion of unexpended dsh allotments.--
        Notwithstanding any other provision of law, as of October 1 of 
        fiscal year 2007, and each fiscal year thereafter, amounts 
        described in paragraph (2) are hereby transferred from the 
        total amount of the unexpended State DSH allotments under 
        section 1923 of the Social Security Act (42 U.S.C. 1396r-4) and 
        made available for grants under this section.
            (2) Amounts made available for grants.--The amounts to be 
        made available under this section for each fiscal year 
        beginning with fiscal year 2007 are equal to the redistribution 
        pool amounts determined for each fiscal year under section 
        1923(f)(7)(A)(i) of the Social Security Act (42 U.S.C. 1396r-
        4(f)(7)(A)(i)) (as amended by section 2(3) of the Strengthening 
        the Safety Net Act of 2006).