A bill to amend titles XVIII and XIX of the Social Security Act to improve access to long-term care services under the medicare and medicaid programs.

Summary: A First Step to Long-Term Care Act of 2002 - Amends title XIX (Medicaid) of the Social Security Act (SSA) to make Medicaid estate recovery optional.Amends title XVIII (Medicare) of the Social Security Act (SSA) to provide for Medicare coverage of substitute adult day care services.Revises the definition of home-bound for purposes of determining eligibility for home health services under the Medicare program. Denies the Secretary of Health and Human Services any authority to disqualify an individual who requires technological assistance or the assistance of another individual to leave home from being considered confined to his home based on the frequency or duration of absences from home.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``A First Step to Long-Term Care Act 
of 2002''.

SEC. 2. MAKING MEDICAID ESTATE RECOVERY OPTIONAL.

    (a) In General.--Section 1917(b)(1) of the Social Security Act (42 
U.S.C. 1396p(b)(1)) is amended by striking ``shall seek'' each place it 
appears and inserting ``may seek''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
take effect on the date of enactment of this Act. A State (as defined 
for purposes of title XIX of the Social Security Act) may apply such 
amendments to estates and sales occurring at such earlier date as the 
State may specify.

SEC. 3. COVERAGE OF SUBSTITUTE ADULT DAY CARE SERVICES UNDER THE 
              MEDICARE PROGRAM.

    (a) Substitute Adult Day Care Services Benefit.--
            (1) In general.--Section 1861(m) of the Social Security Act 
        (42 U.S.C. 1395x(m)) is amended--
                    (A) in the matter preceding paragraph (1), by 
                inserting ``or (8)'' after ``paragraph (7)'';
                    (B) in paragraph (6), by striking ``and'' at the 
                end;
                    (C) in paragraph (7), by adding ``and'' at the end; 
                and
                    (D) by inserting after paragraph (7), the following 
                new paragraph:
            ``(8) substitute adult day care services (as defined in 
        subsection (ww));''.
            (2) Substitute adult day care services defined.--Section 
        1861 of the Social Security Act (42 U.S.C. 1395x) is amended by 
        adding at the end the following new subsection:

     ``Substitute Adult Day Care Services; Adult Day Care Facility

    ``(ww)(1)(A) The term `substitute adult day care services' means 
the items and services described in subparagraph (B) that are furnished 
to an individual by an adult day care facility as a part of a plan 
under subsection (m) that substitutes such services for a portion of 
the items and services described in subparagraph (B)(i) furnished by a 
home health agency under the plan, as determined by the physician 
establishing the plan.
    ``(B) The items and services described in this subparagraph are the 
following items and services:
            ``(i) Items and services described in paragraphs (1) 
        through (7) of subsection (m).
            ``(ii) Meals.
            ``(iii) A program of supervised activities designed to 
        promote physical and mental health and furnished to the 
individual by the adult day care facility in a group setting for a 
period of not fewer than 4 and not greater than 12 hours per day.
            ``(iv) A medication management program (as defined in 
        subparagraph (C)).
    ``(C) For purposes of subparagraph (B)(iv), the term `medication 
management program' means a program of services, including medicine 
screening and patient and health care provider education programs, that 
provides services to minimize--
            ``(i) unnecessary or inappropriate use of prescription 
        drugs; and
            ``(ii) adverse events due to unintended prescription drug-
        to-drug interactions.
    ``(2)(A) Except as provided in subparagraphs (B) and (C), the term 
`adult day care facility' means a public agency or private 
organization, or a subdivision of such an agency or organization, 
that--
            ``(i) is engaged in providing skilled nursing services and 
        other therapeutic services directly or under arrangement with a 
        home health agency;
            ``(ii) meets such standards established by the Secretary to 
        ensure quality of care and such other requirements as the 
        Secretary finds necessary in the interest of the health and 
        safety of individuals who are furnished services in the 
        facility;
            ``(iii) provides the items and services described in 
        paragraph (1)(B); and
            ``(iv) meets the requirements of paragraphs (2) through (8) 
        of subsection (o).
    ``(B) Notwithstanding subparagraph (A), the term `adult day care 
facility' shall include a home health agency in which the items and 
services described in clauses (ii) through (iv) of paragraph (1)(B) are 
provided--
            ``(i) by an adult day-care program that is licensed or 
        certified by a State, or accredited, to furnish such items and 
        services in the State; and
            ``(ii) under arrangements with that program made by such 
        agency.
    ``(C) The Secretary may waive the requirement of a surety bond 
under paragraph (7) of subsection (o) in the case of an agency or 
organization that provides a comparable surety bond under State law.
    ``(D) For purposes of payment for home health services consisting 
of substitute adult day care services furnished under this title, any 
reference to a home health agency is deemed to be a reference to an 
adult day care facility.''.
    (b) Payment for Substitute Adult Day Care Services.--Section 1895 
of the Social Security Act (42 U.S.C. 1395fff) is amended by adding at 
the end the following new subsection:
    ``(f) Payment Rate for Substitute Adult Day Care Services.--In the 
case of home health services consisting of substitute adult day care 
services (as defined in section 1861(ww)), the following rules apply:
            ``(1) The Secretary shall estimate the amount that would 
        otherwise be payable under this section for all home health 
        services under that plan of care other than substitute adult 
        day care services for a period specified by the Secretary.
            ``(2) The total amount payable for home health services 
        consisting of substitute adult day care services under such 
        plan may not exceed 95 percent of the amount estimated to be 
        payable under paragraph (1) furnished under the plan by a home 
        health agency.''.
    (c) Adjustment in Case of Overutilization of Substitute Adult Day 
Care Services.--
            (1) Monitoring expenditures.--Beginning with fiscal year 
        2004, the Secretary of Health and Human Services shall monitor 
        the expenditures made under the Medicare Program under title 
        XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) for 
        home health services (as defined in section 1861(m) of such Act 
        (42 U.S.C. 1395x(m))) for the fiscal year, including substitute 
        adult day care services under paragraph (8) of such section (as 
        added by subsection (a)), and shall compare such expenditures 
        to expenditures that the Secretary estimates would have been 
        made for home health services for that fiscal year if 
        subsection (a) had not been enacted.
            (2) Required reduction in payment rate.--If the Secretary 
        determines, after making the comparison under paragraph (1) and 
        making such adjustments for changes in demographics and age of 
        the Medicare beneficiary population as the Secretary determines 
        appropriate, that expenditures for home health services under 
        the Medicare Program, including such substitute adult day care 
        services, exceed expenditures that would have been made under 
        such program for home health services for a year if subsection 
        (a) had not been enacted, then the Secretary shall adjust the 
        rate of payment to adult day care facilities so that total 
        expenditures for home health services under such program in a 
        fiscal year does not exceed the Secretary's estimate of such 
        expenditures if subsection (a) had not been enacted.
    (d) Effective Date.--The amendments made by this section shall 
apply to items and services furnished on or after January 1, 2003.

SEC. 4. CLARIFICATION OF THE DEFINITION OF HOMEBOUND FOR PURPOSES OF 
              DETERMINING ELIGIBILITY FOR HOME HEALTH SERVICES UNDER 
              THE MEDICARE PROGRAM.

    (a) Clarification.--Sections 1814(a) and 1835(a) of the Social 
Security Act (42 U.S.C. 1395f(a); 1395n(a)) are each amended by adding 
at the end the following: ``Notwithstanding the preceding sentences, in 
the case of an individual that requires technological assistance or the 
assistance of another individual to leave the home, the Secretary may 
not disqualify such individual from being considered to be `confined to 
his home' based on the frequency or duration of the absences from the 
home.''.
    (b) Technical Amendments.--(1) Sections 1814(a) and 1835(a) of the 
Social Security Act (42 U.S.C. 1395f(a); 1395n(a)) are each amended in 
the sixth sentence by striking ``leave home,'' and inserting ``leave 
home and''.
    (2) Section 1814(a) of the Social Security Act (42 U.S.C. 
1395f(a)), as amended by subsection (a), is amended by moving the 
seventh sentence, as added by section 322(a)(1) of the Medicare, 
Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 
(appendix F, 114 Stat. 2763A-501), as enacted into law by section 
1(a)(6) of Public Law 106-554, to the end of that section.
    (c) Effective Date.--The amendments made by this section shall 
apply to items and services furnished on or after the date of enactment 
of this Act.